Holding a Cebu Condo Long-Term: The Costs and Uncertainties to Budget For

Holding a Cebu condo for the long term costs more than the purchase price: dues, real property tax, insurance and repairs run every year, furniture and fittings need replacing, buildings occasionally levy special assessments, loan rates reprice, and some months the unit will earn nothing. The trade-off is that many of these costs rise over time while rent and resale value are uncertain — so a long hold works best when you have budgeted for the costs that can grow and do not need to sell on a fixed date.

The costs that run every year

Association dues and how they rise

Dues pay for the building’s shared costs: security, cleaning, common-area power and water, elevators, insurance on common areas, administration and reserves. They are charged per square metre and reset with the condominium corporation’s budget. Older buildings and those with many amenities tend to need more upkeep, and increases are decided under the building’s rules rather than by any single owner. Before buying, ask for the dues history, the size of the reserve fund and the latest audited financial statements; a building with a thin reserve is more likely to raise dues sharply or levy a special assessment when something major fails.

Real property tax

The city assessor applies an assessment level to the unit’s market value under the local schedule, and the city levies basic tax (up to 2% of assessed value) plus 1% for the Special Education Fund. RA 12001, approved in June 2024, requires assessors to update those schedules within two years of the law taking effect and every three years after. The first-year increase from a new schedule is capped at 6% of the previous tax; later years can be capped by city ordinance, but are not capped by the national law. Unpaid real property tax ranks ahead of other liens on the unit.

Insurance and routine repairs

If you borrow, the bank usually requires mortgage redemption (life) insurance and fire insurance for the life of the loan. Contents insurance is your choice. Routine repairs — air-conditioner servicing, plumbing fixtures, appliance parts, repainting — recur every year, and more often when the unit is let.

The costs that arrive in lumps

• Refurbishment. Air-conditioners, water heaters, appliances, mattresses and sofas wear out. A unit that looks dated or worn rents for less and sells more slowly. Plan for partial replacements every few years and a fuller refresh around the ten-year mark.
• Special assessments. When the building needs work the regular dues and reserves do not cover — for example major equipment replacement or façade or waterproofing repairs — the corporation can levy a one-off charge on owners according to the declaration of restrictions. Once a notice of assessment is registered, an unpaid assessment becomes a lien on your unit.
• Turnover between tenants. Cleaning, repainting and minor repairs each time a tenant leaves, plus any leasing commission.

Loan repricing

Most bank housing loans fix the rate for a period and then reprice to the bank’s prevailing rate. Rates do not move only one way: the BSP cut its policy rate to 4.25% in February 2026 and raised it in steps to 5.00% by the end of August 2026. Bank loan rates follow their own pricing, but an owner whose fixed period ends in a rising-rate year can face a noticeably higher payment. In the illustration below, a ₱3.6 million, 20-year loan at 7% costs ₱27,911 a month; repricing to 9% after three years lifts it to ₱31,871. See how bank financing works for the questions to ask about fixing periods.

A 10-year illustration of the cost of holding

Year 4 is the first year at the repriced rate. Dues reach about ₱140 per sq m by year 10 at 5% a year. Loan balance after ten years: about ₱2,515,962. Rent collected over the ten years in this example: about ₱2,265,617.

Three things to take from the table. Ownership costs average about ₱7,440 a month over the decade, but they are lumpy — year 10 costs more than three times year 1 because of the refurbishment. Interest dwarfs everything else for a borrower, which is why the rate at repricing matters so much. And the rent in this example covers the ownership costs and only about half of the interest, let alone the principal, so the owner is still topping up — and is relying on the unit’s value at the end, which nobody can promise.

At the end of the hold: resale is not automatic

• Competition from new launches. Developers sell new units with long equity terms and promotions that a private seller cannot match. Colliers expects a large pipeline of new condominiums in Cebu and Davao between 2026 and 2029.
• Age and condition. A ten-year-old unit is compared with brand-new stock. The building’s upkeep, reserve fund and reputation matter as much as your own unit.
• Buyer financing. Your buyer’s bank will lend against its own appraisal, which may be below your asking price.
• Tax on the sale. Individuals selling a capital asset pay 6% capital gains tax on the higher of the price or the official valuation. If you have been leasing the unit as a business, BIR rules may treat it as an ordinary asset taxed as business income instead — check before you set your price.
• Time. Plan for the possibility that a sale takes months, and avoid needing the proceeds by a fixed date.

Questions to ask before committing to a long hold

• What have dues been in each of the last five years, and how large is the reserve fund?
• Has the building levied any special assessments, and are major works planned?
• What is the current tax declaration and real property tax, and when is the city’s next schedule revision?
• When does my fixed rate end, and could I afford the payment two percentage points higher?
• How many new units nearby will reach turnover in the next few years?
• If I had to sell in year five instead of year ten, what would I need the price to be to break even after costs?

Frequently asked questions

Sources and notes

1. Republic Act No. 4726 (Condominium Act) — assessments for authorised expenditures shared by fractional interest; registered notice of assessment becomes a lien (Secs. 9, 20)
2. Republic Act No. 12001 (Real Property Valuation and Assessment Reform Act) — approved 13 June 2024; schedules of market values updated within two years and every three years after (Sec. 19); first-year increase in real property tax capped at 6% (Sec. 29)
3. Local Government Code (RA 7160) — Secs. 218, 233, 235 — assessment levels and real property tax rates (city basic tax up to 2% plus 1% Special Education Fund)
4. BIR Revenue Regulations No. 7-2003 — real properties of a real estate lessor that are for lease are ordinary assets
5. BSP — Target reverse repurchase rate history — policy rate 4.25% from 20 February 2026, raised to 5.00% by 28 August 2026
6. Colliers mid-2026 Visayas–Mindanao report, as reported by Insider PH (6 July 2026) — Cebu and Davao expected to account for more than 60% of about 45,000 new condominium units in Visayas–Mindanao from 2026 to 2029
7. 10-year illustration — unit size, price, dues rate and growth, real property tax and its revision steps, insurance, repairs, refurbishment, special assessment, rent, vacancy and loan rates are assumptions for illustration, recomputed 3 October 2026; not a forecast

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