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Who Can Own Property in the Philippines


Who Can Own Property in the Philippines?

 By law, foreigners don't have the right to own land in the Philippines.  Only Filipino citizens can own land (there have been many proposals to amend this law but as of this writing, the law remains unchanged.)  The simplest way for a foreigner to acquire real estate properties is to have a Filipino spouse purchase a property in their name.  Another way is to acquire a long term Lease of the property for 50 years, renewable every 25 years after that (see below for details and example).

Exceptions:

Corporations or partnerships that are at least 60% Filipino owned are entitled to acquire land in the Philippines.  An exception to this rule, is foreign acquisition of a Philippine real estate in the following cases:

* Acquisition before the 1935 constitution.

* Acquisition thru hereditary succession if the foreigner acquiring the property is a legal or natural heir.  This means that when you are married to a Filipino citizen and your spouse dies, you as the natural heir will become the legal owner of his/her property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she is not a Filipino citizen.

* Purchase of not more than 40% interest in a condominium project (See Below).


* Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by law. (natural born Filipinos who acquired foreign citizenship is entitled to own up to 1,000 square meter of residential land, and 1 hectare of agricultural or farm land) 

* Filipinos who are married to aliens who retain their Filipino citizenship, unless by their act or omission they have renounced their Filipino citizenship.

Owning of houses or buildings is legal as long as the foreigner does not own the land on which the house is built. 

Setting up a corporation with 40% of the stocks in the foreigner's name and 60% to Filipinos is a good alternative. There must be a minimum of 5 stockholders, and a foreigner can have the Filipino stockholders sign blank transfer of the stocks for security.  

Long Term Lease By a Foreigner:

The main problem with this is that it is very difficult to find an owner that understands this law and is willing to do it.  However, if you are lucky to find a Licensed Broker like Anna that knows the law and can explain it, you have a very good chance of acquiring a long term lease of the property.

The Law: 

Land can be leased by a foreigner or a foreign corporation on a long term contract for an initial 50 year period and renewable in 25 year increments after that. A foreigner can Lease a lot and at the same time legally own the house and all improvements on the Leased land.  EXAMPLE:  A house and Lot has a Selling Price (SP)of PhP 10,000,000.00.  A foreigner can pay the owner the entire SP and can hold the Title (TCT) for the land.  There will be no transfer of the Title to the foreigners name.  But, the foreigner will receive a Special Power of Attorney (SPA) from the owner allowing the foreigner to be able to sell and/or transfer the Title to anyone else at any time at the foreigners discretion.  The owner and the foreigner will also execute a notarized Memorandum of Agreement (MOA) with all the terms and a Long Term Contract of Lease.  With these documents in hand, the SPA, MOA, Contract of Lease and the original Title (TCT), the foreigner has all the legal rights to do anything with the property that he or she wants (live on, make improvements and even sell the property, if and when they want).  The foreigner will also have the Tax Declarations registered in their name and be responsible to pay the yearly Real Estate Taxes for the Land and Buildings on the property when they are assessed by the the Bureau of Internal Revenue (BIR).

Condominiums:

The Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire condominium units and shares in condominium corporations up to 40 % of the total and outstanding capital stock of a Filipino owned or controlled condominium corporation.

Those who claim that foreigners can own a house & lot in the Philippines have a condominium title (CCT) to their property. There are very, very few single-detached homes or Townhouses in the Philippines with CCT's. Most condominiums are mid rise and/or high rise buildings.

For more information about these topics, please e-mail either Doug or myself at:

marshrealestateagency@yahoo.com