Foreigner’s Guide to Philippine Real Estate
For those who are non-Filipinos, I hope you find this Foreigner’s Guide to Philippine Real Estate helpful. Read on until the bottom to get your full tips
By law, foreigners don’t have the right to acquire Philippine land (there have been many proposals to amend this law but of this writing, it is unlikely to change). The simplest way for a foreigner to acquire Philippine real estate is to have a Filipino spouse purchase a property. Another alternative is having a Filipino partner when acquiring a property. The partner owns 51% or more and the remainder is owned by the foreigner. (Tip: The foreigner can have a blank deed of sale signed by the Filipino partner for security)
Filipino citizens and corporations or partnerships that is at least 60% Philippine owned are entitled to acquire Philippine land. 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 foreign acquire is a legal or natural heir.
This means that when you are married to a Filipino citizen and your husband/wife 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 Philippine condominium project.
* 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 sq.m. 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 build.
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 foreigner can have the Filipino stockholders sign blank transfer of the stocks for security.
The land can be leased by the foreigner or a foreign corporation on a long term contract for an initial 50 year period and renewable every 25 years. A foreigner can rent a lot and at the same time legally own the house on the rented land.
The Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire Philippine condominiums and shares in condominium corporations up to not more than 40 % of the total and outstanding capital stock of a Filipino owned or controlled condominium corporation.
With this law, foreigners can own a Philippine house and lot as long as it has a corresponding condominium title to that property. There are very few single-detached homes or Townhouses in the Philippines with condominium titles. Most Philippine condominiums are high rise buildings.
If you wish to stay permanently in the Philippines or if you frequent the Philippines and stay for long periods. Avail of the government’s Special Resident Retirement Visa (SRRV).