Want to start a fistfight with your expat friends in the Philippines? Start discussing the issue of foreign land ownership in the archipelago. Like religion and politics, the topic of property ownership will oftentimes stir up a heated debate.
So, can foreigners own property in the Philippines?
YES, foreigners may own REAL ESTATE PROPERTY in the Philippines.
BUT NO, they are not allowed to buy and own LAND.
Foreigners may purchase and own CONDOMINIUM UNITS built on Philippine soil. However, the ownership of condominium units is still subject to a 40% restriction for foreigners. A condominium project is similar to a corporation set up where 60% must be owned by Filipinos.
Those who claim that foreigners can own a house and lot in the Philippines have a condominium title to their property. There are very few single-detached homes or townhouses in the Philippines with condominium titles. Most condominiums are mid-to-high rise buildings.
By law, foreigners don’t have the right to acquire land in the Philippines.
Only Filipino citizens can own land. While there have been a multitude of proposals to amend the law, at this time it remains unchanged. There has been talk under the present Duterte administration to amend the Constitution and allow foreign ownership of businesses but the President is against foreign ownership of land.
The simplest way for a foreigner to acquire real estate properties is to have a Filipino spouse purchase a property in his/her name.
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 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 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 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 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.
(Sources: Hoppler Real Estate Blog) ( Real Estate Buying Guide in the Philippines for Foreigners)
Don’t Piss Off Your Wife or Girlfriend
My loving wife owns two properties on our island province of Guimaras. The properties were purchased under her name. Both our names appear on the deeds of sale.
It makes no sense for me personally to have my name listed on the property, since I cannot own any land in the Philippines anyway. As long as I don’t piss my wife off, I’ll be OK.
I trust my wife. After 17 years of marriage she’s still put up with me and we have a strong partnership. Odds are I’m going to die before she is so she’s going to end up with it anyway, right!
BUT, if you are NOT married and buy land under your Filipino or Filipina’s name, please exercise extreme caution. If they give you the boot, there’s really not much you can do. So lay off the Red Horse and don’t get so drunk that you say something you’ll regret later!
Want more useful information about moving to and living in the Philippines? Check out my E-book, “The Philippines Expat Advisor”)