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A Guide to Owning Philippine Property for Foreigners

Foreigners who are currently living in the Philippines or expats who plan to go to the country to spend the rest of their retirement period, usually want to take advantage of the scenic spot, rising business possibilities and heavy tourist activity. It is common for these individuals to get a housing loan and buy properties and establish small businesses such as a restaurant, a bed and breakfast inn or a resort.

Philippine Property for ForeignersTo be able to carry out these plans of business development success, it is essential to know the basic rules covering property ownership by foreigners in the Philippines. This is also important in order to avoid legal problems that may arise in the future.

Here are a few of these rules, foreigners should take note of:

1. Foreigners may own a house as long as they don’t own the land.

It’s okay for foreigners or expats to own a property such as a house or a building. In short, expats may lease a land they do not own.

2. Filipinos who are married to foreigners who are still Filipino citizens may still buy land.

Filipinos who haven’t renounced their Filipino citizenship and are married to expats/foreigners may still purchase land in the Philippines. However, once they have renounced their Filipino citizenship, they will lose their right to buying Philippine land, and their property purchase will be subject to property ownership laws for foreigners.

3. Foreigners who are legal/natural heir may inherit Philippine properties.

A foreigner who is married to a Filipino may inherit the deceased loved one’s property as a natural heir of the Filipino. The foreigner will be given a certain period for selling the property and getting the proceeds. If this is not adhered, the property will then be inherited by Filipino relatives.

4. Foreigners are not allowed to own land in the Philippines.

Foreigners who are married to Filipinos who wish to purchase land in the Philippines may have their Filipino spouses purchase the land for them, and the land will be placed under the Filipino spouse’s name. Foreigners should also note that lands bought before the 1935 constitution are not covered by the land ownership limit.

5. Foreigners may purchase condominium units.

According to R.A. 4726 or the Condominium Act of the Philippines, foreigners are allowed to purchase condominium units and shares in condominium corporations up to 40% of the total and outstanding capital stock of a Filipino operated or owned condominium corporation.

6. The predominantly Philippine owned corporation may buy Philippine land.

Another way for foreigners to purchase land in the Philippines is to establish a predominantly Philippine owned corporation and use this for buying, land, residential house and lot, and commercial buildings. The restriction on acquisition of real estate is membership of the Board of Directors to 40% alien participation.  Not abiding to this rule can put the properties owned by the corporation at risk of forfeiture.

7. Foreign investors or foreign corporations that are investing in the Philippines may lease land for a long term period.

The Investor’s Lease Act of the Philippines enables a foreigner or a foreign corporation that has over 40% foreign ownership can lease land for up to 50 years. They also have the choice to renew their lease for another 25 years.

8. Purchase natural-born Filipinos who have acquired foreign citizenship should adhere to certain rules.

According to the Philippine law, natural born Filipinos with foreign citizenship may only own up to 1,000 square meters of land and up to 1 hectare of agricultural land in the Philippines. For married couples, one or both natural born Filipinos may use the privilege as long as the total acquisition will not surpass the maximum area permitted by the Philippine law. Meanwhile, those who have dual citizenship as stated under the provision of Republic Act 9225 can enjoy the same full property privileges provided to Filipinos.

We hope that our quick guide has been helpful in enlightening you on how foreigners or expatriates may purchase a property here in the Philippines. Should you decide to purchase a Philippine property soon, but you find that you are short on cash, you might want to try checking out the various housing loans currently available in the country through MoneyMax. PH, a free and user-friendly comparison portal providing all the financial options available to Filipinos from the biggest financial industries in the Philippines.


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This entry was posted on 04/02/2014 by in Real Estate and tagged .
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