own Land in Busuanga Philippines

Do Foreigners have the Right to own Land in Philippines?

A lot of foreigners who visit the Philippines get attracted to the place and realize that Philippines is a great place to retire. As a result, they would like to buy properties there and invest in different properties. However, foreigners or expats who wish to live a good life in the Philippines need to know some important information.

By law, foreigners do not have the right to own land in Philippines. Only a Filipino can own land so that the best way for an expat or foreigner to own a land is to have a Filipino spouse who can purchase it in her/his name. Although there are exceptions to this law.

What are the Exceptions

Partnerships or Corporations a Filipino owns at least sixty percent can acquire land in the Philippines. An exception to this rule is an acquisition of a real estate by a foreigner in instances like – when the property is acquired before the 1935 constitution; acquired through hereditary succession if acquisition is natural heir or legal. Which means if you are married to a Filipino and your wife or husband dies then automatically you become the legal owner of the property and the same applies to the children.

Another case is with those Filipinos by birth who have acquired foreign citizenship. They can own a land but only up to one thousand square meter for residential property. For agricultural land or farm land.they own a one hectare.

Which type of Properties Foreigner can buy

Expat House in Coron
Expat House in Coron

Owning or building of houses by a foreigner is also legal as long as the foreigner does not own the land which the building or house is build. The best alternative for foreigners is to set up a corporation with forty percent of stocks in the foreigner’s name. And the rest is to a Filipino. This corporation must have at least five stockholders and for security the foreigner can have the Filipino stockholders sign a blank transfer of stocks.

As discussed above, a foreigner cannot acquire a land but the land can be leased or rented on long term basis. For instance they can rent initial for fifty years and renew it every twenty-five years. With this foreigners can rent a land and legally owned the building or house build in it.

For Condominiums, there is the Condominium Act of the Philippines, RA 4726 which allows foreigners to own or acquire condominium units and even shares in condominium corporations of up to forty percent of the total current capital stock of a Filipino owned condominium.

There are cases where a foreigner can own a house and lot, this property has a condominium title but this are very few cases only since most condominiums are high rise building.

How to Buy a Property in the Philippines

For those who are not too familiar with this yet, you would have to know that investing in the Philippines can be a good thing because you can buy properties for a small amount of money.

This aims to give you a lot of information about buying property in Philippines.

Q: Can foreigners own properties or land?

A: In the Philippines, foreigners can’t purchase any kind of land by law. However, there are some things that you can do:

  • You can lease a piece of land or a property for 25 years. This will give the investment enough time to mature. This is the easiest thing that you can do. It is also less time consuming.
  • If you have a girlfriend or wife, you may pay off the property under her name. You also have the option to name it under your Filipino friend if you trust him enough. If you do this though you should remember that when you sign your deeds and prepare all your documents, your trustee should sign the documents as well.

These are the documents that you would have to prepare:

  • Contract of Lease
  • Irrevocable Special Power of Attorney for you to sell the property whenever you would like to sell it. Make sure that the document for this one is separate from the other documents that you would need.
  • Ready and signed cancellation of the lease agreement. This is needed when you sell the property.

Remember that before the documents can be notarized, you need 7 copies of each document. When you have already prepared all the seven copies, that is the only time when everything would be authenticated and notarized.

Things that you have to do:

1. Make sure that you have the hard copy or the original copy of your TCT (Transfer Certificate of land Title). Your name should be in the document not the name of your trustee.

Q: Can foreigners own condominium units?

A: Yes, foreigners can own units provided that they do not own more than 40% of the units in the whole condominium building. The foreigners can be sure though that they would be owning their whole units.

Q: Can foreigners own properties through forming and starting corporations?

A: Yes, this is always possible. However you have to make sure that you have Filipino partners with you. Also, you can only own 40% of the corporation. Your Filipino partners would have to own 60% of it. This can also be very time consuming to do and is not recommended in general.

Q: Are their other ways by which you can own lands or properties?

A: Yes it is possible if you are married with a Filipina and you have a child. Then you can place the property under your child’s name. Just remember though that you cannot sell that property unless your child is already over 18. Another option that will make you acquire properties is if your wife dies. You would be getting the properties legally.

Q: Is it safe to buy land in the Philippines?

A: Absolutely. You can be sure that as long as you complete all the corresponding documents, you would be able to acquire properties in the Philippines that cannot be bought by anybody else.

If for example you want to invest in beachfront properties, you have to know that the government  owns all the beach fronts there. In order to lease, you would have to acquire a permit from the government. This is called “Foreshore lease.” The reason for this is to prevent people from living too near the beachfront. Some squatters in the Philippines have tried to live near the beachside to go fishing.

More information on Real Estate taxes

According to the Philippine law, capital gains tax and all other real estate taxes against the property shall be the account of the seller up to the date of the execution of the Deed of Absolute Sale. On the other hand, the documentary stamps tax, registration fees and expenses for the transfer of title in the name of the buyer shall be for the account of the buyer.

However you have to take note that there are instances when the seller would offer a lower price of the property in condition that the buyer will shoulder all obligations for and behalf of the seller.

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