Buying Property in the Philippines

Buying Property in the Philippines

We get quite some emails asking for the options of buying property of any kind or a house & lot in the Philippines by Foreigners and Expats who consider to move to Dumaguete or the Philippines after retirement, or as a second home. Others think about this as an investment opportunity due to the improved state of the Philippine economy over the last decade.

However, it is very important to understand the laws and rules regarding investing in property in the Philippines. There are rules one needs to be aware of when it comes to property ownership in the Philippines. With one single exception, the general rule is:

Foreigner cannot own land in the Philippines!

It is really simple like this. Sadly, there are everywhere black sheep and we even heard of some local lawyer who is very convincing to tell foreigners that they can own land here.

Many foreigners married to a Filipina dreaming of their retirement home here. If they want to acquire land, the title of the land has to placed under the name of his Filipino spouse.

Corporations can purchase land

As a foreigner one can set up a Filipino Corporation. This corporation is allowed to own land in the Philippines. However, the corporation must be at least 60% under Filipino ownership.

There are law firms here offering that kind of service with ready/made contracts. While it is usually no problem, foreigners who want to go that route should do their homework. There are many completely wrong information floating around in the internet. A closer look into the Anti-Dummy Law of the Philippines may be a good thing to do. One part of it states clearly, that only 40% of the Board of Directors can be filled by foreigners.

No matter what the corporation contract says, the foreigner will only be 40% of it. If one breaches the above stated Anti-Dummy Law there is a good chance that the foreigner will lose his/her complete investment.

Foreigners can purchase Condo Units

It is clearly stated in the R.A. 4726 of the Philippines (also known as the Condominium Act) that foreigners can purchase a unit in a condominium or shares of the Condo corporation. However, the maximum foreign part of the capital stock is also limited to 40%, so 60% are Filipino owned and controlled.

Foreigner can acquire property by hereditary succession

This is the only exception where a foreigner can own land legally in the Philippines. We want to give an example. A foreigner is married to a Filipino citizen. If the Filipino spouse dies, the foreigner inherits legally the properties. As the legal heir he shall be given a reasonable amount of time to dispose of the property and to collect the proceeds.

Foreigners can lease properties

The Investors Lease Act of the Philippines regulates the lease of properties for foreign corporations (with more than 40% foreign ownership) and foreigners. Both are allowed to lease land and properties for 50 years with an option to extend the lease for another 25 years.

Foreigners can own a house and/or a building

This is no problem, as long the land on which this building or house stands is owned by a Filipino citizen. Many expats and foreigners use the above-mentioned lease-option to build their new home.

4 replies
  1. Steve K.
    Steve K. says:

    Hi. Actually, here in Bacolod, it is perfectly legal for a foreigner to own land and a business. Maybe Dumaguete is just a bad place for investment?

    • Rosario - DC-Team
      Rosario - DC-Team says:

      That is simply not true! Not in Bacolod or any other place in that archipelago. If you truly belief that, you may wanna consult a different lawyer
      A foreigner can be involved in a corporation, can even put his life/time savings into that coop. However, it need to be 60% Filipino owned. There are plenty of lawyers/fixers/wife offering that to foreigners for not too much money, but if the s*** hits the fan, they own 60% of it, the foreigner pulls his tail between his legs and goes empty handed away
      A foreigner can’t own land either. He can inherit land up to 1 ha, if his wife dies, but needs to sell it in an appropriate time, which is not said in numbers, but according to the law, he has to sell it!


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