Can Foreigners Acquire Properties in the Philippines?

Property Updates

There are plenty of reasons foreigners have become more keen in acquiring properties in the Philippines.

Those who come from frigid regions wish to enjoy an all-year tropical climate and escape from bitter winters. Those who experience the warmth and hospitality of Filipinos wish to receive more of it. The beaches, the carefree attitude and loving nature of Filipino people as well as the relative affordability of properties in the Philippines make it an attractive destinations for foreign passport holders to take a slice of the Pearl of the Orient Seas.

But the question many people ask: are non-Filipinos allowed to buy properties in the Philipines? The answer is yes. Foreigners can own homes, condo units or cars as properties in the Philippines.

However, while foreign nationals can buy and own homes built on Philippine soil, foreign ownership of properties in the Philippines is not absolute as non-Filipinos are not allowed to buy tracts of land. Further, foreigners owning homes in the Philippines is also subject to 40% restriction so that means the other 60% of the property must be owned by a Filipino citizen.

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Although it is clear under Philippine laws, foreigners are not allowed to own land and their ownership of other forms of real estate properties is limited, these rules are subject to certain limitations.

So if a non-Filipino friend abroad, or former Filipino who renounced his or her citizenship asks you the question if he or she can buy property in the Philippines, the straight answer is yes. But also be it known to this person that property ownership comes with the following conditions:

1. The property was acquired under the 1935 Constitution of the Republic of the Philippines.
You may quickly ask what has an old Constitution that has been amended several times have to do with the acquisition? This is still relevant since if the property or land has been acquired under the 1935 Philippine Constitution, and passed on to a non-Filipino heir by way of hereditary succession.

2. The property was acquired with amount not more than 40% of its total value.
As stated above, the non-Filipino buyer can only own a portion of the property, with the remaining ownership belonging to a Filipino citizen.

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3. The property is within the restricted limit based as mandated by law.
For former natural-born Filipino citizens, ownership of land is limited to 1,000 square meters ideally for residential or commercial purpose, or one hectare of agricultural or farmland.

4. The non-Filipino buyer marries a Filipino citizen who does not renounce his or her citizenship.
For example, an American man takes a vacation in one beach resort, meets a single Filipina and the two fell in love and decide to get married and settle in the Philippines. That’s because marrying a non-Filipino does not automatically relinquish her citizenship according to Article IV Section 4 of the Philippine Constitution.

5. Former Filipino citizens who reacquired their citizenship under the Dual Citizenship Law of 2003.
Once ex-Filipino citizens reacquire their citizenship as dual citizen of the Philippines and another country, they may acquire and own land without restrictions.

Renting properties by foreign individuals or corporations

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A foreign individual or corporation in the Philippines can only lease and not own any Philippine land. Leases are available on long-term contract good for 50 years and the rent is renewable every 25 years.

Condominium units

Under the Condominium Act of the Philippines, R.A. 4726, foreigners can acquire condominium units and shares in condominium corporations up to 40 % of the total and outstanding capital stock of a Filipino-owned or -controlled condominium corporation.

As condominiums are understood as residential units within medium to high-rise buildings, it implies that foreign owners actually own part of the condo units but not on the land in which condominium buildings are erected.

There have been more clamor on loosening the grip on foreign ownership in the Philippines as many see this as a trigger to further investments in the country and generate more jobs to local Filipinos. But as long as the current 1987 Constitution is intact and not amended, there’s no way to change the way foreigners buying and owning a piece of the Philippine soil.

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