I am a foreigner. Can I buy a property in the Philippines?
The population of foreigners in the Philippines has been increasing in recent years. The Philippines is becoming a popular destination for expats, who are attracted to the country’s low cost of living, warm tropical climate, friendly people, and lucrative opportunities for investment.
With the growing population of foreign nationals, there also has been a growing interest of foreigners to own real estate property in the Philippines. However, Philippine law strictly prohibits them from acquiring land in the country. Despite pressure from expatriate communities to amend this ruling, the easiest way for foreigners to own real estate properties remains through spouses with Filipino nationality.
Foreigners can own condominium units
Non-Filipinos may, however, purchase and own condominium units in the Philippines. This is a popular and permissible alternative for foreigners owning real estate properties in the country. However, the ownership of condominium units is still subject to a 40 percent restriction for foreigners. Condominium projects are treated like a corporation setup, where 60 percent must be Filipino-owned. This means foreign ownership in a single project should not exceed 40 percent.
An exception to this rule, is foreign acquisition of a Philippine real estate in the following cases:
- Acquisition before the 1935 constitution.
- Acquisition through 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.
Other Alternatives
Renting
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. Owning of houses or buildings is legal as long as the foreigner does not own the land on which the house is built.
Setting up a corporation
Setting up a corporation with 40 percent of the stocks in the foreigner’s name and 60 percent to Filipinos is also a good alternative. There must be a minimum of 5 stockholders.
