How To Buy Land In Philippines As A Foreigner

‍Are you a foreigner looking to buy land in the Philippines? The process is complicated, but you can make a successful purchase with the right knowledge.

Foreigners are not allowed to buy land in the Philippines. However, you can acquire land through a corporation, where 60% of the company shares must be allocated to Filipino citizens. You can also buy a condo unit or lease land for up to 50 years under the Investors' Lease Act of the Philippines.

Due to many regulations, buying land in the Philippines can be a daunting experience, particularly for foreigners. I’ve scoured reliable sources and consulted various licensed real estate brokers to help you maneuver the land-buying process by providing you with the necessary information to make an informed decision. So, whether you're looking to invest in a vacation home or start a business in the Philippines, I have you covered.

‍How To Buy Land In Philippines As A Foreigner

Even though foreigners are generally not allowed to purchase land in the Philippines, you can get around the restriction in several ways.

However, knowing Philippine laws and regulations surrounding property ownership is important. Here are several ways that foreigners can acquire or buy land:

1. Purchasing a Condo Unit

According to Philippine laws, one way for foreigners to acquire property is by purchasing a condominium unit. Under the Philippine Condominium Act, a foreigner can own up to 40% of the total condominium units in a condominium project building.

This means that you can purchase condominium units as long as the total foreign ownership of the building does not exceed 40%.

2. Purchasing Land by a Corporation

Another option for foreigners is to purchase land through a corporation. To do this, you must establish a domestic corporation in the Philippines and register it with the Securities and Exchange Commission.

The corporation can then purchase the land on your behalf, but at least 60% of the corporation's shares must be owned by Filipino citizens.

3. Purchasing by a Foreigner Married to a Filipino

Another way to acquire land if you’re not a Filipino citizen is through your Filipino spouse. If you're married to a Filipino citizen, your spouse can purchase the property on your behalf. While your name won't appear on the land title, it may be included in the purchase contract.

4. Purchasing by a Foreigner who was Natural-born Filipino

If you were a natural-born Filipino citizen but lost your Filipino citizenship, you can still acquire land in the Philippines. Under Section 8 of Philippine law, a natural-born Filipino, who is a foreign national, can purchase and own property in the country under certain conditions.

These conditions state that natural-born Philippine citizens can own a maximum of 5,000 square meters of urban land, which is often residential land, or up to three hectares of rural land. In this case, rural land is often agricultural or farmland.

Land Ownership Rules for Foreign Investors who were Natural-born Filipinos

If you're a former natural-born Filipino looking to acquire land, you must prove that you were a natural-born citizen of the Philippines and that you have re-acquire Philippine citizenship. You must also show proof of your Filipino citizenship at the time of your birth.

5. Foreigners Holding a Special Retirement Visa

Foreigners with a Special Retirement Visa (SRRV) can also own land in the Philippines. To qualify for an SRRV, you must be at least 35 years old and meet the minimum deposit requirement in accordance with Philippine Retirement Authority. The SRRV also provides other benefits, such as tax exemptions and multiple-entry privileges.

As you can see, foreigners can possess property in the Philippines through various means, such as purchasing a condo unit, establishing a corporation, or being married to a Filipino citizen.

Understanding Land Ownership in the Philippines

If you're a foreigner looking to buy land, it's important to understand the country's laws on land ownership.

The Philippine Constitution only allows land ownership by Filipino citizens and corporations that are at least 60% Filipino-owned. That means that only Filipino citizens are allowed to own land. However, as a foreigner, you have a few legal options for acquiring property in the Philippines.

Foreigners

According to Philippine laws, foreigners are not allowed to buy land in the Philippines but may acquire condo units in a condo building or a condominium project.

Under the Condominium Act of the Philippines, foreign nationals may own up to 40% of the units in a condominium building.

If you want to acquire real estate property other than a condominium unit, you may do so through a long-term property lease agreement or by setting up a domestic corporation.

Corporations

Foreign corporations may own property in the Philippines, but only if at least 60% of the corporation is owned by Filipino citizens. If you're interested in acquiring land through a corporation, you'll need to register with the Securities and Exchange Commission and the Department of Trade and Industry.

When it comes to real estate property ownership, it's important to note that owning a property in the Philippines does not necessarily mean owning the land it sits on.

In the case of condominium units, for example, you own the unit itself but not the land it's built on. The land is owned by the condominium corporation, which is made up of the unit owners.

To buy property in the Philippines, you'll need to go through a process that includes obtaining a land title, a land tax declaration (issued by the Bureau of International Revenue), and of course, paying transfer taxes.

The land title or Deed of Absolute Sale serves as proof of ownership and is issued by the Register of Deeds. You'll also need to pay capital gains tax based on the property's selling price or fair market value, whichever is higher.

When acquiring a real estate property in the Philippines, working with a reputable real estate agent and/or lawyer is important. They can guide you through the process and ensure that all legal requirements are met.

Ownership Rights and Protection

Even though there are ways you can acquire land or property in the Philippines, there are restrictions on foreign ownership, such as the size and location of the property.

As a foreigner buying property in the Philippines, it’s important to understand the ownership rights and protections you’re entitled to.

For example, foreign ownership of land in the Philippines is limited to a maximum of 40% ownership by foreigners. However, there are some exceptions to this rule, such as the acquisition of land by a former natural-born Filipino citizen, the acquisition of land by a foreign national who is married to a Filipino citizen, and land acquisition through hereditary or inheritance succession.

According to UNCTAD Investment Policy Hub, the Foreign Investment Act of 1991 encourages foreign investments in enterprises that expand livelihood and job opportunities for Filipinos, enhance the economic value of the Philippines’ farm products, and boost the welfare of local consumers.

In fact, a report by REUTERS indicates that in March 2022, President Rodrigo Duterte approved an amendment to a law to allow full foreign ownership of firms dealing with services like shipping and telecoms. That included amending archaic legislation that has long limited foreign investment in the Philippines.

Once you have purchased the land, securing your property rights is crucial by obtaining updated property titles. This will help protect you from any potential legal disputes or claims on the property. I recommended hiring a reputable lawyer or real estate agent to assist you with this process.

Engage Professional Real Estate Agents

Buying property in the Philippines can be complex, especially for foreigners. That's why it's important to engage the services of a licensed real estate broker or agent to help you navigate the legal requirements and paperwork.

Here are some reasons why you should consider working with a professional: