Q&A
Can I own property:
Non-Filipinos don't have the right to acquire real estate properties in
the Philippines. The easiest way for a foreigner to acquire real estate
properties is to have a Filipino spouse purchase the property. Having a
Filipino partner is also another alternative when acquiring a property.
Either both share the property with equal rights, or the partner owns
51% or more and the remainder is owned by the foreigner. Special visas
are available for foreigners who want complete and total control of a
property. (More information on special visas).
Only Filipino citizens and corporations (at least 60% Philippine-owned)
are entitled to acquire land in the Philippines. As an exception to this
rule, a foreign acquisition of a Philippine real estate is allowed in
the following cases:
Acquisition before the 1935 constitution.
Acquisition thru hereditary succession if the foreign acquire is a legal
or natural heir. This simply means that when your 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 does not any
Filipino citizenship.
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.
Filipinos who are married to aliens who retain their Filipino
citizenship, unless by their act or omission they have renounced their
Filipino citizenship.
Owning of houses or buildings is possible as long as the foreigner does
not own the land on which the house is build. The land can be leased by
the foreigner on a long term contract, and the house can be legally his.
(More information on foreign leasing). top
Special Visas for Foreigners Allowing 100% Condo and Townhouse Ownership
Special visas are available to foreigners that allow complete ownership
and control of Philippine condo and townhouse units. Qualifications for
this visa are as follows:
You must be at least 35 years old.
You should meet the bank deposit requirements which can be withdrawn at
a later date for your investments.
The processing fee and the amount of the deposit/investment needed
depends on whether or not you are married to a Filipino or former
Filipino. This allows you almost all of the investment privileges of a
Filipino citizen. For specifics on the program, check out the Philippine
Retirement Authority website. top
New Dual Citizenship Laws Affecting Property Ownership
Dual citizenship means having two citizenships and passports from two
different countries. Dual citizenship is now available for the
following:
Former Filipino citizens born in the Philippines, but have immigrated to
another country and obtained citizenship of that country.
A foreign spouse married to a Filipino citizen.
Dual citizenship allows the citizenship holder full rights of possession
of Philippine real property. This is a new law and it is still unclear
as to the procedures involved to implement it. top
Foreigner Married to a Filipino Citizen
If holding title as an individual, a typical situation would be that a
foreigner married to a Filipino citizen would hold title in the Filipino
spouse's name. The foreign spouse's name cannot be on the Title but can
be on the contract to buy the property. In the event of death of the
Filipino spouse, the foreign spouse is allowed a reasonable amount of
time to dispose of the property and collect the proceeds or the property
will pass to any Filipino heirs and or relatives. top
Foreign Ownership as a Philippine Corporation
Foreign nationals or corporations may completely own a condominium or
townhouse. To take ownership of a private land, residential house and
lot, and commercial building and lot, foreign nationals or corporations
forms a Philippine corporation. The corporation is to be 40%
foreign-owned (maximum) and 60% Filipino-owned (minimum), and with at
least five [5] incorporators. Upon incorporation, a main bank account
should be tied to it. A foreign national may be the sole person in the
bank account, allowing him/her total control over the funds derived from
the corporation and the income or sale of the asset or property. top
Former Filipino Citizens
Former natural-born Filipino citizens, a.k.a. "Balikbayan", are entitled
to own a maximum of 1,000 square meters of residential land and one
hectare of agricultural or farm land. For business purposes, a maximum
of 5,000 square meters of urban land or three hectares of rural land is
allowed. In the case of married couples, one or both of them may avail
of the privilege provided that if both avail, the total area acquired
shall not exceed the maximum.
In the case of a transferee already owning an urban or rural land for
business or other purposes, he/she shall still be entitled to be a
transferee provided that when added to those already owned by him/her
shall not exceed the maximum. top
Foreign Leasing of Philippine Real Estate Property
A foreign national and or corporation may enter into a lease agreement
with Filipino landowners for an initial period of up to 50 years, and
renewable for another 25 years. top
Taking Title to Philippine Real Estate
The "Deed of Sale" is the document showing legal transfer of real estate
property ownership. The deed of sale is then taken to the Registry of
Deeds to be officially recorded. "Tax Declarations" are sometimes used
but are not very enforceable in court because there may be many others
with a tax declaration claiming ownership to the same property. A
property may be Titled by taking the Tax Declaration to the Registry of
Deeds to process to be officially titled. Always purchase property with
a proper deed of sale if possible, and if there is not one, a tax
declaration is your last choice. Owners must be active in enforcing
their property rights. Possession is 90 percent ownership. If the
property owner can only show a tax declaration as an evidence of
ownership, that means the land is untitled and not registered under the
Torrens system, the buyer will not get as much protection, as his title
will not be absolute and can yield to one who has a better right, like
the person actually possessing and occupying or tilling the land, and
who subsequently applies for the titling of the land in his name. It is
possible for two or more tax declarations issued to different persons
with exactly the same technical description, or referring to the same
property. top
Philippine Law Real Estate Acquisition and Disposition Definitions
Acquisition is the act of procuring or getting a hold of real estate
property. Disposition is the manner of alienation, transfer of
possession and ownership thereof as prescribed by the Philippine law.
The acquisition and disposition of real estate is embodied in written
agreements or contracts voluntarily entered into and subscribed by the
selling and buying parties thereof, before a public officer designated
as the Notary Public of the City or Province where the subject property
is located. Thereafter, the instrument embodying the particular real
estate transaction is required by law to be recorded in the Registry of
Deeds in the City or Province where the real estate property
is involved and located. The Philippines uses the "Torrens" system of
real estate ownership. See below for more information. top
Torrens System of Real Estate Ownership
a.. An adapted form of the "Torrens" system of land registration is used
in the
Philippines. The system was adapted to assure a buyer that if he buys a
land covered by an Original Certificate of Title (OCT) or the more
familiar Transfer Certificate of Title (TCT) issued by the Registry of
Deeds, the same will be absolute, indefeasible and imprescriptibly. The
registered owner will never lose his ownership to squatters no matter
how long such land was illegally occupied. top
Condominium Residential Commercial Development Ownership Law
Presidential Decree No. 957, which regulates the sale of subdivision and
condominium developments, and providing penalties for violations
thereof. The National Housing Authority has exclusive jurisdiction to
regulate real estate trade and business, a function, which is presently
exercised by the Housing and Land Use Regulatory Board (HLURB). Certain
conditions are required before a license to sell condominium development
units and or subdivision development lots and homes is issued to a
Filipino or foreign-owned individual or corporation. The requirements
include a certificate of registration, a performance bond, and an
approval of the building plans and specifications. Violation of these
rules could mean fines, cancellation of license and or imprisonment. top
Typical Transaction Costs - Purchases from Individuals
Capital gains tax - 6% of actual sale price. This is paid by the seller
but in
some cases it might be expected that the buyer pays. This percentage
could differ if the property assessed is being used by a business or is
a title- owned by a corporation, in this case the percentage is 7.5%
Document stamp tax - 1.5% of the actual sale price. This is paid by the
seller
but in some cases it might be expected that the buyer pays.
Transfer tax - 0.5% of the actual sale price.
Registration fee - 0.25% of the actual sale price. top
Typical Transaction Costs - Purchases from Developers
Capital gains tax - 10% of actual sale price. This value might be
expressed as part of the sale price.
Document stamp tax - 1.5% of the actual sale price.
Transfer tax - 0.5% of the actual sale price.
Registration fee - 0.25% of the actual sale price. top
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