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🏠 Property Ownership for Foreigners

Understanding Philippine constitutional restrictions and legal options for real estate

⚠️ Constitutional Restriction

The 1987 Philippine Constitution prohibits foreigners from owning land. This cannot be circumvented through any legal structure. However, there are legitimate alternatives for foreign property ownership.

What Foreigners CAN Own

✅ Condominium Units

Foreigners can own condo units up to 40% of the building's total floor area.

  • Ownership: Freehold title in your name
  • Limit: 40% foreign ownership per building
  • Verification: Request certificate from developer
  • Registration: Title at Registry of Deeds
  • Inheritance: Can pass to foreign heirs

⚡ Long-Term Land Lease

Foreigners can lease land for up to 50 years, renewable for another 25 years.

  • Maximum Term: 50 + 25 years = 75 years
  • Registration: Notarized + registered with RD
  • Building: Can build structures on leased land
  • Transfer: Lease rights can be transferred
  • Risk: Lease may not be renewed

✅ Corporation Ownership (60/40)

A Philippine corporation with 60% Filipino ownership can own land.

  • Structure: 60% Filipino, 40% Foreign
  • Control: Limited for foreign shareholders
  • Capital: Minimum PHP 200,000
  • Annual: SEC/BIR compliance required
  • Risk: Depends on Filipino partners

What Foreigners CANNOT Own

❌ Land (Any Type)

Foreigners cannot own any land in the Philippines, including:

  • Residential lots
  • Agricultural land
  • Commercial land
  • Beach/waterfront property
  • Land through "dummy" corporations

❌ Houses on Land You Don't Own

While you can technically own a house structure, it's meaningless without land rights:

  • House titled in your name = risky
  • No land rights = no real ownership
  • Landowner controls your property
  • Common scam target for foreigners

Common Scams & Pitfalls

🚨 "Girlfriend/Wife Title" Scheme

Putting property in your Filipina partner's name. If relationship ends, you lose everything. This is the #1 cause of foreigner property loss in the Philippines. There is NO legal recourse if the relationship fails.

🚨 Dummy Corporation

Using "borrowed" Filipino names to create a 60/40 corporation. This is illegal and can result in property forfeiture, fines, and deportation. The "dummy" Filipinos can legally claim the property.

🚨 "Special" Foreigner Land Title

Agents claiming they can get you special permission to own land. This does not exist. Anyone offering this is either scamming you or creating fraudulent documents.

🚨 Unsigned/Unregistered Lease

Lease agreements that aren't notarized and registered with the Registry of Deeds offer no legal protection. Always ensure proper registration.

Safe Property Investment Strategies

Recommended Approach for Foreigners

  1. Buy a Condominium: The safest and most straightforward option. Verify 40% foreign quota hasn't been reached. Get title in your name.
  2. Lease Land + Build: If you want a house, negotiate a long-term lease (50 years) with clear terms, properly notarized and registered. Build your house on the leased land.
  3. Marry a Filipino Citizen: Your Filipino spouse can own land. However, if divorce/annulment occurs, the property remains with the Filipino spouse by law.
  4. Former Filipino Citizens: Can own land up to certain limits for residential purposes under RA 8179 (BP 185).

⚠️ Due Diligence Checklist

Key Costs

Documentary Stamp Tax 1.5% of selling price or zonal value
Transfer Tax 0.5-0.75% (varies by LGU)
Registration Fee ~0.25% of property value
Notarial Fees 1-2% of property value
Capital Gains Tax 6% (typically seller's responsibility)