Real Estate Laws in the Philippines

I'm often asked if foreigners are allowed to buy land in the Philippines. I always tell them, no. Except  if  a) he/she has a business in the Philippines and he/she will form a corporation which is 60% owned by Filipino citizen/s and 40% owned by foreigners;  or b) if he/she is married to a Filipino citizen.

Otherwise, please do not believe what others will tell you. Unless of course, if you do not mind losing your hard earned money. :(

Foreigners can buy condominium units without a problem.

Below is an excerpt of Philippine Real Estate Laws. And I hope that this will help those who are not  Filipino citizens who want to purchase land in our country.


WHO CAN OWN LANDS IN THE PHILIPPINES:

Only Philippine Nationals can own land in the Philippines.

WHO ARE CONSIDERED PHILIPPINE NATIONALS: (R.A. 8197)

1.Filipino citizens.

2.Corporation organized under Philippine laws, 60% of the capital stock outstanding and entitled to vote is owned and held by Philippine citizens.

3.Corporation organized abroad and registered as doing business in the Philippines under the Corporation Code, 100% of the capital stock outstanding and entitled to vote is wholly owned by Philippine   citizens.

4.Domestic Partnership wholly owned by Philippine citizens.

WHO ARE CONSIDERED FILIPINO CITIZENS: (Art. IV., Sec. 1 - 1987 Constitution)

  * Those who are citizens of the Philippines at the time of the adoption of the 1987 Constitution.

  * Those whose fathers or mothers are the citizens.

  * Those born before January 17, 1973 , of Filipino mothers, who elect Philippine citizenship upon   reaching the age of majority; and

  * Those who are naturalized in accordance with Law.

  * Those born in the Philippines of foreign parents who before the adoption of said constitution had been elected to public office in the Philippines.


EXCEPTION TO THE RULE THAT ALIENS CANNOT OWN LAND IN THE PHILIPPINES:

Aliens may own lands in the Philippines only under the following circumstances:

1)Former Natural born Filipino citizens.

      * Limitations to ownership as provided by B.P. Blg. 185

      a) The land shall be used by him/her as residence; and

      b) The area shall not exceed 1000 square meters if an urban land or  1 hectare if a rural land.

      c) If the former natural born Filipino citizens already owns urban or rural land for residential purpose , he / she may still be entitled to be a transferee of additional urban or rural lands, provided that the total land area owned by him/her will not exceed the allowed maximum limit.

      d) In case of married couples, one of them may avail of the  privilege herein granted provided, that if both shall avail of the same, the total area acquired shall not exceed the maximum area fixed herein;

      e) He/she cannot acquire more than 2 lots;

      f) If he/she acquires 2 lots, the same must be situated in different  municipalities or cities;

      g) If he/she already acquired urban land, he/she shall be  disqualified from acquiring rural land and vice versa.


       * Limitations to Ownership as provided by R.A. No. 8179:


        Land acquired under Act shall be primarily, directly and actually used by the transferee in the performance or conduct of his business or commercial activities in the broad area of agriculture, industry, and services, including the Lease of land, but excluding the buying and selling thereof.

(Section 5, Rule XII , IRR of RA 7042, as amended by 8179)

         The area shall not exceed 5,000 square meters if an urban land or 3 hectares if a rural land. In case he/she already owns urban or rural lands for business or other purposes, he/she shall still be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned by him shall not exceed the maximum areas allowed.

         He / she cannot acquire more than 2 lots.

         In case of married couples, one of them may avail of the privilege herein granted provided, that if both shall avail of the same, the total area acquired shall not exceed the maximum area fixed herein.

         A transferee who has already acquired urban land shall be disqualified from acquiring rural lands and vice versa. However, if   the transferee has disposed of his urban land, he may still acquire rural land and vice versa, provided that this will be used for business or other purposes.

2) If the foreigner acquired the same through succession as of the

legal heirs of the deceased.

3) Dual Citizenship under the Dual Citizenship Law (RA 9225 effective on September 17, 2003.)

     Filipinos who had lost their Philippine citizenship by  acquisition of citizenship of another country may reacquire their citizenship under this law without renouncing their foreign citizenship. This reacquisition of Filipino citizenship shall grant full civil and political rights to the Filipino dual citizen,
including the right to own private lands and properties in the Philippines, without limitation other than those normally imposed on Filipino citizens.

4) Foreigners can acquire condominiums but up to a certain extent only;

5) Lands acquired by Americans prior to July 4, 1946 (vested rights).

6) Lands acquired by Americans before July 3, 1974 provided the following requisites are present:

       6.1.They are formerly Filipino citizens OR who on May 27, 1976 had continously resided in the Philippines for at least 20 years OR who have become permanents residents of the Philippines;AND

       6.2.Had acquired private residential lands not exceeding 5,000 square meters for a family dwelling. (P.D. No. 173)


MEANING OF NATURAL BORN CITIZENS OF THE PHILIPPINES:

Natural born citizens are those who are citizens of the Philippines from birth without having to perform an act to acquire or perfect their citizenship. Those who elect Philippine citizenship shall be deemed natural born-citizens. (Sec. 2, 1987 Constitution)