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Who Can Buy Real Estate in the Philippines?

One of the most basic questions that have been commonly asked by real estate buyers is about who are allowed to own real estate in the Philippines. This question is foremost in the minds of OFWs, especially those who have changed citizenship and foreigners and their spouses.  There have also been several questions about what limitations dual citizens are allowed.

The General Rule of Ownership

In general, individual Filipinos are allowed to buy properties in the Philippines. Filipinos who marry foreigners, unless has renounced his or her Filipinos citizenship, shall still be afforded full ownership rights of real properties as a Filipino.

If one is a foreigner, one may not buy real estate directly.  There are a few legal ways around this issue, though. One is for a company, which the foreigner partly owns and in which he or she may only have a forty percent (40%) maximum stake, may buy the property which s/he can then use.

Limitations for Former Filipino Citizens

Those who have changed citizenship are still entitled to buy properties in the country. However, some limitations have been imposed, especially with regards to the maximum size of the properties they are allowed to buy. For residential purposes, 1,000 square meters of urban land or one (1) hectare of rural land is allowed. For business purposes, 5,000 square meters of urban land or three (3) hectares of rural land may be purchased.

“Business purposes” is defined as the use of the land primarily, directly, and actually in the conduct of business or commercial activities in agriculture, industry and services, including the lease of land. This does not include the buying and selling of properties.

If a married couple where both spouses are former Filipino citizens, one or both of them may avail of the privilege, provided that the total property size shall not exceed the maximum area allowed.

A former Filipino citizen (also called a “transferee”) who owned properties before changing citizenship, be it for business or residential purposes, may still purchase additional properties provided that the total acquisition, including that of the previously owned real estate, shall not exceed the maximum area allowed by former citizens.

Note, however, that a transferee who has bought a residential property in an urban area shall not be allowed to buy another one in a rural area and vice versa. Similarly, a transferee who has bought real estate for business purposes in a rural area may not buy another in an urban area and vice versa. But if a transferee has acquired a residential property, he or she may still buy another land for business purposes.

Rules for Dual-Citizenship

Dual citizenship is simply defined as an individual bearing two citizenships and passports from two different countries. Former Filipino citizens born in the Philippines but now living in another country and has become a citizen there may obtain dual citizenship under new Philippine laws. The same privilege is afforded to foreign spouses married to a Filipino citizen. Dual citizenship, in effect, gives the individual a full status as a Filipino, thus has the property ownership rights of such. There will no longer be limitations to ownership as that of a former Filipino.

Non-Filipinos / Foreigners

In general, foreigners are not allowed to own properties in the Philippines except under the following conditions:

    • Acquisition before the 1935 Constitution
    • Acquisition thru hereditary succession if the alien is a legal heir
    • Purchase a condominium unit which covers no more than a forty percent interest in the whole condominium project.
    • Purchase by former natural-born Filipino citizens subject to the limitations prescribed by law.

Actually, foreigners are allowed to legally own buildings and houses even if the land with which these stand are not owned by him or her. In such cases, the land may be leased to the said foreigner for a period of 50 years renewable for another 25 years.

In the case of persons married to Filipinos, the title of properties bought by the couple may be placed under the name of the Filipino spouse alone. The alien’s name may appear on the contract of sale.  In the event of death of the Filipino partner, the foreigner should dispose of the property in a reasonable amount of time, else the property will pass to any of the Filipino heirs.

Foreigners may also acquire land by forming a corporation of which he or she may own only 40% maximum as already stated above. This company should have at least five incorporators and should open a bank account for the company. The alien may, however, be the sole holder of the bank account of the company giving him full control over the funds, as well as, the income of the company. The company may choose to lease the land, in which case, there are no limitations as to the length of period with which the property is to be leased.

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