Owning a Property in the Philippines

Compared to other countries, the Philippines still has a highly-regulated real estate industry. There are strict rules with regard to purchasing, owning, and investing in real estate and, by default, foreigners are not allowed to own property. Here's a primer to help you understand how to buy, own, and invest in real estate property in the Philippines.

Question 1: I am a former natural-born Philippine 0citizen but have become a naturalized American citizen. Am I still allowed to own land in the Philippines?

Answer: Yes. Any natural-born Philippine citizen who has lost his Philippine citizenship may still own private land in the Philippines up to a maximum area of 5,000 square meters in the case of rural land. In the case of married couples, the total area that both couples are allowed to purchase should not exceed the maximum area mentioned above.

Question 2 Can I purchase several lots located in different cities and municipalities if the total area of all lots does not exceed 5,000 square meters of urban land or three hectares of rural land?

Answer: A former natural-born Philippine citizen can acquire not more than two lots situated in different municipalities or cities and the total area of the two lots should not exceed 5,000 square meters of urban land or three hectares of rural land.

Question 3: If I am allowed to own a maximum of two lots situated in different municipalities or cities, can I own a 5,000-square-meter urban lot and three hectares of rural land and vice versa.

Answer: No. A former natural-born Philippine citizen who has already acquired urban land shall be disqualified from acquiring rural land and vice versa.

Question 4: Is there a way for a former natural-born Philippine citizen to own more than 5,000 square meters of urban land or three hectares of rural land?

Answer: Yes. If a former natural-born Philippine citizen reacquires Philippine citizenship law, he can acquire land without area limit.

Question 5: When my children were born, I was already an American citizen. Can they inherit my land in the Philippines?

Answer: Yes. Foreign nationals (even if they were not former natural-born Philippine citizens) can own land in the Philippines if they acquire it by inheritance. These nationals should, however, inherit the property by intestate succession. Intestate succession means that the foreign national inherits the property because he/she is an heir under Philippine law. Naming one’s heir by executing a “last Will and Testament” or a “Living Will” will not work to validly transfer real property in the Philippines to a foreign national.

Question 6: My husband is a natural-born American citizen. Can he buy a condominium unit in the Philippines and have the title in his name?

Answer: Yes. The land on which a condominium building stands is always owned by a condominium corporation. When a person buys a condominium unit, he automatically becomes a stock-holder in the corporation which owns the land. Under Philippine law, foreigners are allowed to become stockholders of a corporation which own land but only up to a maximum of forty percent (40%) of the shares of the corporation. Foreigners, therefore, are allowed to own condominium units provided the total floor area owned by all foreigners in the condominium building does not exceed forty percent (40%).

Many Filipinos living abroad are usually confronted with the question of whether their children are considered Filipino citizens. The question is engendered in the minds of expatriate Filipinos because any of the following circumstances obtain:

• Their child was born outside of the Philippines;
• Their child was born with foreign parent and one Filipino parent; and
• Their child is already considered a citizen of the foreign country where they reside.

Below is a primer on issues about Filipino citizenship relevant to Filipino expats with children born outside of the Philippines.

Question 1: Is Philippine citizenship acquired by blood or by country of birth?

Answer: Philippine citizenship is acquired by blood (jus sanguini). A child is deemed a Filipino citizen because at least one of his parents was a Filipino citizen at the time of his birth. Even if the child was born outside the Philippines, for as long as at least one of his parents was a Filipino citizen. On the other hand, if both parents are non-Filipinos, the child is not a Filipino citizen even if he was born in the Philippines.

Question 2: What are the conditions that should be met for my child to be deemed a Filipino citizen?

Answer Your child is a Filipino citizen if he qualifies under any of the following conditions:

• Your child was born after January 17, 1973, with a Filipino father or a Filipino mother. In other words, if a child was born after January 17, 1973, he is a Filipino citizen if he has at least one parent who is a Filipino citizen at the time of his birth;
• Your child was born before January 17, 1973, with a Filipino mother and your child elected Philippine citizenship when he reached his 21st birthday. If your child was born before January 17, 1973, with a Filipino father, he is a Filipino citizen without any need of electing Filipino citizenship upon reaching the age of 21;

Incidentally, January 17, 1973, is the date when the 1973 Philippine Constitution came into effect; thus the importance of the date.

Question 3: Our son was born in the US at the time when my wife and I were still Filipino citizens. One week after our son’s birth, however, my wife and I took our oath as US citizens. Did our son lose his Philippine citizenship when we became American citizens?

Answer No. The child was vested with the Philippine citizenship at the time of his birth. He does not lose his Philippine citizenship even if the parents acquire foreign citizenship after his birth.

Question 4: My daughter was born in the US at the time when my wife and I were still Filipino citizens. My daughter has been using a US passport for 20 years. She has never visited the Philippines. Is my daughter considered a Philippine citizen even if she already an American citizen.

Answer Yes. Philippine law allows dual citizenship. A child can both be an American citizen and a Filipino citizen at the same time. Under present laws, a person loses his Philippine citizenship if he renounces it. Using a US passport exclusively and not visiting Philippines does not amount to a renunciation of Philippine citizenship.

Question 5: If my child is born in the US at the time when my wife and I are still Filipino citizens, what should we do to document his Philippine citizenship?

Answer A copy of the child’s birth certificate should be submitted to the nearest Philippine consulate will transmit the birth certificate to the National Statistics Office in the Philippines for registration purposes.

Foreign Corporations

Question 1: Can foreign corporations acquire or own land in the Philippines?

Answer: Yes, provided the following requirements are met: (a) it must be a private land, which means any land of private ownership; and (b) the foreign equity in the corporation must not exceed forty percent (40%).

Question 2: What will happen if foreign ownership exceeds forty percent (40%)?

Answer The effect would be that the foreign corporation would lose its capacity to hold the private land. They may, however, be granted temporary rights such as a lease contract which is not prohibited by the Constitution.

Question 3: What are the other exceptions to the ownership of land by foreign investors and corporations?

Answer

1. Acquisition through hereditary succession;
2. Purchase by a former natural-born Filipino citizen pursuant to the Dual Citizenship Law which states that a former Filipino re-acquiring his Filipino Citizenship shall be deemed not to have lost his Philippine citizenship, thus enabling them to enjoy all the rights and privileges of a Filipino;
3. If a former natural-born Filipino who has become a naturalized citizen of another state opts not to re-acquire Filipino citizenship according to the Dual Citizenship Act, he may nonetheless own land but limited to the following according to BP 185 and RA 8179):
   1. For residential use:
      • Up to 1,000 square meters of residential land
      • Up to 1 hectare of agricultural land
   2. For business or commercial use
      • Up to 5,000 square meters of urban land
      • Up to 3 hectares of rural land
4. Purchase of not more than 40% interest in a condominium project; and
5. Ownership through Filipinos who are married to aliens who retain their Filipino citizenship

Question 4: Can foreign corporations own real properties in the Philippines other

Answer Yes. Foreign corporations can acquire other immovable or real properties such as buildings and other improvements on the land, including condominium units.

NEVERTHELESS, buying a property in Philippines is nowhere close to being a safe procedure. Not even getting yourself a lawyer is enough today. Only the most professional solicitors will be able to ensure you are a hundred percent protected.

At The Firm we strongly believe we are the best to look after your interests and would be privileged to help you with your purchase!

Better SAFE than SORRY!

What we offer

• A 100% Independent service - We are not connected to any Estate Agency or Developer whatsoever.
• Experience in conveyancing
• A multi-skilled staff, comprising experienced Lawyers, Paralegal, Administrative and Secretarial staff.

What services we offer

• Verification
• Purchase Legal Representation
• Mortgage Arrangement
• Utilities Connection
• Fiscal Representation