Under current Philippine Law, Philippine citizens can fully own real estate / property in the Philippines; foreigners can own up to 40% of the value of real estate / property in the Philippines (read next item for exceptions).
Three exceptions mean a foreigner can own real / estate property in the Philippines under Philippine Law:
Under the present Philippine Law (excluding the exceptions above) foreign investment in general real estate / property may not exceed 40% of the total value of the real estate / property, whether the investment is by a foreign individual or a foreign corporation.
Note: There are proposals to revise the current law, to allow 100% foreign ownership of Philippine real estate / property under certain conditions, but these proposed revisions have not yet been passed and details of the proposed revisions are still being debated. Whilst real estate developers and real estate / property brokers are mostly in favor of a revision of the law, to allow foreigners to fully own real estate / property, there are many who vehemently object to such a change in the law, with good reason.
Once you have found an investment that appears to satisfy your needs, engage a licensed real estate broker. Whilst real estate / property may be advertised for sale by anyone, the actual real estate / property investment process should be channeled through a Licensed Real Estate Broker (registered with the Real Estate Brokers Association of the Philippines (REBAP)) so that you are offered measurable protection. The Real Estate Brokers Association of the Philippines provides the investor with a high level of quality assurance that an investment transaction is valid, and provides a channel for recourse & retribution should errors be made. Always ask you real estate / property sale agent for the REBAP License number of the Real Estate Broker who will oversee the investment process.
Verify that the real estate / property is properly "Titled". Land "Title" was once a nebulous term for real estate / property in the Philippines but today the Registry of Deeds is fully computerized and 99% reliable. However, there are some people who still hold historic, land "Title" that is not properly registered. In order for real estate / property to be Titled (and therefore available for investment/transfer of ownership) then a Tax Declaration should be available showing that all Property Tax has been paid. Note: some real estate / property is offered for sale because the owner cannot afford to pay the Property Tax, thus there may be an outstanding Property Tax liability that needs to be satisfied before a land Title can be confirmed and transferred to a new owner. Be extra careful of any offer of real estate / property for sale where a current Tax Declaration is not available; ask your selected real estate broker to verify the status with the Registry of Deeds in such cases, to ensure the real estate / property is actually registered to the party claiming to own it.
Real estate / property for sale covered by a Condominium Certificate Of Title (CCT) allows 100% foreign ownership as well as ownership by Philippine citizens. Qualifying condominium developments will be registered with the Housing and Land Use Regulatory Board (HLURB) and may include conventional high-rise condominium developments or residential resort condominium developments. Qualifying condominium developments will be issued a License by the HLURB upon satisfying certain criteria. Before investing in real estate / property for sale that is claimed by the seller to be covered by a Condominium Certificate of Title, ask your real estate broker to verify the currency and validity of the associated HLURB License.
Real estate / property for sale with associated foreshore lease may not be legal. Under Philippine Law it is not possible to "own" a beach or water rights. However, in some cases a Foreshore Lease may be associated with real estate / property, which confirms on the Foreshore Lease owner the right to control the management and development of the beach and water rights, but strictly speaking this does not prevent someone: landing on the beach and or having right of way to peacefully pass along beach and or to transit the water off the beach. Also, a Foreshore Lease is not necessarily automatically transferable if the associated real estate / property is sold to a new owner. Before investing in real estate / property that is claimed to include a Foreshore Lease, ask your real estate broker to confirm the currency and transferability of the Foreshore Lease.
Unless covered by an exception, beach front real estate / property for sale, that is located within 20 meters of the tidal high-water mark, cannot be Titled. Beach front structures that are not embraced by such an exception, built within 20 meters of the tidal high-water mark, may be demolished by the Municipality without compensation to the "owner". Before investing in real estate / property that lies within 20 meters of the tidal high-water mark, ask your real estate broker to confirm that an exception currently exists that embraces the entirety of structure(s) for sale.
Real estate / property for sale by a family or group of individuals presents a special challenge. A declaration by one (or more) member(s) of a family or group, which suggests that all members of the family or group are in favor of the transfer of Title of the real estate / property, may not by itself be sufficient. If real estate / property is owned by a family or group of individuals then it is essential to obtain written consent to sell from ALL family members or ALL individuals within the group before an investment should be confirmed.
Retiring to the Philippines? As an applicant for a Special Resident Retirement Visa (“SRRV”) you must place an amount of cash in a Time Deposit in order to qualify. The amount varies depending on your age and whether or not you choose to have your foreign pension directed to a Philippine bank account. The trick is that the amount in the SRRV Time Deposit can only be accessible to you if you invest it in either, a condominium or, a long term lease (say, 25 years) on a property, e.g house and lot owned by a Philippines national – no foreigner can absolutely own land in the Philippines. Note: you do not have to actually live in the condominium or leased property you just have have the paperwork that says you own the condominium or lease.
For more details, contact the Philippine Retirement Authority ("PRA"), that has offices in most major cities, and ask about the SRRV.
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