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Real Estate in the Philippines

Borra Law > Real Estate in the Philippines
Ownership of Philippine Land

Ownership of Philippine land is generally restricted to Filipinos and Philippine-owned corporations (60% owned by Filipinos), save for certain exceptions. Foreigners who have acquired Philippine land under the following conditions are exempted from the ownership restriction:

  1. Foreigners who have acquired the land prior to the 1935 Constitution;
  2. Foreigners who have acquired the land through hereditary succession as a legal or natural heir; and
  3. Foreigners who acquired the land when they were still Filipino citizens.

Despite the ownership restriction on Philippine land, foreigners can still own real estate property in the Philippines, such as condominiums, houses, and buildings. Foreigners can own up to 40% of the condominium development project through a Condominium Certificate of Title. Foreigners can also own houses and buildings because these are considered improvements. In the title, land ownership will remain with a Filipino or Filipino-owned corporation, and an annotation will be made at the back of the title that the improvement (house or building) is owned by the foreigner.

You still want to own Philippine land?

Foreigners have two options:

 

  1. Own land in the Philippines through a Philippine-owned corporation with 40% foreign equity; or
  2. Lease Philippine land under the Investor’s Lease Act for a period of 50 years, renewable for another 25 years.

Some foreigners, in order to own land in the Philippines, just look for a Filipino as a nominee to own the land for the record. However, should this Filipino decide to claim this land as his own, Philippine courts will not protect the land ownership of the foreigner (even if it was the foreigner's money that was used to buy the land) because of the Anti-Dummy Law (Commonwealth Act No. 108, as amended).

If you are a foreigner who really wants to possess land in the Philippines, we can help you through a Philippine-owned corporation. We can provide you with an appropriate legal structure, where you can exercise full rights over the property with documents that can hold up in court, such as loans, pledges, special powers of attorney, and the like.

Are you a foreigner who wants to own land in the Philippines?

Found land? Conduct due diligence.

If you’ve found great land by the beach and the price is so affordable, conduct due diligence before buying anything.

Some real property issues encountered when buying land are:

  1. There is no title, but there is a tax declaration from the assessor’s office showing that the seller has been paying real property taxes.
  2. There is a title but there are liens, encumbrances and annotations on the title, such as a real estate mortgage, notice of adverse claim, or notice of lis pendens.

A simple tax declaration is not evidence of title ownership. There have been instances where Filipinos claiming ownership over a land under a tax declaration have been declared by the government as inalienable forest land, not subject to disposition. In that case, instead of paying real property taxes, you are required to apply for a Forest Land Use Agreement with the Department of Environment and Natural Resources (DENR), and pay DENR fees instead of real property taxes. For this reason, it is important to conduct due diligence before purchasing any land.

A title, on the other hand, is evidence of land ownership. However, be wary of fake and spurious titles. Also, when the title has an annotation such as a mortgage, notice of adverse claim, or notice of lis pendens, you buy the land, subject to the mortgage, the adverse claim, or the outcome of the pending court case. We can help you conduct due diligence and cancel annotations such as notices of lis pendens or adverse claims before making a major investment in purchasing any property.

Do you want to conduct due diligence over Metro Manila land?

Do you want to conduct due diligence over non-Metro Manila land?

Do you need help with real estate issues?