Can Foreigners Own Property in the Philippines?
More and more foreigners are now becoming interested in buying properties in the Philippines because of many factors like: our tropical climate, the warmth of the Filipinos and great opportunities for investments. On the other hand, many people are still not sure whether foreigners can own property in the country. The answer is yes, foreigners may own real estate property in the Philippines, but they are not allowed to buy and own land. Foreign ownership of property in our country is not absolute and subject to restrictions.
Non-Filipinos may purchase and own condominium units built on Philippine soil. The ownership of condominium units is still subject to a 40% restriction for foreigners because a condominium project is similar to a corporation set up where 60% must be owned by Filipinos. Although it is clear from our laws that foreigners are not allowed to own land and their ownership of other forms of real estate properties is limited, these rules are subject to certain limitations.
Foreigners may acquire and buy real estate property in the Philippines under the following conditions:
- The property was acquired under the 1935 Constitution.
- Acquiring real property through hereditary succession.
This means that a person (not Filipino) inherited the property or land which may have been acquired under the 1935 Philippine Constitution.
- Not more than 40% of the units of a condominium project.
- If the property was bought by the owner when he or she was still a natural born Filipino citizen but subject to the restrictions provided by law.
- For former natural born citizens, the ownership of an urban land shall be limited to 1,000 square meters while for rural land, it must not exceed 1 hectare and must be used exclusively for residential purpose in accordance with Batas Pambansa Bilang 185.
For married couples under this rule, one or both may own land as long as the total area of the combined property shall not go beyond the maximum limit.
For Filipinos who married a foreigner, Philippine citizenship is not automatically relinquished. Under Article IV Section 4 of the Philippine Constitution, “Citizens of the Philippines who marry aliens shall retain their citizenship, unless by their act or omission, they are deemed, under the law, to have renounced it.” An example of renouncing Philippine citizenship is when a spouse would swear allegiance to become a citizen of the spouse’s country. Any person although married to a foreigner can buy and own land in the Philippines for as long as they have not renounced said citizenship. They may acquire and own land without restrictions since they are deemed to have retained their citizenship.
- Under the Dual Citizenship Law of 2003, natural born Filipinos who eventually lost their Philippine citizenship to another country because of naturalization may regain their Filipino citizenship after swearing allegiance to the Philippines. After the reacquisition of the Philippine citizenship, they are again considered as citizens and may own real property without any constraints.
- Foreigners may own houses or building but not the land where the structures are built on. A foreign individual or corporation may only lease and not own Philippine land. Such lease shall be in a long-term contract which must be good for 50 years and after which, the rent is renewable every 25 years.
There has been a long-standing debate whether Philippine laws should be changed to accommodate and expand foreign ownership in the country. Most of the advocates of the proposal are arguing that lifting the restrictions on foreign ownership would eventually result in more investments from overseas. However, those who are against it would dispute such claims stating that business ventures from foreign investors are not dependent on property ownership and invoke the importance of national patrimony. Given the mentioned restrictions on foreign ownership of land, do you think it is enough to preserve our national patrimony? And given that some of our neighboring countries such as Malaysia, Taiwan, Singapore, and Thailand opened up and allowed foreigners to own land in their territory, do you think that the Philippines should do the same?
If you are interested in buying real estate property and have questions about the legality of owning such, you may contact us to get more information about this matter.