Buying Property In The Philippines

Are you a foreigner looking to buy property in the Philippines? This guide will help you navigate the complex foreign ownership rules and understand your options for buying land, purchasing a house, or buying a condo unit. 

Can a Foreigner Own Property in the Philippines?

Maybe. To clarify, only Filipino citizens or corporations with at least 60% Filipino ownership can own land in the Philippines. However, foreigners are not excluded from owning property and real estate. Foreigners can own condominiums and houses sitting on leased land.

Philippine property ownership rights are protected in the 1987 Philippine Constitution.

The Supreme Court justified, “The purpose of prohibiting the transfer of lands to foreigners is to uphold the conservation of our national patrimony and ensure that agricultural resources remain in the hands of Filipino citizens.”

Can a foreigner set up a company and buy land in the Philippines?

Suppose you’re a corporation interested in acquiring land or real estate through assertive ownership structures. In that case, you should consider the Philippines’ Anti-Dummy Law provisions. It’ll help you determine the appropriate course of action to pursue.

One significant constraint imposed by this law pertains to the limitation on the number of foreign members allowed on the Board of Directors of a landholding company, which is capped at 40% foreign participation. Another issue to consider is the potential forfeiture of the property in case of violating the law’s provisions.

Can an expat buy and own land under a Filipino spouse’s name?

You can register the title in your spouse’s name if you want to buy a property. However, as the property will be registered under the spouse’s name, a foreigner will have limited control and ownership rights over the property.

The Philippine spouse would have the final say on all legal matters associated with the land. If they want to sell, they can, even if you disagree. In case of marital issues or divorce, there may be a risk of property disputes where the foreigner could potentially lose their investment.

You would inherit the land in the unfortunate event of your spouse’s demise. However, you could not own and live on the land. The constitution still only allows citizen ownership. A foreigner with a diseased spouse would have the following options for their property:

• Dispose of the property and collect the proceeds,
• Transfer the ownership to your children, or
• Transfer the title to your spouse’s relatives if you have no children.

Are prenups valid in the Philippines?

Yes, prenup agreements that are legally sound and are prepared in accordance with Philippine law are enforceable by the courts. However, like any legal contract, details matter. To ensure that your prenup is in compliance, always use a attorney.

Prenups here are more enforceable than ones in the West, where a judge can overturn an agreement…as long as the prenup agreement is executed according to the law of the Philippines…it becomes very enforceable.

Dumaguete Family Attorney

Inheriting Property if a Filipino Spouse of a Foreign Expat dies

The 1887 constitution explicitly prohibits individuals who are not Filipino citizens from acquiring property in the Philippines. However, a slight exception is outlined in Article XII, Section 7 of the same constitution, which allows heirs, regardless of their nationality, to inherit property if the deceased Filipino spouse did not leave a will.

It means a foreign individual can acquire real estate in the Philippines if they’re a lawful or natural heir through hereditary inheritance AND NOT by being explicitly named in the “Last Will and Testament” of a property owner.

Article 887 of the New Civil Code of the Philippines states that “legitimate children and descendants, with regard to their legitimate parents and ascendants,” are mandatory heirs.

Succession of property in the Philippines follows a hierarchy:

1. Legitimate children or descendants of the deceased;
2. Legitimate parents or ascendants;
3. Illegitimate children or descendants;
4. Surviving spouse;
5. Siblings (brothers and sisters), nephews, and nieces;
6. Other collateral relatives within the fifth degree; and finally,
7. The State (Philippines).

Under the hierarchy above, foreigners can possess and acquire real property, whether farmland or private land, inherited from their deceased Filipino spouse, subject to the shares of any surviving relatives.

The overview above concerns a foreign expat inheriting last from their Filipino spouse. This does not allow expats to inherit land from someone they were not married to.

The Philippine Supreme Court ruled in 1982 that foreigners inheriting land from any Filipino who wasn’t their spouse would be unconstitutional.

“Any alien would be able to circumvent the prohibition by paying money to a Philippine landowner in exchange for a devise of a piece of land.”

Ramirez vs. Vda. de Ramirez, G.R. No. L-27952

Ownership by a Foreigner who was a Natural-Born Filipino

According to the Philippine Constitution, a natural-born Filipino citizen refers to an individual who is a citizen of the Philippines from birth without the need to take any actions to acquire or perfect their Philippine citizenship. This definition encompasses the following criteria:

• Filipino citizens who have possessed dual citizenship
• Filipino citizens who have possessed derivative citizenship
• Married a foreign national but retained their Filipino citizenship (they have not yet acquired foreign citizenship)
• A naturalized citizen according to the Philippines’ Naturalization Law
• A Filipino citizen during the time of the 1987 Constitution adoption
• Those who were born before the signing of the 1973 Philippine Constitution (January 17, 1973) and have decided to elect Filipino citizenship by the age of 18 years old (they may be born anywhere in the world, as long as to a Filipino citizen; regardless if father or mother)
• Those who were born after the signing of the 1973 Philippine Constitution (January 17, 1973), whose parents were Filipino citizens at the time of their birth (regardless if father or mother)