If one does an internet search about buying a home in the Philippines, the results can be more than confusing.
There are numerous articles about how to get around the property laws in the Philippines. None of these articles are truthful.
Foreigner Ownership of Land in the Philippines?
It's absolutely impossible for a foreigner to buy and own land in the Philippines despite what you might hear to the contrary.
“But, I can set up a corporation and the corporation can own property”.
Yes, you can set up a corporation. You can only own 40% of the Corporation, however. The other 60% must be owned by a Filipino. And yes, it can own property.
However, if you set that Corporation up purely so that you can own a piece of property that you can call your own and build your home on, you are, under Philippine law, operating illegally.
The Philippines constitution reserves all land in the Country for Filipinos only.
Foreigners are not allowed to own land. Period.
To prevent foreigners from trying “clever tricks” to get around the law, the Government and the courts will take the position that if you came up with a clever trick to get around the constitution, then that clever trick is illegal.
And that is basically their blanket way of making anything you might cleverly come up with (to get around the law regarding property ownership) illegal.
Can a Foreigner own Property in the Philippines?
If, what you mean by
There is only ONE exception to this and that is contained in Article XII of the Constitution Section 7 which allows foreign citizens to own land by way of legal inheritance.
HOWEVER, there is only one specific way that this legal inheritance occurs.
You cannot get married, have a will written leaving you the land and then, when your spouse dies, you become a legal owner. That is NOT legal.
Section 7 specifically says:
” Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain”.
And the key words are: “hereditary succession”.
Legally, what this means is that a foreigner can acquire land through intestate inheritance. These are default laws on inheritance which are not transfers of ownership by way of a last will and testament.
In other words, if your spouse does not leave a will regarding that property and if you are the next in line in succession (which means that she has no living parents of siblings), then you will inherit the land. If there are others in the line of succession, you will not. She cannot specifically will it to you as the Courts will view that non-constitutional as it is a way of getting around the rest of the constitution.
Can you Lease?
The law allows for foreigners to lease a piece of land for 25 years and renew the lease for another 25 years. On that land, you can build a house and the house will be owned by you. However, when the lease is over, you either have to demolish, remove or do something to get the house off that land, or the house becomes lost to you.
You can also own an Apartment. The law allows for 40% of apartments in any one complex to be sold to a foreigner. This follows the same 60/40 business ownership law. Essentially, 40% of the apartment complex ownership can be owned by foreigners.
Is Leasing a piece of Land safe?
Yes, and no. Depending upon who you lease the land from, the lease may be valid or may not be.
Here are the risks:
- The “landowner” is not really the landowner. Check titles carefully!
- The landowner passes away and the inheritors claim that they want you off the land. While that might be illegal, if they lock you out, it is a very expensive court battle to get back in.
- The title appears good, but someone else makes claims against the title and demands you leave.
- The land title is invalid for a variety of reasons (e.g. it is in a protected area or is in land that has been given to the indigenous people).
- If you are leasing land, it is much safer to lease it from a development that was set up specifically for leasing land to foreigners.
One example of such a project is Anahaw Village near Subic Bay.
Or alternatively, you can lease land from a Freeport Zone like Clark or Subic Bay Freeport Zone.
Whatever you do, always ensure you obtain a competent attorney to assist you in any lease you might sign.
But remember: If that attorney says that he can get around the law for you, he is not being honest.
Sections 3 and 8 of Article XII of the Constitution restrict the ownership of land by individuals to Filipinos and former Filipinos.
No law can override the constitution.