Philippine Real Estate Laws for Foreign Ownership
Thinking of investing in property in the Philippines as a foreigner? Whether you’re looking for a beachfront condo in Boracay, a retirement home in Baguio, or an investment property in Metro Manila, it’s important to understand what the law says about foreign ownership of real estate in the Philippines.
Can Foreigners Own Land in the Philippines?
The short answer is no. Under the 1987 Philippine Constitution, only Filipino citizens and corporations at least 60% Filipino-owned are allowed to own land in the Philippines.
You can read this rule in Article XII, Section 7 of the Philippine Constitution.
However, this doesn’t mean foreigners are completely barred from property ownership in the country. There are legal and practical workarounds that still allow foreigners to invest in Philippine real estate — just not land itself.
What Can Foreigners Own?
While land ownership is restricted, foreigners can own buildings and condominium units, provided certain conditions are met:
1. Condominiums
Foreigners are allowed to own condominium units as long as the foreign ownership in the entire condominium project does not exceed 40%. This is allowed under the Republic Act No. 4726, or the Condominium Act.
Full text here: RA 4726 – The Condominium Act
Most developers in the Philippines manage this cap by selling a portion of the units to foreign buyers and reserving the rest for Filipinos to maintain the ownership ratio.
2. Buildings and Structures
Foreigners may legally own houses or buildings — but not the land on which they stand. One common setup is leasing a parcel of land from a Filipino citizen or corporation, then building a structure on it.
Long-Term Land Leases
Although they cannot own land outright, foreigners may lease land on a long-term basis. According to the Investor’s Lease Act (RA 7652), a foreign individual or corporation can lease private land for up to 50 years, renewable once for 25 more years.
Link to the law: RA 7652 – Investor’s Lease Act
This setup is often used for vacation homes, commercial developments, or long-term residential use.
Marrying a Filipino Citizen
Some foreigners opt to marry a Filipino citizen to indirectly gain control over property. However, the title of the land must be in the Filipino spouse’s name, and any attempt to use marriage as a front for land ownership could be considered illegal.
Setting Up a Corporation
Another route is forming a corporation that is at least 60% Filipino-owned. The corporation can then legally acquire land. However, this requires substantial capital and strict compliance with corporate and SEC regulations.
Agricultural and Forest Land
Foreigners cannot own or lease land classified as agricultural, forest, or mineral land. These types of properties are restricted to Filipino citizens and may only be used under special arrangements, such as joint ventures or service contracts with the government.
Conclusion
If you’re a foreigner looking to invest in real estate in the Philippines, there are still options available even though land ownership is restricted. You can purchase a condominium unit, lease land for long-term use, or invest through a Filipino-owned corporation. The key is knowing the law and following it.
The restrictions may seem tough, but there are legal ways to make it work. So if you’re planning to buy or invest, it’s best to consult a real estate lawyer or a licensed broker to ensure your transaction is secure.
Are you planning to live in the Philippines long-term, or are you mainly after an investment? Either way, with the right approach, you’ll find a way that fits your goals.
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