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 Acquisition and ownership of land in the Philippines is restricted to Philippine citizens or corporations (at least 60% of equity is owned by Filipinos). To acquire ownership or a land, residential house and lot, or commercial building and lot, foreign investors may have to establish or invest in an existing Philippine corporation but in no case should their equity exceed 40% of the total capital of the corporation. However, a foreign investor may own condominium units or a townhouse (provided that the land on which the property is built is owned by a Filipino or a corporation of which at least 60% of the equity is owned by Filipinos).
See full article from Global Property Guide: Tax on Property Income in Philippines. Nonresident (i.e. whose stay in the country does not exceed 180 days) foreigners are liable to tax on their Philippine-sourced income. Married couples are required to compute their individual income tax liability separately but they must file a joint tax return. Nonresident foreigners are classified depending on business activities and the applicable taxation rules depend on this classification: Nonresident foreigners engaged in trade or business in the Philippines Nonresident foreigners not engaged in trade or business in the country
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Credit to Pinoy Attorney for this article.
If you are planning to sell your real estate property in the Philippines, you need to follow the correct procedures to avoid putting yourself into a nightmarish situation. While it does not take rocket science to sell a property, familiarizing yourself with the procedures is a must as there are some legal documents that you need to secure. 1. Sign A Contract of Agreement The owner or broker will first discuss the terms of the sale, the commission and the fees. It is also necessary to scrutinize the documents to make sure that the land title meets the condition and free from encumbrances, liens and loans. 2. Issue an Authority to Sell The purpose of the agreement or contract is to bind the broker as the agent of the owner providing the essential information and the amount of commission of the property that will be sold. The contract will also indicate if the owner will bestow upon the exclusive rights of the broker or a non-exclusive authorization to sell the property. The broker will secure the necessary documents before selling the property to ensure that there are no problems concerning the property. The broker will also check if the property is free from encumbrances. An encumbrance means that another person has interest in, right to, or legal liability on the property that either deter the process of transferring the title or diminish the value of the property. 3. Assessment of property by the broker The broker will check the property as a way of assessing its current market value. It is important for the property to be appraised to determine its actual price. There are several factors that will be taken into account in determining the asset's value such as the area and location of the property. 4. Broker will offer and sell the property Before a broker can market the property, it is important that the owner agrees on how to market the property. There are also some limitations that should be taken into consideration such as privacy when realising photos or disclosing the location online. Both parties must also decide on how to split the marketing costs such as communication and transportation expenses. Nowadays, the common practice is that the broker shoulders the expenses depend on the amount of the commission. 5. Viewing of the Property Once the buyers get in touch with the broker or owner, they will proceed with viewing the property. The owner needs to make sure that the property is presentable to add value to the property. 6. Write a Letter of Intent or Offer to Buy The buyer will also offer a Letter of Intent to the property owner declaring the intention to purchase. More often than not, the Letter of Intent is given at the first stage in documenting a sale of real property. 7. Acceptance of Owner The owner accepts the Letter of Intent once signed. This indicates acceptance of the terms given by the buyer. Upon acceptance, the seller will be bound to promist not to offer the property to other buyers so long as the buyer does not breach the conditions in the letter. 8. Provide Earnest Money The earnest money is provided as means of holding the property subject to the buyer's due diligence. It can be forfeited when there is default on the buyer's part. The money can also be used as refundable subject to deductions depending on the agreement that both parties made. 9. Preparation of Legal Documents The legal documents must be secured in preparation of the transfer of ownership to the buyer. These documents must be obtained from the Register of Deeds: • Certified True Copy of Transfer Certificate of Title ( Land ) • Certified True Copy of Condominium Certificate of Title ( Unit ) • Certified True Copy of Condominium ( Parking – if applicable ) The owner or broker must procure these documents from the Assessor's Office: • Certified True Copy of Tax Declaration ( Land ) • Certified True Copy of Tax Declaration ( Improvement / Building ) • Certified True Copy of Tax Declaration ( Condominium ) • Certified True Copy of Tax Declaration ( Condominium parking, if applicable ) • Real Estate Tax Clearance for Current Year • Certificate of Non-Improvement if property is bare and without structures such as a house or a building The Property Owner should also secure the following documents • Certificate Authorizing Registration from the Bureau of Internal Revenue (BIR) • Original Real Estate Tax Receipts – Current Year • Lot Plan / Subdivision Plan A Deed of Absolute sale will be prepared and signed. The seller transfers ownerships of the property to the buyer. The Deed of Absolute Sale should be signed by both parties so it will be considered to be the absolute owner of the property. After which, both parties will proceed with the payment of expenses such as capital gains tax, documentary stamps tax, registration fees and transfer tax. Upon full payment of the purchase price and other expenses, the contact will be signed and ownership will be legally transferred to the buyer. It is important to notarize Deed of Absolute Sale so it will become a public document. The seller will turn over the original copies of Transfer of Certificate, Condominium Certificate of Title, Tax Declaration, Tax Clearance for both land and improvement, Tax Clearance for condominium unit and parking. The buyer must also obtain a new tax declaration and when the new tax declaration has been released, the former owner's full obligation will be terminated. After eight years of uninterrupted house price rises, report says Demand expected to remain stable even with a noticeable decline on a certain first y-o-y decline since 2010 for a 3 bedroom Makati CBD stats. Though quarter-on-quarter, house prices rose strongly by 8.27% in Q4 2019.
Read full report, The end of the Philippines’ great house price boom? Take-up is expected to remain stable in Rockwell Centre, Makati CBD, Bay Area and Fort Bonifacio, mainly driven by demand from the offshore gaming and outsourcing segments, according to Colliers International. Makati CBD property prices have risen by almost 132% from 2010 to 2018, amidst strong demand and rapid economic growth.  Bank Financing is a main financing option to owning a property other than in-house or CASH payments. It will be a long-term commitment as most terms are from 5-15 years at least in the Philippines. There are also a standard bank requirements for borrowers to comply with to commence application and get into an approval. What is a Housing Loan? In layman’s term, a home loan is simply borrowing money with interest for a specific period of time to purchase or to renovate a house. In case of non-payment or default, the bank can liquidate the property and get back its used loan amount. It is also defined as a debt you incur when you want to acquire house thru bank financing. You have to pay the amount borrowed with a definite amount regularly for a definite period of time, in addition the bank charge you with interest which also varies in respect to the time you want to pay back the lender. In the Philippines, home loan is available thru list of banks, developers, Pag-IBIG Fund. Interest rates varies from these lenders, we’ll cover it later in this post. Personal Financial Assessment. The first thing you need to addressed as a home buyer is your capability to pay back the loan you are planning to ask with the lender. As banks today has a lot of eligibility requirement for borrowers. As sure as it is, what these lenders’ number one question to you is how much is your gross family income. The minimum gross family income requirement differs from one bank to another. Below is the chart of minimum requirement for major banking institution in the Philippines. You also have to consider how much will be left in your pocket once the bank get it’s required monthly amortization. Minimum Gross Family Income MetroBank & PNB 30,000.00 BPI 40,000.00 BDO, Security Bank, Chinabank 50,000.00 RCBC, Unionbank Depends on the amount of loan The application and approval process. Banks differ in processing loans, however it all boils down to these 4 steps. Application. This is the stage where all the needed documents are submitted. You also need to fill up the bank’s application form where the terms and conditions of the loan are stated. Processing or Pre-qualification. When you have submitted all the required documents which includes all bank application form, employment information, latest Income Tax Return (ITR), bank statements, bank will start to check if you are qualified to avail the loan. Expect a call from the bank representative checking your financial capacity, they will ask questions about your assets, current monthly dues or liabilities and of course your monthly income and its source. The bank will also check the capacity to pay of your co-maker, so make sure to have a co-maker who will be able to pass the banks approval process. The approval process will conclude if you’ll be able to pay the monthly amortization of the housing loan. Annotation. If the loan is approved, the bank again will call to inform that your loan application is accepted. Also, bank will usually ask you to sign the Bank Loan Covenant which simply states them as the lender and you as the borrower to fully pay back the loan amount in time. Releasing. Congratulations, the bank will release the loan you have applied. List of Requirements for Bank Housing Loan. When you already assessed that you are financially capable of applying for a home loan, the next to prepare are the documents needed for application. You need to provide everything the bank requires you to submit, the loan account officer will use all the documents to prove you’re eligible to the loan you’re applying to. If the requirements are met, you will be contacted immediately for further instructions and loans can be approved in as fast as 5 bank working days. Here is a list of major bank housing loan requirements: Metrobank Identification Locally Employed/OFW/in Business – Government issued ID, Passport, ACR if Foreigner Corporation/Partnership – SEC Registration, General Information Sheet Source of Repayment Locally Employed – Income Tax Return, Certificate of Employment, 3 months payslips OFW – Land-based:COE with email of employer, Sea-based: Latest POEA contract in Business – 6 months bank statement with BOO, Certification of No Overdraft Charges Corporation/Partnership – 2 years AFS & ITR, 6 months bank statement with BOO, Certification of No Overdraft Charges Collateral Requirement – Transfer Certificate of Title / Condominium Certificate of Title, Tax Declaration, Contract to Sell or Reservation Agreement (if under developer tie-up only), House Plans / Bill of Materials / Specifications (for house construction only. PNB REQUIRED AT ALL TIMES HOUSING LOAN APPLICATION FORM (duly accomplished) Photocopy of 2 valid government issued ID’s Appraisal Fee of P3,500 – non-refundable If with co-maker/co-borrower/attorney-in-fact, separate application form is needed IF EMPLOYED: Income Documents Photocopy of the latest Income Tax Return (ITR) Certificate of Employment and Compensation Alien Certificate of Registration (ACR) and Official Receipt (if resident alien) Overseas Filipino Worker Photocopy of Passport Contract / Certificate of Employment (COE) approved by the POEA, if applicable, authenticated by the Philippine Consulate (if direct hired) Proof of inward remittance thru PNB or other banks Crew Contract and Exit Pass from POEA (for seafarers only) PNB-prescribed Special Power of Attorney (SPA), if applicable If SPA was executed and notarized abroad, such has to be authenticated by the Philippine Consulate USA & US TERRITORY: The certificate of employment & salary should be authenticated by the Phil. Consulate Loan applicant to fill-out the Bank’s Credit Information Authority and pay $50.00 for the Experian Report in PNB-Los Angeles Desk Office located at #3345 Wilshire Boulevard, Suite 200, Los Angeles, California 90010, USA Contact Nos.: 323-802-8001 Telex No.: 6502253656 Fax No.: 213-401-1803 Contact Person: Rowena Tabuzo BPI Housing Loan Application Form Duly accomplished Application Form 2 valid Identification Cards If married, both spouses to sign on the application form If with co-borrower or co-mortgagor, separate application form is needed Income Documents If Expat Pinoy (Overseas Filipino Worker) Contract / Certificate of Employment (COE) authenticated by Philippine Consulate Crew Contract and Exit Pass validated by POEA (seaman) Proof of monthly remittances Notarized or authenticated Special Power of Attorney (BPI FSB Format) Collateral Documents Clear copy of Owner’s Duplicate Copy of TCT/CCT Lot Plan with Location/Vicinity Map certified by licensed Geodetic Engineer Photocopy of Tax declaration / Tax receipts / Tax clearance Endorsement Letter / computation sheet / Contract to Sell from developer stating the contract price (for accredited developer/project) BDO Eligibility Requirements Filipino citizen or foreigner (see Visa requirements) At least 21 years old but not exceeding 65 years old upon loan maturity Minimum gross family income of P50,000.00/month. Stable source of income from employment or business If employed, at least 2 years with current company If self-employed, at least 2 consecutive successful and profitable years of operation. Document Requirements Basic Documents Signed BDO application form Clear copy of 1 valid ID matching application details Marriage Contract, if applicable For foreigners, photocopy of Alien Certificate of Registration (ACR) showing Visa status as permanent immigrant or Alient Employment Permit (AEP) or Visa ID Income Documents If employed abroad (or Asenso Kabayan borrowers) Latest 3 months proof of remittance, or Latest 3 months payslip, or Certificate of Employment or Employment Contract duly autheticated by Philippine Consulate Office, or For seamen, latest Crew Contract and employment history or Crew Contract and Exit Pass from POEA Types of Acceptable Visa for Foreigners Quota or Non-Quota Immigrant Visa: Alien spouse of a Filipino citizen (Sec 13A Visa) – Natural-born Filipinos married to an Alien (Sec 13D Visa) – Returning Resident (Section 13E Visa) – Natural-born Filipinos naturalized in foreign country (Sec 13G Visa) Photocopy of Special Retiree’s Resident Visa (SRRV) or Quota/Preference Immigrant Visa Permanent Resident Status and working Visa granted by Subic Bay Metropolitan Authority (SBMA) Working Visa issued to Embassy Officials Collateral Documents Photocopy of TCT / CCT Lot Plan with Vicinity Map certified by a Geodetic Engineer Master Deed of Declaration of Restrictions (for condominiums) SECURITY BANK Required Documents: Home Loan Online Application Form List of Required Documents Special Power of Attorney (SPA) For OFW Borrowers: Completely filled out and signed application form Clear copy of one valid ID (photo-bearing government issued) of borrower/spouse/co-borrower/ signatories of the loan Any ONE of the following income documents: Certificate of Employment with compensation (issued within the last 6 months) Latest Crew Contract (for seafarer/seaman) Latest Employment Contract (for land-based OFWs) Allotment Slip Latest 3 months payslip; OR bank statement for past 3 months Note: For OFWs hired directly abroad, any TWO income documents are required Consularized Special Power of Attorney is needed if with attorney in fact Mortgage Redemption Insurance (MRI) Application Form Relevant collateral documents (Section E) Collateral Document Requirements Copy of collateral title (TCT/CTC) Copy of Tax Declaration on land and/or improvement Signed Authority to Inspect and Verify (bank form) Appraisal Fee paid to SBC: OR Number ______________________________ Acquisition from Accredited Developer Contract to Sell; or Reservation Agreement UNION BANK BORROWER ELIGIBILITY Filipino, of legal age but not more than 65 years old upon loan maturity With steady, dependable & verifiable source of income Employed for at least 3 years in a supervisory/managerial position with a reputable company (for employed individuals) Minimum Gross Monthly Income (GMI): P50,000/mo. for Metro Manila / Metro Cebu P35,000/mo. for other provincial areas Able to pay an Equal Monthly Amortization which is: < 35% of GMI < 75% of Net Disposable Income (NDI) No adverse credit findings like court cases, bouncing checks, unpaid loans, cancelled credit cards, etc. REQUIREMENTS FOR LOAN APPROVAL PROCESSING Identification Papers (TIN, Community Tax Certificate, Passport, Company ID, Driver’s License) Marriage Contract (if married) Bio-data/Resume Deposit Statements of Accounts (last 6 months) EMPLOYED INDIVIDUALS Latest Income Tax Return (ITR)/W-2 Form Certificate of Employment stating length of service and monthly compensation package SELF-EMPLOYED INDIVIDUALS Audited Financial Statements and ITR for the last 3 years (BIR stamped) Certificate of Registration of Business Name Business Profile Complete list of suppliers and clients COLLATERAL REQUIREMENTS Transfer Certificate of Title Current Tax Declaration Current Tax Receipts Current Tax Clearance Location Plan BANK FORM Loan Application Mortgage Redemption Insurance (MRI) Application FOR OFWs* Certificate of Employment stating length of service and monthly compensation package POEA Contract ITR (if any) Payslips (last 6 months) Special Power of Attorney (Bank Form) * All documents have to be authenticated by the Philippine Embassy/Consul if issued abroad INSURANCES AND FEES REQUIRED P3,500 Filing Fee (non-refundable) Processing Fee Mortgage Registration Expenses Documentary Stamp Tax Mortgage Redemption Insurance (MRI) Premium Fire/Earthquake Insurance Premium RCBC Accomplished RCBC Home Loan Application Form Copy of TCT and Tax Declaration (Land & Improvement) Bill of Materials (Construction) For Employed applicants: Certificate of Employment (COE) or latest ITR, 2 valid government-issued IDs, TIN, Utility bill For Self-employed applicants: Business Registration with DTI, Audited Financial Statements, ITR or bank statements People proceed with great care and caution when investing in property. During a worldwide health crisis, such as the novel coronavirus outbreak, people explore alternative ways to invest and take additional steps to ensure the security of their investment. For those who are new to using online tools to invest, the process may feel long and laborious. For those who are ready to see this as an opportunity to invest, you may be seeing deals that may never come again.
In an original article first published in lamudi.com.ph, industry experts advise on pursuing real estate investments in the time of COVID-10. Here are some of the good things you can experience when you do invest in real estate, despite the COVID-19 threat: You Have Plenty of Options Lamudi saw an increase in the number of new listings recently. This could be due to the fact that brokers are maximizing online platforms to make their products visible even while on lockdown. Ultimately, this means you have a lot of choices that can match your needs and wants, depending on your reason for the purchase. For future homeowners, you can find more houses and lots in your budget range. For investors, you may stumble upon a good property located in an in-demand central business district. Take advantage of online real estate marketplaces to explore the abundant property market. Use the filter options to narrow down your search. Bookmark those that you deemed worth investing in. You Can Negotiate Better Prices People need to reallocate their finances during a crisis, let alone a pandemic. The money they have is allocated for the worst-case scenario, so to speak: grocery goods to prepare for total lockdowns, payment for utility bills, and medical care in the event that they get sick. This also means one thing: money usually spent on fun and expensive nights out with friends are free, and with this added to your savings, you can explore more real estate options. Talk to a broker about a property you’re interested in now, so you can start negotiating a better position in terms of pricing before someone else takes the property you want. This is true especially for pre-selling and secondary projects, as mentioned by Colliers Philippines in this report. Sellers will be more likely to be flexible in terms of pricing and/or payment terms for these kinds of property during this time. You Can Diversify Your Portfolio With plenty of options in the market and better pricing at your side, you can very well flex diversification. Remember, you don’t want to put all your eggs in one basket. You need to minimize investment risks. Include different types of real estate products in your portfolio. Explore commercial or industrial properties, for instance. The former has performed well in the last years as the business process outsourcing industry needed more office spaces. The latter likewise experienced strong demand because of the rise of e-commerce, which entailed occupying more warehouses. Aside from asset class, you can diversify based on location. The southern provinces at the tip of Metro Manila can be a viable option, as infrastructure developments there can boost economic growth. Take a look at the property market performance of other cities in key regions, too, to find more opportunities. You Can Maximize Your Agent’s Expertise Fear stems from the uncertainty brought on by a crisis. But you’re not totally in the dark during this time. Brokers are there to help you along, which not only means giving you the best deals in the market, but also offering you all the advice you need in navigating this ‘tricky’ investment. You may even stumble upon a broker who had a direct, first-hand experience of catering to investors buying during times of crisis. Many real estate professionals can help you be prudent and confident in your investment. The novel coronavirus continues to rage on. Smart investors, who understand the risks and rewards, look at their options with care and caution. In a time like this, be wise in how you tackle your investments. COVID-19 Response: PH BANKS Offering Payment Extensions on Home Loans and Other Loan Products3/27/2020 To extend assistance to the public in light of the Covid-19 pandemic, banks offer a grace period for payments on different loan products, including home loans and credit card loans, while also waiving transaction fees. The move especially considers the economic losses from work suspension or unemployment brought about by the outbreak.
Great article! Banks Offering Payment Extensions on Home Loans and Other Loan Products | Read more at Philippine Real Estate News. This article was first published at Lamudi.com.ph In Summary: BDO: 60-day extension This applies to credit card, auto, home, SME and personal loans with due dates up to April 15. If you avail of the extension, you won’t be charged any penalty. But if you want to pay earlier, the bank can still accommodate it. Despite the enhanced community quarantine, several branches in Luzon are still operational. As of March 20, a total of 128 branches are servicing clients. Check their social media account to know which ones near you are open. If you choose to go electronic on your payments, you won’t be charged for transaction fees. However, beware of emails asking for your account details and one-time password (OTP) to secure the 60-day grace period. According to BDO, no authorized representatives will ask for this information. BPI: 30-day extension BPI’s credit card and personal loan payments have a grace period stretching from March 16 to April 15. This is especially applicable to self-employed individuals whose income source was severely affected, and those who were laid off due to retrenchment. Meanwhile, the grace period for the auto and housing loans will cover payment due dates from March 14 to April 13. Those qualified are people under the enhanced community quarantine, whose loan accounts are in good credit standing as of March 13. Banko NegosyoKo’s covered period, on the other hand, is from March 16 to April 15. Metrobank: 30-day extension If you have a payment due date on your home loan or car loan falling from March 16 to April 15, you’re qualified for Metrobank’s grace period. The auto-debit arrangement will not run, effective last March 20. The bank will only collect the payment on the next due date, along with the regular amortization. If you would want to settle your account nonetheless, refer to this list for their open branches. For other transactions, it’s best to use your mobile app to avoid going outdoors and interacting with people. RCBC: 30-day extension RCBC’s offering covers auto, home, personal, and salary loan payments. If your due date falls from March 15 to April 15, you can delay settling your account. But if you do wish to pay them still, you can visit select branches around the metro. Do note that they operate within shortened hours given the lockdown protocols. Still, if you can keep your transactions online, better. The bank has an app you can use to pay bills and even transfer funds. UnionBank: 30-day extension This applies to mortgage and credit card payments. In the former, it covers accounts whose deadlines fall on March 17 to April 15. You’re eligible for the grace period if the payments are not past due. If you’re in an auto-debit arrangement, Unionbank assured that they won’t run the system in the said period. No, you won’t be charged two months’ worth of payment for the next billing if you follow the grace period. Your loan term will just be extended to another month. As for the credit cards, the grace period runs from March 16 to April 15. If you’re in an auto-debit set-up though, that will still run as scheduled. Security Bank: 30-day extension If you have no past-due balance as of March 16, you can qualify for the payment extension for due dates falling on March 16 to April 14. This covers credit card, home, personal, auto, business mortgage, and business express loans. The offering covers all Security Bank clients nationwide. Don’t worry, your next billing won’t double if you delay payment during the said period. It will only extend the maturity of the loan. Likewise, late fees won’t reflect on your account. If there are any, the bank will waive it. With payment extensions on loans, focus on what really matters now: your health and well-being. Practice good hygiene, stock up on nutritious food items, and boost your immune system. More importantly, stay indoors. Use the available resources at your fingertips to avoid leaving your home. As our health workers’ appeal goes, let’s flatten the curve. Posted by: Nimrod Flores in Real Estate Laws On: January 5, 2016 Last updated: March 20, 2016
When foreigners come across a good property for sale in Philippines, a few questions come to mind quickly. One of the very first of these questions is also the most important. Can foreigners own real estate in the country? The short and quick answer is yes. However, there are some qualifications that have to be considered. That’s what we are going to discuss in this post. Am I considered a foreigner? Before we start qualifying, let’s first understand the legal meaning of the word “foreigner”. This is important because this is the basis of everything on this topic. A foreigner, or a foreign national is someone who is not a Filipino citizen. A foreigner may be a natural person, a human being. It can also be a partnership, corporation or any legal entity or organization that is not formed under Philippine law. The 2 kinds of “foreigners” For natural persons, there are these 2 kinds of foreigners: A citizen of another country since birth A natural-born citizen of the Philippines who has lost his Philippine citizenship The first kind are those people who were born in another country and have always been a non-Filipino citizen. For purposes of this discussion, let’s refer to them as real foreigners. While the second one are those who were born Filipinos but by some legal process, acquired citizenship in another country. An example is a Filipino who became a naturalized US citizen after being in that country for some time. In this post, let’s call them former Filipinos. Can real foreigners buy a property for sale in the Philippines? This depends on the type of property we are talking about. If we are talking about land or other stand-alone piece of real estate, then the answer is no. No less than the Philippine Constitution prohibits this in order to preserve national patrimony. But if we are talking about properties under a condominium corporation, then the answer is yes. This goes not only to natural persons but to legal entities as well, such as corporations. And when we say “condominium corporation”, it means a corporation specially created to own a condominium community. This corporation is composed of the people who own a unit within that condominium community. Also, contrary to what most people think, a condominium means not only those tall buildings with residential units in them. Those are what we call “vertical communities” in the industry jargon. But a condominium can also be a “horizontal” one. I’m talking about townhouse communities and subdivisions. A condominium corporation, being a corporation, also has the fundamental characteristics of any other corporation. This includes the allowance of up to 40% share of interest to be owned by foreigners. It is through this operation of law that foreigners are allowed to own properties in the Philippines. When a foreigner buys a property in a condominium community, this law operates in the background, making his purchase legal. The process of buying the property is just the same with the usual real estate sale. There is nothing complicated that needs to be done by the foreigner. How about former Filipinos? For former Filipinos, the Constitution provides them with more privileges in owning real estate in the country. Article XII therein, Section 8 to be exact, provides that: x x x x x 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. SECTION 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law. x x x x x Former Filipinos can still buy real estate in the country as if they were still Filipino citizens. This means they can buy land, houses (even those not under a condominium corporation), and of course, condominium units. But they are now subject to the limitations of other existing laws. These laws that impose those limitations are (1) Batas Pambansa Blg. 185 and (2) Foreign Investment Act of 1991 as amended by RA No. 8179. BP 185 prescribes the guidelines on land ownership by former Filipinos for purposes of establishing residence. Section 10 of RA 8179 stipulates entitlements and conditions for land acquisition for investment purposes. For an easy reference, here are the pertinent provisions of those laws (as consolidated by the LRA): Particulars Provision under BP 185 (for establishing residence) Provisions under RA 7042 as amended by RA 8179 (for investment) Size/Area of Coverage maximum of 1,000 sq. meters for urban land maximum of one (1) hectare for rural land maximum of 5,000 sq. meters for urban land maximum of three (3) hectares for rural land Land Acquisition for Both Spouses either of the spouses may avail of the privilege in case both spouses wish to acquire lands for this purpose, the total area acquired should not exceed the maximum allowed either of the spouses may avail of the privilege in case both spouses wish to acquire lands for this purpose, the total area acquired should not exceed the maximum allowed Additional Land Acquisition In case he/she already owns urban or rural lands for residential purposes, he/she may acquire additional urban or rural lands, which when added to those he/she presently owns shall not exceed the authorized maximum area. In case he/she already owns urban or rural lands for business purposes, he/she may acquire additional urban or rural lands, which when added to those he/she presently owns shall not exceed the authorized maximum area. Limits to Acquisition of Land A person may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines, provided that the total area of these lots do not exceed 1,000 sq. meters for urban land or one (1) hectare for rural land for use as residence. An individual who has already acquired urban land shall be disqualified from acquiring rural land and vice versa. A person may acquire not more than two (2) lots which should be situated in different municipalities or cities anywhere in the Philippines, provided that the total area of these lots do not exceed 5,000 sq. meters for urban land or three (3) hectares for rural land for business purposes. Under Section 4 of Rule XII of the Implementing Rules and Regulations of RA 7042 as amended by RA 8179, a transferee who has already acquired urban land shall be disqualified from acquiring rural land and vice versa. However, if the transferee has disposed of his/her urban land, he/she may still acquire rural land and vice versa, provided that this will be used for business. A transferee of residential land acquired under Batas Pambansa Blg. 185 may still avail of the privilege granted under this law. Use of Land The acquired land should not be used for any purpose other than for residence. Section 5 of Rule XII specifically states that “the land should be primarily, directly, and actually used in the performance or conduct of the owner’s business or commercial activities in the broad areas of agriculture, industry and services including the lease of land, but excluding the buying and selling thereof”. Special Requirements In addition to the requirements provided for in other laws for the registration of titles to lands, the transferee should submit to the Register of Deeds of the province or city where the property is located a sworn statement stating the following: date and place of birth names and addresses of his/her parents, spouse, and children, if any area, location, and mode of acquisition of landholdings in the Philippines, if any his/her intention to reside permanently in the Philippines date he/she lost his/her Philippine citizenship and the country of which he/she is presently a citizen In addition to the usual registration requirements pertinent to the conveyance of real estate, the transfer contemplated shall not be recorded unless the transferee submits to the Registry of Deeds of the province or city where the land is situated, the following: certification of business registration issued by the Bureau of Trade Regulation and Consumer Protection of the DTI sworn statement stating information required under Batas Pambansa 185 certification from assessor of municipality or province where the property is situated that the subject land for transfer is an urban or rural area if an agricultural land is acquired, a certification from the Department of Agrarian Reform that the land is a retained area of the transferor and an affidavit of the transferee attesting that his/her total landholding inclusive of the land to be acquired does not exceed the 5-hectare limit provided under R.A. 6657, is required Violations and Penalties Violations through: misrepresentation in the sworn statement acquisition of land through fraudulent means failure to reside permanently in the land acquired within two (2) years from its acquisition, except when such failure is caused by force majeure shall be penalized by the following: liability to prosecution under the applicable provisions of the Revised Penal Code and subject to deportation in appropriate cases forfeiture of such lands and their improvements to the National Government through escheat proceedings by the representative of the Solicitor General permanent disqualification from availment of the privilege under this Act Key Takeaway In a nutshell, foreigners are allowed to own real estate properties in the Philippines. For real foreigners, the property just has to be under a condominium corporation. The easiest way is to buy a property for sale from developers. Another way, although more complicated, is forming a corporation here and let that corporation own the properties. Either way, the corporation will have to be owned 60% by Filipino citizens. In an article originally published at lamudi.com.ph, Why Real Estate is an Investment for Generations, the article talks highly on the importance and benefits of of owning a property that can be an invaluable asset than can be passed on to generations...For Filipinos abroad, it can be a legacy for the rest of the generations to appreciate.
The article emphasized that "Real estate is a hard asset, one that is tangible and can be used for various purposes. For Filipinos, who value their family more than anything else, sharing the home across three generations is a common occurrence. While it retains its value, your home serves as a shelter for you, your children, your future grandchildren–and beyond. This is in stark contrast with stocks and bonds, which are intangible assets that are easily affected by market changes. Owning property allows you to enjoy the stability of having a home while creating lifetime moments with your family. And one day, you can give them the same stability as a way of supporting them in their future endeavors." |
About this section:This section will provide you updates and news on real estate happenings in the Philippines. Archives
June 2020
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