FAQ

A foreigner can own land in the Philippines if…

• He acquired the property before the 1935 Philippine Constitution.
• He acquired the property through hereditary succession, in which they were the direct heir or successor of the decedent. 
• He acquired the property through a domestic corporation, wherein at least 60% of the stockholders are Filipinos and the majority of the governing body are Filipino citizens.
• The property is a condominium unit, subject to a 40% foreign ownership limit.
• He is a former natural-born Filipino, subject to limitations prescribed by Philippine law.
• He acquired the property through a Filipino spouse. The property, however, would be registered under their spouse’s name.

Foreigners may own residential houses and/or buildings in the Philippines, however, they cannot own the underlying land on which these structures stand.

In addition to acquiring properties by meeting the foreign ownership restrictions described above, foreign individuals and corporations may also enter into a lease agreement with landowners. 

A foreigner can lease land for up to 50 years. The initial lease contract shall be for 25 years and renewable for another 25 years.

Despite these limitations on foreign land ownership in the Philippines, the Philippines remains an attractive destination for foreign investment due to its large and growing consumer market, skilled English-speaking workforce, and strategic location as a gateway to Southeast Asia.

Many foreigners like retiring in the Philippines because of its affordable cost of living, tropical climate, friendly locals, and strong expatriate communities. The country offers a range of affordable and comfortable housing options, as well as access to necessities such as healthcare, food, and transportation. The Philippines is known for its diverse and scenic natural beauty, as well as its rich cultural heritage, which adds to its appeal as a retirement destination. These factors, combined with its visa policies, which allow foreigners to stay in the country for an extended period, make the Philippines an attractive option for those looking to retire or work abroad.

Beach destinations in the Philippines have long been gaining popularity across many nations around the world. The tourism market is continuously growing, more investments are being made, and businesses are expanding.

Aside from the friendly locals, who can converse in English fluently, the low cost of living and ease of putting up a business are compelling factors to consider. Moreover, continuous improvements in national and local infrastructure have made various destinations more accessible. 

We directly manage all the properties we offer. As such, we can direct you to the property that best suits your needs, and in certain cases, tailor an offer to your liking (particularly for commercial properties).

This is a typical breakdown of how transactions costs are distributed between sellers and buyers of real estate in the Philippines: 

Seller:

• Capital Gains Tax
• Commission of the Agent and/or Broker and the withholding tax applicable for the commission
• Outstanding real estate taxes that are due

Buyer:

• Transfer Taxes
• Registration Fees
• Documentary Stamps
• Incidentals and additional expenses during the registration process

Note that practices will vary and that this is ultimately determined by agreement between the parties. As such, be sure to clarify this distribution in writing to avoid confusion.

• Capital Gains Tax - 6% of the selling price specified in the zonal value or the Deed of Sale, whichever is higher
• Documentary Stamp Tax - 1.5% of the seller’s price, or its fair market or zonal values, whichever is higher
• Transfer Tax (Local Treasurer’s Office) – the maximum rate of 0.50% or 0.75% in cities and municipalities within Metro Manila, of the property value
• Registration Fee: 0.25% of the selling price, or zonal value or fair market value, whichever higher
• Notary Fees and other incidentals: 1-2% of the property value.
  
  

Note that the tax rates vary depending on the location of the property.