In eight years of dealing with questions about moving to the Philippines I think there is a no-contest winner for the number-one most frequent question asked … Can I own my own home.  Unfortunately this is also a question which raises many people’s ire … because the Philippine laws on land ownership are … to put it mildly … different to what many foreigners are used to.  Here’s one of the better capsule descriptions I have seen … courtesy of:

Foreigners Owning Philippine Land

• Only Filipino citizens and corporations and associations at least 60% of whose capital is owned by Filipinos may acquire private lands.
• Foreigners are allowed to purchase a condominium unit, provided that total foreign ownership of the condominium corporation does not exceed 40 %. They may also inherit real property from their deceased Filipino spouses or parents.
• Children born to a Filipino parent, whether legitimate or illegitimate, may inherit the property of the Filipino parent, even if the child is not a Filipino citizen

And that is about the sum total of the legal methods.

photo credit: etohaholic

Some commonly mentioned ownership workarounds:

==>> Form a corporation where you put up the money and you pay some Filipino partners to hold shares of stock.  This is a very common thing I have seen foreigners falling for.  It is also one of the most common causes of foreigners being prosecuted under the “Dummy Corporation” laws … and deported … with no compensations for the property they tried to buy.  Philippine property law is rigid.  Philippine corporate laws is downright draconian.  Don’t mess with it.  The Filipino partners must actually control the corporation … in which case my thought is I’d rather just trust my wife … or, if the foreign owner somehow retains control through some legal stratagem … the corporation is not legal with respect to land ownership.

==>> Lease land for 25 to 50 years.  Poor choice in that the improvements (house) become the property of the land owner.  Good choice in that many of us don’t care what happens 50 years from now, and you can often lease land cheap.

==>> Buy the land in your wife’s name and trust in your marriage vows.  That’s my own personal plan.  If you die before her, she inherits, if she dies before you, you can inherit even if not a Philippine citizen.  For those who worry about losing “their” house in a divorce?  Relax … you’ll lose the house anyway, no matter who thinks they own it … been there, done that, got the t-shirt, don’t got the house (and I had a good lawyer).  Just relax and be of good cheer.  Even better, see the first sentence.  Don’t get divorced.  Simple.  Not sure?  Then why on earth are you married?

==>> Buy the property in the name of a your Filipino-citizen minor child.  I don’t know how many times I have heard this canard.  I don’t have enough space to list all the reasons against this.  First of all, it’s not legal … although I have seen real estate agents signing foreigners up to this.  A minor child can not own property … it would become his/her mother’s under law anyway, so who needs all the legal expense?

==>> Give your wife money to buy the property and lease it from her.  Again, simply a way to generate money from unscrupulous lawyers.  Under the Philippine Family Code a husband can not contract with his wife.

Wish I had a lot more “legal” techniques to throw into the mix, but currently that is the way things stand.  Questions, comments, corrections are always welcome.  In the comments box or: davestarr(at)gmail(dot)com

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