This was originally published several years ago. I’ve decided to edit it, correct errors and bring it up to date, because I now am a Philippine home owner … something I didn’t think I would ever be when I wrote the original article. Please remember that although I write from experience and personal research I am not a real estate nor a legal professional, so what you read here is personal opinion only. If you need professional assistance, seek it, please.
In eight 10 plus years of dealing with questions about moving to the Philippines I think there is a no-contest winner for the number-one most frequently asked question … Can I own my own home in the Philippines?
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 a capsule description:
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.
Test question. Did you read the phrases in bold above?
If not, please move your eyes back to the first sentence and re-read it. If you don’t read anything else, this will easily serve as all you need to know about Philippine real estate law. Simple, isn’t it?
A reader once commented, seeing me struggling to answer yet another convoluted scheme to get around the law from another reader once said to me … “Why don’t you learn to just tell them NO“?
Perhaps he was right.
- 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.
- Children (legitimate or illegitimate) born to a Filipino parent, 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. Here are some common “work arounds” I hear often about from fellow foreigners. Some are legal, some maybe not. Just presented for your viewing pleasure.
- 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 law is downright draconian. Don’t mess with it.
The Filipino partners must actually control the corporation … in which case my thought is I’d much rather just trust my wife … or, if the foreign owner somehow retains control through some quasi-legal stratagem … the corporation is not legal with respect to land ownership.
- Lease land for 25 to 50 years and build your house on it.
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 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 parents under law anyway, so who needs all the legal expense?
- Give your wife money to buy the property and lease it back from her.
Again, simply a way to generate money from unscrupulous lawyers, in my opinion. Under the Philippine Family Code a husband can not contract with his wife.
Time and time again I get questions, especially from Americans, involving schemes like this. In the US, in most states, a husband and wife can do a lot of things independently. It doesn’t work like that here in the Philippines, so stop scheming and start moving forward honestly, rather than underhandedly.
- Buy the land in your spouse’s name (your name can go on the deed as well) and trust in your marriage vows.
That’s my own personal plan. If you die before her, she inherits your interest. If she dies before you, you can inherit her interest, even if not a Philippine citizen.
For those who worry about losing “their” house in a divorce? Relax … plan to 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?
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 via my spam-free contact form above.
More in this series to follow, tomorrow.