The dream of owning a piece of tropical paradise brings many expats to consider buying property in the Philippines. But navigating the legal, cultural, and financial landscape of real estate here can be tricky for foreigners. This detailed guide breaks down everything you need to know—from what you can legally own to the smartest ways to invest.
⚖️ Can Foreigners Own Property in the Philippines?
Short Answer: No, but there are exceptions.
Under Philippine law:
- Foreigners cannot own land
- Foreigners can own buildings and condos, under specific conditions
Legal Exceptions:
- Condominiums – Foreigners can own up to 40% of the units in a condo project
- Married to a Filipino – The Filipino spouse can own the land, but you cannot legally claim it
- Through a Corporation – Foreigners can own up to 40% of a Filipino corporation that owns land
“It’s not impossible, but it’s not simple. Understanding the rules is key to avoiding legal issues.” — Maria Ramos, real estate lawyer
🏢 Buying a Condominium
The most common way for expats to legally own property in the Philippines is by purchasing a condo.
Requirements:
- Valid passport
- Proof of funds or bank statements
- TIN (Tax Identification Number)
Pros:
- Legal, safe ownership
- Modern amenities (pools, gyms, security)
- Central locations in cities
Cons:
- Association dues (₱1,500–₱4,000/month)
- Limited control over building policies
Average Price Range:
| Location | 1BR Condo (Price) |
|---|---|
| BGC, Manila | ₱7M–₱15M |
| Cebu IT Park | ₱4M–₱8M |
| Davao City | ₱2.5M–₱5M |
| Dumaguete | ₱2M–₱4M |
🏘️ Buying Land Through a Spouse
If married to a Filipino citizen, you can:
- Buy land in your spouse’s name
- Legally own the structure (e.g., house) on it
⚠️ Important: In case of separation or death, the land stays in the Filipino spouse’s name or heirs.
Tip: Some couples sign a waiver of rights or include provisions in their will for protection.
🏢 Using a Corporation to Buy Land
You can form a corporation with at least 60% Filipino ownership. The corporation can legally own land.
Key Points:
- Minimum of 5 incorporators
- Must be SEC registered
- Annual compliance and auditing required
Example:
A foreigner sets up “ABC Corp” with 3 Filipino partners (60% shares) and 2 foreign partners (40%). The corporation owns land, and the foreigner holds partial control.
Warning: Setting up shell corporations just to own land can be challenged by the government.
📝 The Buying Process: Step-by-Step
1. Find a Property
- Use sites like Lamudi, DotProperty, Facebook Marketplace
- Work with licensed brokers only (check PRC ID)
2. Due Diligence
- Verify title status (no liens, encumbrances)
- Check zoning laws and right of way access
- Ask for a certified true copy from the Registry of Deeds
3. Make an Offer and Sign a Contract to Sell
- This outlines price, terms, and timeline
- Negotiate inclusions (furniture, taxes, repairs)
4. Pay Taxes and Transfer Fees
- Capital Gains Tax – 6% (seller pays, but often negotiated)
- Documentary Stamp Tax – 1.5%
- Transfer Tax – 0.5–0.75% (varies by city)
- Notarial Fees – ₱2,000–₱10,000
5. Title Transfer
- Prepare Deed of Absolute Sale
- Submit documents to the Bureau of Internal Revenue (BIR)
- Pay taxes and transfer title at Registry of Deeds
🏦 Financing Options
Most expats pay in cash, but local financing options exist:
- Pag-IBIG Fund – For those with resident status or dual citizenship
- Local Banks – BDO, BPI, Metrobank may finance up to 70% of condo value for resident expats
- Developer Financing – 2–5 year in-house payment plans, no bank needed
Down payment usually 20–30%. Interest rates range from 6%–10% per annum.
📋 Tips for a Smooth Transaction
- Always insist on a clean title
- Hire a local real estate attorney
- Document all payments with receipts
- Get everything notarized
- Check for hidden fees (maintenance, parking)
Useful Tagalog Phrases:
- “Magkano po ang kabuuang presyo?” = What is the total price?
- “May titulo po ba ito?” = Does this have a title?
- “Gusto ko pong ipa-verify sa Registry of Deeds.” = I want to verify this at the Registry of Deeds.
🌴 Buying in the Province vs. the City
| Factor | Urban Area (e.g., Manila, Cebu) | Rural/Provincial (e.g., Bohol, Iloilo) |
|---|---|---|
| Cost per m² | High (₱100,000+) | Low (₱3,000–₱20,000) |
| Availability | Condos, townhouses | Land, houses, beachfront lots |
| Legal Risk | Lower | Higher (disputes, unclear ownership) |
| Infrastructure | Excellent | Varies, often basic |
🙋 FAQs: Real Estate for Expats
Can I leave the property to my children?
Yes, but if you’re not a citizen, land can’t be inherited unless your children are Filipino citizens.
Are condos safe investments?
Yes, if you buy in a good location and with a reputable developer (Ayala, SMDC, Megaworld).
How do I check if the title is clean?
Request a Certified True Copy from the Registry of Deeds and check for annotations or encumbrances.
What’s a good first purchase?
A small condo in a city with strong rental demand—like BGC, Makati, or Cebu IT Park.
🧠 Final Thoughts
Buying property in the Philippines as a foreigner requires careful planning, legal guidance, and the right mindset. While direct land ownership is limited, there are still many secure and smart ways to invest—especially through condos and long-term partnerships.
Do your homework, work with trustworthy professionals, and always put everything in writing. With the right approach, your tropical property dream can become a legal and lasting reality.
