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Foreign Ownership of Land in the Philippines
RESAR on May 21 2009 | Filed under: Real Estate Review
Here are the basic rules covering foreigners who want to own Philippine real estate.
Who are allowed to own (buy and register in their own name) land in the Philippines?
- Natural-born Filipinos (Philippine Constitution of 1987, Section 2, Article XII)
- Corporations which are at least 60% owned by Filipinos. Please take note of The Anti-Dummy law (PD 715), though, when forming corporations.
- Foreigners who acquired property prior to the 1935 Constitution.
- Foreigners who inherit real property from their deceased Filipino spouse or parent. The foreigner has to be a legal heir.
- Former Filipinos who become naturalized citizens of another country, but who retain their Filipino citizenship. Republic Act 9225 (Dual Citizenship Law of 2003)
- Former natural-born Filipinos who become naturalized citizens of another country. Ownership is subject to certain limits covered in Batas Pambansa Bilang 185, which was superseded by Republic Act 7042 as amended by RA 8179 or the Foreign Investment Act of 1991.
Are foreigners (individuals) allowed to own land in the Philippines?
Generally, NO. There are some exceptions, though:
- Foreigners may buy and own a condominium unit, for as long as the total foreign ownership of the condominium corporation does not exceed 40% (See RA 4726 – The Condominium Act)
- Foreigners who acquired Philippine property when they used to be Filipino citizens, will retain ownership of those properties even after they changed their citizenship.
May former Filipinos acquire land in the Philippines?
Yes, subject to certain limits listed in Batas Pambansa Blg. 185 (BP 185), which was enacted in March 1982, and Republic Act 8179 (RA 8179), which amended the Foreign Investment Act of 1991.
- BP 185 – Residential Land
- Urban land – maximum of 1,000 sq meters
- Rural land – maximum of 1 hectare (10,000 sq m)
- Cannot own both urban and rural land. Choose one type only.
- Previous ownership (when still a Filipino citizen) of residential urban or rural land will lower the 1,000 sq meter and 1 hectare limits above.
- Can own a maximum of two (2) lots only.
- Those lots must be in different cities or municipalities in the Philippines.
- A transferee of residential land acquired under Batas Pambansa Blg. 185 may still avail of the privilege granted under RA 7042 as amended by RA 8179.
- RA 8179 – Land for Business/Commercial Use
- Urban land – maximum of 5,000 sq meters
- Rural land – maximum of 3 hectares
- Previous ownership (when still a Filipino citizen) of urban or rural land used for business purposes will lower the 5,000 sq meter and 3 hectare limits above.
- Cannot own both urban and rural land. Choose one type only.
NOTE: But if you dispose of your rural land, you can acquire urban land, and vice-versa, provided the new acquisition will be used for business. - Business use is defined in Section 5 of Rule XII as: “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 or selling thereof.”
- Can own a maximum of two (2) lots only.
- Those lots must be in different cities or municipalities in the Philippines.
References
Land Ownership by Foreigners/Former Filipino Citizens
Information provided by the Embassy of the Philippines in Singapore. Provides additional info on the requirements for land registration or Original Certificate of Title (Judicial Titling), as well as the requirements for Land Transfer or Transfer of Certificate of Title.
Republic Act No. 7042 (As amended by RA 8179)
Foreign Investments Act of 1991: An Act to Promote Foreign Investments, Prescribe the Procedures for Registering Enterprises Doing Business in the Philippines, and for Other Purposes
Download: DTI – EO 286 – Foreign Invest List (PDF)
Former natural-born Filipinos may acquire Philippine property — (Persida Acosta, ManilaTimes.net) Chief Acosta cites provisions of the Philippine Constitution of 1987 governing the acquisition of alienable public lands in the Philippines.
Tips in Buying Land in the Philippines
The info was just posted in an online discussion board, so you will still need to do due diligence. Anyway, the steps outlined apply to acquiring property that is supported only by Tax Declarations and no titles. Good tips for both foreigners and Filipinos.
I just have an issue about the poster’s Item #3: “Take the papers to the nearest CENRO or DENR office and ask for the land classification of the area. Make sure it is classified as A & E land (alienable and disposable).” … because the only lands that are alienable in the Philippines are Government-owned agricultural lands (still have to check this land classification, though).
This is just my humble comment to the Admin Response to CJ (dated June 18, 2010), lest the advice may mislead your readers. Section 22 of Commonwealth Act 141 must be read in relation with Article 12, Section 3 of the 1987 Constitution, viz:
“Private corporations or associations may not hold such lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead or grant.”
From the foregoing, it can be deduced that a qualified individual may acquire by purchase disposable public agricultural lands up to twelve (12) hectares only. A private corporation or association as well as a partnership as an entity may no longer be considered qualified to purchase or otherwise to compete in that respect with private individuals. What a Filipino private corporation can acquire, however, would be private lands.
Atty. Israelito P. Torreon
2nd Flr., Torreon Bldg.,
1011 Washington Street, Davao City
Bar Reviewer on Registration of Land Titles and Deeds
Ateneo de Davao University
Email ad – torreon_law@yahoo.com
Tel. No. (082) 2244065 / 3006082
Hi, i recently searched the net for the land acquisition in the Philippines. is it possible to acquire a land which is 46 hectares in total? (about 460,000 square meters). I’ve read that the limit is only 2 hectares. is there any work around on this?
[From the Admin] Hi! Please see The Public Land Act (Commonwealth Act No. 141)
http://www.bcphilippineslawyers.com/commonwealth-act-no-141/
thank you sir. =)
Angeline, if a former Filipino is able to acquire an additional piece of rural land (i.e., 1 hectare), sa kanya na iyon even if it later becomes urbanized.
Oh I see. Got your point. Para lang pala sa ADDITIONAL acquisition yun limit na yun sa former Filipinos. That makes sense. Thanks po.
What am I curious about here is that what will happen if a rural land becomes urban(ized) land. Say, they have acquired the rural land after being called former Filipinos na.
I think ganun na kasi nangyayari ngayon sa mga rural lands [or imagination ko lang ata to, just correct me if I’m wrong =)], ang iba nagiging urbanized na and nacurious lang ako, especially on the part of former Filipino buyers. Nway di naman siguro to tatanong sa exam. =) But still, I want to know what will happen. =) Just in case lang.
Thanks RESAR for the reply on my 1st comment and for the effort.
@Angeline — I’m not a lawyer, so I’ll ask my friends about this.
But from what I see, what that former Filipino owns remains his/her property (especially if that piece of property is titled). The limits imposed by BP 185 and RA 8179 apply to additional land acquisitions that the former Filipino wants to make after he/she changed their his/her citizenship. The limits will not affect previously acquired properties.
For example, if the former Filipino acquired 10 hectares of rural land in the past (residential purposes?), and then he or she became a citizen of another country, he/she can no longer acquire additional urban land.
But I need to clarify this with other resource people.
The way I see it, those 10 hectares of rural land in the past are now considered urban/urbanized (let’s assume for residential purposes). Let’s further assume the former Filipino does not own any other piece of land.
Technically, that former Filipino no longer has rural land, and thus should be able to acquire an additional 1 hectare of residential rural land, and/or:
* 5,000 sq meters of commercial urban land, or
* 3 hectares of commercial rural land
I hope that helps…
What if a rural land becomes urbanized? Will the ownership of former Filipinos who have acquired the former rural land lessen there property size owned?