RIGHT TO OWN
1. General Rule – Only Filipino Citizens and corporations or partnerships at least 60% of the capital of which is owned by Filipinos are entitled to acquire land in the Philippines.
2. As exception to the general rule, alien acquisition of real estate in the Philippines is allowed in the following cases:
a.. Acquisition before the 1935 Constitution;
b.. Acquisition thru hereditary succession. If foreign acquiree is a legal heir;
This simply means that when the non-Filipino is married to a Filipino citizen and the spouse dies, the non-Filipino as the natural heir will become the legal owner of the property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she does not have any Filipino citizenship.
c.. Purchase of not more than 40% interest in a condominium project;
d.. Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by Law (Batas Pambansa 185 and R.A. 8179)
3. A Filipino who married an alien retains her Philippine citizenship (unless by her act or ommision, she is deed to have renounced her Philippine citizenship) and may therefore acquire real estate in the Phiippines.
ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZEN
1. Mode of acquision is not limited to voluntary deeds (such as sale or donation) but includes involuntary deeds (such as tax sale, foreclosure sale, or execution sale).
2. Maximum area that may be allowed is as follows:
a.. For residential purpose - 1,000 square meters of urban land or one (1) hectare of rural land (BP 185)
b.. For business or other purpose – 5,000 square meters of urban land or three hectares of rural land.
“Business or other purpose” refers to the use of the land primarily, directly and actually in the conduct of 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.”
3. In case of married couple, one or both of them may avail of the privilege, provided that the total acquisition shall not exceed the maximum area allowed.
4. A transferee of residential land under BP 185 may still avail of the privilege granted under RA 8179.
5. A transferee who already owns urban or rural land for residential purpose, may acquire additional urban or rural land for residential purpose which, when added to that already owned by him shall not exceed the maximum area allowed by law.
The same priviledge applies to a transferee who already owns urban or rural land for business purposes.
6. A transferee may not acquire more than two urban or two rural lands which should be located in different cities or municipalities.
7. A transferee who has already acquired urban land for residential purpose shall be disqualified to acquire rural land for residential purpose and vice versa. The same rule applies to a transferee of land for business purpose.
Dual citizenship means having two citizenships and passports from two different countries. Dual citizenship allows the citizenship holder full rights of possession of Philippine real property. This is a new law and it is still unclear as to the procedures involved to implement it. Dual citizenship is now available for the following:
Former Filipino citizens born in the Philippines , who have immigrated to another country and obtained citizenship of that country.
Note: For former natural born Filipino Citizen, please visit the Philippine Embassy in your country for more information or to apply for Dual Citizenship.
Foreign Ownership as a Philippine Corporation
Foreign nationals or corporations may completely own a condominium or townhouse. To take ownership of a private land, residential house and lot, and commercial building and lot, foreign nationals or corporations should form a Philippine corporation. The corporation is to be 40% foreign-owned (maximum) and 60% Filipino-owned (minimum), and with at least five  incorporators. Upon incorporation, a main bank account should be tied to it. A foreign national may be the sole person in the bank account, allowing him/her total control over the funds derived from the corporation and the income or sale of the asset or property.
Foreign Leasing of Philippine Real Estate Property
A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years.
As a rule, only Filipino citizens and corporations or partnerships with least 60% of the shares are owned by Filipinos are entitled to acquire land in the Philippines.
Aliens can acquire land in the Philippines only on a few exceptions: 1) Acquisition before the 1935 constitution. 2) Acquisition thru hereditary succession -if the foreigner is a legal heir. 4) Purchase of not more than 40% interest as a whole in a condominium project. 4) Purchase by a former natural born Filipino citizen who acquired foreign citizenship & has not applied and granted dual citizenship can purchase up to 1,000 square meters of residential land and 1 hectare of agricultural or farm land.
Modes of Acquiring Land:
Private Grant – voluntary transfer or conveyance of private property by a private owner, such as sale or donation.
Public Grant – acquisition of alienable lands of the public domain by homestead patent, free patent, sales patent, or other government awards.
Involuntary Grant – acquisition of private party against the consent of the former owner, such as foreclosure sale, execution sale, or tax sale.
Inheritance – acquisition of private property through hereditary succession.
Reclamation – filling of submerged land, subject to existing laws and government regulations.
Accretion – acquisition of more lands adjoining the banks of rivers due to the gradual deposit of soil as a result of the river current.
Prescription – acquisition of title by actual, open, continuous, and uninterrupted possession in the concept of owner for the period required by law.
A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 50 years, and renewable for another 25 years. Or lease the property in your Philippine Corporation name for an unlimited period of time.
Acquisition is the act of procuring or getting a hold of real estate property. Disposition is the manner of alienation, transfer of possession and ownership thereof as prescribed by the Philippine law. The acquisition and disposition of real estate is embodied in written agreements or contracts voluntarily entered into and subscribed by the selling and buying parties thereof, before a public officer designated as the Notary Public of the City or Province where the subject property is located. Thereafter, the instrument embodying the particular real estate transaction is required by law to be recorded in the Registry of Deeds in the City or Province where the real estate property is involved and located. The Philippines uses the “Torrens” system of real estate ownership.
The Bundle of Rights Theory
The bundle of rights theory inherent to property ownership are the right to use (Jus-Utendi), the right to enjoy the fruits of (Jus-Fruendi), the right to dispose (Jus-Disponendi), the right to abuse (Jus-Abutendi), the right to recover (Jus-Vindicandi), and the right to possess (Jus-Possidendi). The rights incident to ownership are, the right:
to enjoy and dispose of a property without other limitations than those established by law;
to file action against third parties to recover ownership;
to use force as may be reasonably necessary to repeal or prevent an actual or threatened unlawful invasion or usurpation of his property (Art. 429, NCC, relate to Art. 312, RPC);
the right to enclose or fence property – walls ditches, live or dead hedges - or by any other means without detriment of servitudes constituted thereon;
to demand indemnity for damages caused to property;
the right to compensation in the event of expropriation;
the right to be restored to possession in case of unlawful dispossession;
the right to the surface and subsurface of the land, right to construct thereon any works, plantation and excavation without detriment to servitude and subject to special laws and without right to complain of the reasonable requirements of aerial navigation;
the right to hidden treasure;
the right to accession and fruits of the property;
the right to “quiet title” to real property or any interest therein.
Limitations on right of property ownership:
CONSTITUTIONAL – such as police power, eminent domain or expropriation of private property for public use, taxation and escheat when revision of private property to state ownership in case of death of property owner without an heir;
LEGAL – zoning ordinances, regulations on subdivision projects, building code, and other special laws and regulations; and
CONSENSUAL/VOLUNTARY – easements and servitudes, usufructs, lease agreements, restrictions in subdivision and condominium deeds or restriction.
The Regalian Doctrine of property ownership
A principle in law which means that all natural wealth – agricultural, forest or timber, and mineral lands of the public domain and all other natural resources belong to the state. Thus, even if the private person owns the property where minerals are discovered, his ownership for such does not give him the right to extract or utilize said minerals without permission from the state to which such minerals belong.
The Steward Concept of property ownership
The Steward Concept is a legal doctrine which holds that property ownership presupposes concomitant obligations to the state and the community and that property is supposed to be held by the individual only as trustee for people in general; and that as mere steward, the property owner must exercise his rights to the property not just for his own exclusive and selfish benefit or interest but for the good and general welfare of the nation as a whole.
The National Housing Authority
Presidential Decree No. 957, which regulates the sale of subdivision and condominium developments, and providing penalties for violations thereof. The National Housing Authority has exclusive jurisdiction to regulate real estate trade and business, a function, which is presently exercised by the Housing and Land Use Regulatory Board (HLURB). Certain conditions are required before a license to sell condominium development units and or subdivision development lots and homes is issued to a Filipino or Foreign owned individual or corporation. The requirements include a certificate of registration, a performance bond, and an approval of the building plans and specifications. Violation of these rules could mean fines, cancellation of license and or imprisonment.
Home Buying Guide for Balikbayans
Former natural-born Filipinos who are now naturalized citizens of another country can buy and register, under their own name, land in the Philippines but limited in land area (see below). However, those who avail of the Dual Citizenship Law can buy as much land as any other Filipino citizen.
Under Republic Act 9225 (Dual Citizenship Law of 2003), former Filipinos who became naturalized citizens of foreign countries are deemed not to have lost their Philippine citizenship, thus enabling them to enjoy all the rights and privileges of a Filipino.
Steps to Gain Dual Citizenship:
If you are in the Philippines, file a “Petition for Dual Citizenship and Issuance of Identification Certificate (IC) pursuant to RA 9225” at the Bureau of Immigration (BI) and for the cancellation of your alien certificate of registration.
Those who are not BI registered and overseas should file the petition at the nearest embassy or consulate.
Birth certificate authenticated by the National Statistics Office (birth certificate from the NSO can be requested online and mailed to you)
Accomplish and submit a “Petition for Citizenship and Issuance of Identification Certificate (IC) pursuant to RA 9225” to a Philippine embassy, consulate or the Bureau of Immigration.
Pay a $50.00 processing fee, schedule and take an “Oath of Allegiance” before a consular officer.
The Bureau of Immigration in Manila receives the petition from the embassy or consular office. The BI issues and sends an Identification Certificate of citizenship to the embassy or consular office.
If a former Filipino who is now a naturalized citizen of a foreign country does not want to avail of the Dual Citizen Law, he or she can still acquire land based on BP (Batas Pambansa) 185 & RA (Republic Act) 8179 but limited to the following:
For Residential Use (BP 185 – enacted in March 1982):
Up to 1,000 square meters of residential land.
Up to one (1) hectare of agricultural of farm land.
For Business / Commercial Use (RA 8179 – amended the Foreign Investment act of 1991):
Up to 5,000 square meters of urban land.
Up to three (3) hectares of rural land.
Foreign Investor’s Guide
By law, foreigners don’t have the right to acquire land in the Philippines. Only Filipino citizens can own land (there have been many proposals to amend this law but of this writing, the law remains unchanged.) The simplest way for a foreigner to acquire real estate properties is to have a Filipino spouse purchase a property in his/her name.
Corporations or partnerships that is at least 60% Filipino owned are entitled to acquire land in the Philippines. An exception to this rule, is foreign acquisition of a Philippine real estate in the following cases:
* Acquisition before the 1935 constitution.
* Acquisition thru hereditary succession if the foreign acquire is a legal or natural heir. This means that when you are married to a Filipino citizen and your husband/wife dies, you as the natural heir will become the legal owner of his/her property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she is not a Filipino citizen.
* Purchase of not more than 40% interest in a condominium project.
* Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by law. (natural born Filipinos who acquired foreign citizenship is entitled to own up to 1,000 square meter of residential land, and 1 hectare of agricultural or farm land)
* Filipinos who are married to aliens who retain their Filipino citizenship, unless by their act or omission they have renounced their Filipino citizenship.
Owning of houses or buildings is legal as long as the foreigner does not own the land on which the house is build.
Setting up a corporation with 40% of the stocks in the foreigner’s name and 60% to Filipinos is a good alternative. There must be a minimum of 5 stockholders, and foreigner can have the Filipino stockholders sign blank transfer of the stocks for security.
The land can be leased by the foreigner or a foreign corporation on a long term contract for an initial 50 year period and renewable every 25 years. A foreigner can rent a lot and at the same time legally own the house on the rented land.
The Condominium Act of the Philippines, R.A. 4726, expressly allows foreigners to acquire condominium units and shares in condominium corporations up to 40 % of the total and outstanding capital stock of a Filipino owned or controlled condominium corporation.
Those who claim that foreigners can own a house & lot in the Philippines have a condominium title to their property. There are a very few single-detached homes or Townhouses in the Philippines with condominium titles. Most condominiums are mid to high rise buildings.
If you wish to stay permanently in the Philippines or if you frequent the Philippines and stay for long periods. Avail of the government’s Special Resident Retirement Visa (SRRV).
Special Resident Retirement Visa (SRRA) is a privilege granted to foreigners who would like to have a permanent resident status in the Philippines. For investing in the Philippines, foreigners can enter and leave the country as many times and as long as one wishes, including family members. With a Special Resident Visa, a holder can live, do business, study in the Philippines indefinitely.