In my years of living in the Philippines, I had never heard much about banks giving mortgages, so I assumed that they were quite rare. I knew that they did exist to a point, because if you go in local bank branches they always have a bulletin board with lists of houses that have been foreclosed on and are available for sale.
Last week, I got an e-mail from a fellow who was asking if he could obtain a mortgage to buy a house for his girlfriend here in the Philippines. Here is what he had to say (names have been deleted to maintain privacy):
Hi Bob, my Filipina girlfriend is pregnant for me and I want to buy a house in Davao City for her as I work in London. I am not rich and but would like to buy a three/ four bedroom bedroom house. I would need my girl friend to take out a mortgage. I want the house to be situated in a nice safe neighborhood but not a neighbor for foreigners or for the rich. My main requirement is that the area is safe and clean. Please can you help with prices is it cheaper to build or is there a house now that I can already pay down on. I would really appreciate your help. Thanks
Well, my first reaction was that finding such an arrangement would be quite difficult! Like I said earlier, I thought that mortgages were quite rare here. However, since I was not sure, I sent an e-mail to Lea Walker. Lea is a local Real Estate agent that I use to handle inquiries that I get through my website. Since I am not an expert on Real Estate, I find it better to refer these inquiries to an expert – Lea!
Lea’s response to my e-mail kind of surprised me! It turns out that mortgages on properties indeed can be obtained. Here is what Lea had to say:
Getting a bank loan in the Philippines is very difficult. But it can be done. We just have to lengthen our patience.
The fastest approval period is 5 days. But releasing of the money takes almost a month due to paperworks. Let me explain the procedure. After submission of the documents, the bank will appraise the property for a fee of Php3,000.00. Approval is 60-70% only of the appraisal. In most cases, that’s 50% of the total selling price. Hence, you have to prepare 30-50% as downpayment. That’s how conservative the banks are.
After approval, the bank will issue a bank guarantee to the owner of the property. Then, we start transferring of the title to your name. (We will do this after paying the owner the downpayment and giving them the bank guaranty which will serve as full payment. So the owner will sign the Deed of Absolute Sale and give us the title. ) Once the transfer of title is done, (usually takes a month) we will give the new title to the bank so the bank will deposit the approved amount to the owner’s account. As you can see, it’s very complicated and the process is real slow.
I would need the following documents:
* 2 valid id’s
* marriage certificate (since you’re not married, i’m afraid that she won’t be qualified.)
* financial documents ie:
bank statement for at least 3 to 6 months
income tax return (for 3 years)
* Certificate of Employment if working
* Business Permit (if in business)
* Latest payslip (if working) at least 3 months
OK, so now, with that information in hand, we can see what the Philippine banks are looking for with a mortgage application.
With this information in hand, I still have some questions, though. Maybe Lea will stop in and leave a comment. Here is what is on my mind:
- What if your income is from abroad? Will the bank consider that, or is it a problem because it is harder to verify?
- What about foreigners, would we qualify for a mortgage? I understand that we are mostly married to ladies from the Philippines, but what if our wives are naturalized in our home country?
- Can you tell me what kind of interest rates banks in the Philippines are getting these days?
- Do you know how long the mortgages are for?
I did get a follow up note from Lea with some very interesting information too. She said that if you don’t qualify for a mortgage from the bank, in many cases the land developer in a Subdivision will self-finance the house for you. They are often much more flexible in accepting those who are refused by the bank. There is a catch, though…. expect to pay interest rates of 14% to 18% on the balance! OUCH!
How about you? Do you have questions about mortgages?
About MindanaoBob
A little info that may be of help. First, remembering this is my opinion and thus worth exactly nothing, it would be a big mistake to buy a house as an absentee owner, especially for someone you are not married to. feel free to bookmark my message and then read it in five years. It is a much, much better idea to save up/earn extra money for the future while you rent a house, economically for your bride to be. Financial difficulties are the prime source of divorce as it is, doing it long-distance with absolutely no property rights seems very risky to me … it cost you more much more than the price of a house.
Which brings us to point two. Rents versus purchase price are all out of whack here in the Philippines. I don’t know the current UK rules of thumb but in the US is 100;1 … don’t pay more than 100 times the gross monthly rental … bsed on prices here in Luzon and many others I see, houses are overvalued by 4 or more times that … in otherwords landlords are not recoveing their investment. (the other sid eof this coin is, rents are about 1/4 of what they should be … which is certainly to my advanatage). You’re not planning to rent? Of course you aren’t … but life it what hapens when you are planning somehting else … and the resale market here is bad … so buy a house today and you may have no choice but to rent it in the future to try to keep your head above water.
Bob’s advisor sounds like she has her head screwed on straight but remeber … her business is not to give advice, but to act as the employee of the owner and get the house sold ,,, period. She is prohibited by law and the real estate this code from acting for the benefit of anyone else except her employer, the seller who will pay her commission. Angain, so far as I know she is honest and forthright as the day is long, but by law she must lo9k out for only one side of the transaction.
Who will be representing your side?
I suggest you read Bob’s post here:
http://liveinthephilippines.com/bobm/2007/12/01/take-time-to-avoid-the-pitfalls/
and perhaps mine here:
http://philfaqs.com/them-thats-living-there/land-ownership/owning-your-own-home/
I know you are aware of how many people are moaning over the prices of real property in the UK … I have a number of English friends, all hurting, and the US is really much worse off than many think. The house I sold in Colorado Springs in 2005 for $130,000 (which was almost at a loss for me) is now on the market more than 6 months, no sale at $75,000 … I hate to sound like the oice of doom, but entering into marriage, children, a new family, a very new culture, etc. is a big stress in itself … why “load the dice” by going into debt for a house which may be a bad deal?
Bob, we got our house through Pag-ibig (or HDMF) housing loan. If an expat has a filipino partner who can apply through Pag-ibig it might be a better deal. Usually applicable for low cost housing (meaning the lot size is small and the house design the same as the others) but if you have the funds you can get two or three lots and redo the house. Pag-ibig is giving out good deals now. Milper pays only Php 1,800 per month. Hope that helps!
The cost of mortgages are very high in the Philippines. Other than the pride in ownership I don’t see any advantage of homeownership in the Philippines. There is no tax incentive and the property value does not increase significantly. If you have to resell your property it may take a long time(years) for it to get sold. You are most often under the mercy of the buyer.
Hi Bob- I have a different slant on housing. We bought the lot and built a house fortunately not needing to borrow money to do so. The way I look at it is, its for our enjoyment as a family its our retirement home and when we are gone our kids can enjoy it or give it away to their cousins if they wish. Our house is modest and cost the same price as a double garage would in the UK (£21,000.00) 2million Peso but its more than adequate for our needs in retirement. If you wish to make money from a property in the Philippine look only long long long term.
Bob / Jim
Like you say Jim, it is not JUST about making money, i think we would all agree here but good advice all round
Bobby said
The cost of mortgages are very high in the Philippines. Other than the pride in ownership I don’t see any advantage of homeownership in the Philippines. There is no tax incentive and the property value does not increase significantly. If you have to resell your property it may take a long time(years) for it to get sold. You are most often under the mercy of the buyer.
———————–
Bobby do you think thats the same for the Condo market in the Philippines?
Not to get off track here but one thing I’ve noticed is real estate in the philippines in way over priced compared to Thailand. This baffles me because thailand has a much better infrastucture / more stable (?) than the Philippines by far. I have to agree with Dave on the rent return of the landlord/ owner in the PI. very low returns are norm there. Usually a rent rate of at least 1% of the value is average in the USA or 8% on your money as a minimum. CAP rates in the PI are …pathetic.I often wonder why anyone would build there !!
Brian
Just down to personal choice, i have bought, (rather than built) 4 years ago and am very happy with my purchase, i know renting would have been more flexible, but for security and a sense of belonging, seemed to be the right thing to do and thats the way it still feels 4 years later. Mind you i am a brit and we do like to own rather than rent our places, i know other nationalities feel differently
Wasn’t all down to finances. I agree with you, infrastructure in thailand is much better than the Phils, stability, not quite so sure, on a par i would think, they had a coup there and currently have a military dictatorship, but it was bloodless and so must have been supported by the Thai monarchy, whereas in the Phils, well a shakey democracy still rules, 50-50 i would say
Hi Bob
Not really a question of mortgage, just a bit of info if anybody is looking for a Letter of Credit (LC) to be opened here in Philippines (this is for an individual, not a corporation).
An LC is required by suppliers for equipment which must be specially imported to the Philippines (also other countries) for them. The money must be lodged in your bank account (currency of the purchase) and the LC must be confirmed, irrevocable and without recourse made in favour of the supplier for the time required to manufacture, ship etc. The money will be released to the supplier on submission of the shipping documents etc or whatever agreement made between you and the supplier.
If a bank loan is required to cover this LC some kind of real estate will have to be put forward as collateral which will take some time to be appraised, approved etc, then tax returns, financial statements and other documents will be required.
When cash is used it still takes some time. It’s better to have all documents in the name of the Filipina wife, not so much paperwork is required then (18 different forms are required). A pro-forma invoice from the supplier signed by both parties will be required to start the proceedings. It will take about one month for approval.
Hi Bob . Weseemto have been down this road before.Iam a big beliver in putting money into property, in fact i own quite anumber of houses . But davao thats abit different. While i really enjoy Davao i would much rather rent for awhile before i bought propertythere.To buy aproperty not aproblem. But if you buy the wrong property in the wrong area. Well you could have it on your hands for ever.No short cuts here as you could lose your shirt.
Hi Frank- Let me say a house in the Philippines is first a home and a long way second an investment as we know it in the western world unless you own a Condo in Makati on Ayala Avenue.
So before you buy or build you must accept this principle or do not go ahead. On the other hand if you come to live in the Phil’s to retire and are lucky enough to live for 20 years or more the amount you would pay on rent will finance your own build.The other advantage of owning a house only the utilities will increase and you have control to some extent over this cost by how much you use. Rent is in the lap of your landlord and you are beholding to him/her. Additionally if you have a family they will inherit it from you, I know family friends of my wife who’s family homes have been in the families posession for 50 or more years.
Houses therefore are a longterm project in the Philippines I’m afraid.
Hi Dave Starr – I agree with what you are saying. Rental prices here, in my opinion, are much more attractive than purchase prices. A lot of people always say that by renting you are throwing away money, but that is not true. If you take that same money that you would use to purchase the house, there are lots of ways that you can make more money than you would have by avoiding the rent.
Hi Cathy – Wow! P1,800 per month! That’s much more affordable than I thought it would be!
Hi Bobby – Your thoughts are right in line with mine!
Hi Jim – I also agree with you fully. If you are looking at the best money advice what Dave Starr and Bobby are saying is very true. However, for a quality of life perspective, if a person wants to own their own place they should do that too. It’s just not an investment situation, as you say.
Hi Rick B – Right on!
Hi Graham – I personally do feel that it is the same for the condos too.
Hi brian – Interesting. I don’t know anything about Thailand, so it’s interesting to hear that.
Hi rick b – I was thinking the same as you… Thailand is currently under a military dictatorship.
Hi Jack – Thanks for your thoughts.
Hi Frank – That is my feeling too – if you are going to buy or build, make sure it is where you want to stay for a long long time, because selling can take forever!
Hi Jim – Very longterm!
Hi Bob,
Please see replies below:
1) I have had clients working abroad who applied for a bank loan. If the wife is in Davao, then she can sign the documents provided that she has a special power of attorney signed by her husband. (SPA should be notarized at the Philippine Embassy where the husband is.And please do not forget the red ribbon.)
If they’re both abroad, we will need a qualified co-borrower who lives in Davao. Qualified means, the co-borrower is working or has business and pays tax. This is just for record purposes and for the bank to have someone to talk to in Davao incase the payments are late, etc. But the income of the principal borrower is where the bank will base the approved amount.
2) The wife should get dual citizenship. You have to be a filipino citizen to apply for a bank loan. Therefore, foreigners are not allowed to get a loan.
This is out of topic, but the real estate law here does not allow foreigners to own a land in the Philippines. One can inherit but can never buy a land. Only the 40% share of a condominium. Or if you have a corporation which is 60% owned by a filipino.
3) Interest rates range from 9.75% to 12% per annum.
4) The term of mortgage depends on the bank where you’re applying a loan from. Some banks, maximum term is 10 years. Others have, 15 years to 20 years. This is mostly based on the age of the principal borrower.
If principal borrower dies during the loan term, the loan is automatically paid by the Mortgage Redemption Insurance which the client pays upon approval of their loan.
Hope this helps. Thank you and God bless!
Lea
3)
Hi Lea – Thanks so much for this additional information! The thing that I found most interesting was the fact that the age of the borrower makes a difference. In the States where I am from any kind of Mortgage insurance is optional, and the estate of the borrower would pay off the balance of the mortgage if there is no insurance. Also, if the estate is unable to pay off the mortgage, the house could be foreclosed and the proceeds of the sale of the property would pay off the mortgage balance.
Interesting information! Thanks again for your input!
Hi Dave,
I was only asked if a client can get a bank loan in the Philippines. I said, it can be done but it’s like shedding blood and tears.
The desire came from the client per se. Therefore, I gave my opinion to share what I have experienced.
I do not gain anything out of it. I have helped several clients who did not buy the property through me and yet, I helped them get a bank loan. I have been in Real Estate business for almost eight years. That’s why over the years, I’ve made friends which made my clients’ life a lot easier. As most of you probably know now, getting something done in the Philippines takes forever, so to speak. Therefore, getting help from the right places, makes it easier and lighter.
I mentioned earlier that sometimes I help my clients for free, the reason of which is: I am married to an american. So I knew how he felt the first time he came to the Philipines. Accepting my country as it is was not easy for him because of what he’s gotten used to. I am sure, a newcomer in the Phils, would somehow feel the same way. So I try to help the best way I can to make it easier for others as well. Now, my husband does the same. He goes out of his way to help.
That’s the reason why God has blessed me with more clients that I can handle.
Monetary reason isn’t everything. It’s all about helping both parties. Even if the seller pays me, if I believe that it’s not what the client wants, then we move on. For me, my clients’ needs come first.
That’s why most of our clients have remained our friends to this day.
Thank you and God bless.
Lea
Great discussion here. And Lea’s responses further prove to me she is both knowledgeable and honest, traits that are often sadly lacking in real estate sales in the Philippines and in the US, for sure.
Also was glad to see Pag-IBIG mentioned, anyone looking to buy should certainly sjop and compare .. they have long term finacing for Filipino purchasers in the Philippines and outside the Philippines. they also have some intersting tax free, government insured investment bonds.
As someone with a lot of experience about co-borrowing/co-signing for loans … Lea dismisses this as a admisistrivia function but let me assure you .. a co-borrower has the responsibility to pay the loan if it defaults .. s/he is not just someone for the bank to converse with … and, in some cases a co-borrower can gain control of the property. Be very, very careful about ever being a co-borrower or ever having one … you _need_ a lawyer … your own lawyer, independent of the property owner/sales agent before entering into that kind of arrangement.
and @ Brian and many others who make the statement that owning gives you a sense of security … I’d honestly like to know how you mean that term? I rent. I made essentially no investment and pay a month by month rent that is about 1/5th of what a loan payment to by this same house would be. The downside to renting is, the landlord can tell me he wants me out. You “bought” and feel much more secure? Yet you have _no_ ownership rights and could be told to leave at any time as well … examples, marital difficulties, pre-existing owner files a claim (there is no title insurance here), national government orders foreigners to leave, local government exercises eminent domain, etc. I really can’t see how you are more “secure” than I am …but I’m open to learning.
Hi Dave – One other note regarding your statement about a sense of security. As foreigners we all need to remember that we live here and stay in the country at the will of the Philippine Government. Say or do the wrong thing, and you can be “asked” to leave. I have known a number of people who have been deported for various reasons. Some of the reasons were, in my opinion, not very serious too. So, if you own a house and get deported for any reason – you have no choice but to walk away from it.
Another thing to consider is the stronger Peso. I bought a property in Samal Island when the exchange rate was P56 per $1. Now the exchange rate is P41 per $1. If one has a mortgage ones monthly payments will also increase. A condo is also a good alternative but “buyer beware” choose a reputable builder because your condo might never get built or finished. Although they entice you with a low downpayment and a low monthly payment. There are sometimes a balloon payment at the end of each year or 2 year period. Inquire also about the cost of ownership and other hidden cost like management fees and insurance. It might be cheaper to rent. One more item. The condos in the Philippines are not centralized airconditioned if you leave it unoccupied and all the doors and windows closed for extended periods of time. Items like rubber garters on clothes and furnitures might get damaged beacause of the heat.
My mother passed away a in 2003. Even before she was buried the BIR (internal revenue) was already knocking on our door with the bill for the inheritance tax. It was for a large percentage of the half the value of all our properties. You must have enough savings for this contingency if our of the spouse dies. If your property is worth millions. Your bill might also be in the millions.
Hi Jim i have afriend who rused in and bought a house in Quezon city.He liked the house and itwas at agreat price .So in the goes feet first did not reseach the neigbourhood or nothing . So after he moves into his new home he suddenly realises.That his neighbours consistof a house of illrepute and one of the local gansters. Jim what i am saying is really grt to known thearea inside out before you buy .Or end up like my friend in Quezon city who cannot give his house away.
Hi Lea Walker Wehave never met (LUCKY YOU). When last in Davao in august my you were selling a huose for my good friend Frank B anks.Recently i lost my dairy containing a lot of phone numbers including Franks .I would appreciate if you could send me his mobile number via Bob Martin.Ifnot i understand. if you would many thanks . Bob if you passit on to me Iwill pay for the coffees end of next month.
Dave
Just down to personal choice, thats all, mistakes can be made but there is merit in both, be happy with your choice, no need to try and convince everyone they should follow your path and that is the correct way
Hi Frank,
Just had dinner with Frank and Polly last night at the gallagher’s in Las Terrazas. We will be meeting for christmas party soon also. I’ll inform him that we corresponded through here.
RE: phone number, will email it to Bob.
Thanks and God bless.
Lea
Hi Bobby – Wow, the BIR is as efficient as the IRS is in the USA!
Hi Frank Fealey – Very important to check every aspect before making the purchase! I bet your friend in Quezon City realizes that now!
Hi rick b – I think that Dave was just giving his reasons for what is best in his opinion. The nice thing is that we all get to do that, and we are all equal in the discussion!
Hi Lea – I’ll be happy to pass that along to Frank for you.
Hi Bob,
I’d like to share a little input on Home Development Mutual Funds, most commonly known as Pag-ibig Fund.
Members have a chance of getting a housing loan through them. You have to be a member of at least one year. Meaning, you’ve paid the whole year’s membership fee. And of good credit standing. That means you pay the membership fee on time and no existing salary or any other loan with HDMF.
As of the moment, they have more or less a hundred foreclosed units that everyone can buy.
a) Cash Purchase: (outright cash or one year installment)
* one does not have to be a member to buy from them
b) Housing Loan:
* as explained above plus you have to submit the requirements which
is more or less the same with the bank loan.
* As a member, the downpayment is: minimum of 5% of the total selling price. And maximum of 20% of the TSP. Term of Payment: max of 25 years. Rate per annum: 9 to 12% .
The price range from Php180,000.00 to 400,000.00 depending on the location and the lot sizes.
John and I bought a house and lot package last year to remodel and sell again. We bought a 120sqm lot in Emily Homes for Php300,000.00 . Pag-ibig took 2 to 3 months to evict the people living in the said house. By the time they did, the house looked like a skeleton.
Which was ok with us because we’re tearing off the old house anyway. I’m sharing this for everyone to be aware that most of these foreclosed assets have people living in them. These were the original owners who did not pay their amortization for at least 5 years. And most of them are not friendly.
That’s why, it’s cheap.
There’s a risk you have to take.
Thanks again!
Lea
Hi Lea – Thanks for the primer on Pag-Ibig. I knew of Pag-Ibig, but didn’t know many details about it, but have learned a great deal from what you have written here.
Hi Frank- I could not agree with you more the last thing you want to do is buy anywhere that has a low reputation. What I was trying to say is your own property brings peace of mind in the long term as usually there are dependants left behind when you eventually go. But the initial descision is made by circumstances and personal choice not what other people think or say.
Anyhow this has been an excellant discussion for those about to make that descision.
Hi Dave-In reply to your question regarding a sense of security, I personally much prefer to own my home. If I live to be say 70 or more God willing, I don’t want to be worrying about some landlords future plans as if he passes on what about his families needs etc.
Call me old fashioned if you like but I have a good wife and great kids and what I do I also do for them as they share my life with me. Maybe I’m lucky not to have doubts in my mind about being cheated by in-laws or such hence my genuine reasons for owning “Our” property with a big emphisis on “Our” we are a family unit through and through.
I hope that explains at least in my case what is meant by security.
>> real estate law here does not allow foreigners to own a land in the Philippines. One can inherit but can never buy a land
my lawyer told me this is false. The RP has a series of definitive Supreme Court rulings which hold that the Constitution means what it says. No loopholes or tricks will pass the “smell test” in front of a judge.
Davao City has a number of reliable lawfirms which can assist a foreigner in acquiring beneficial control of that which you want to control. Many many of wealthy “filipinos” are in fact foreign nationals. For example – the Ayala family. The process works. The process is not free. There is no free lunch.
@ Lea,
Thank you yet again … indeed I don’t know why Pag-IBIG’s light is so often hidden, they have a number of programs and also excellent, government secured investment bonds. It is certainly a source to consider, and I learned things from your outline. Appreciate it.
@ Jim,
If you’re happy, I’m happy, just one more case of a word meaning something different to different people I guess, thanks.
@ Rick B,
I fail to see how you construe honest discussion as an attempt to enforce my will on others. I merely would prefer that people not use words with meanings they do not hold. Be hapy and do as you wish, I have no dog in this hunt.
@ Alan B,
You may be right … I am not a lawyer nor an expert. i will say that all the foreigners that I know of factually who got into land ownership issues did so under the advice of some attorney or another who “had a way”. A “beneficial interest” is not specifically ownership … although it may indeed serve as such if it suits the one who holds it. Godspeed.
To all, as a sign off from this discussion … there _are_ legal ways for foreign investors to own land in the Philippines. The ones I am familiar with are not suitable to what most people are thinking of in terms of an individual piece of property and a family home, but it is certainly possible under current law.
Also remember a great deal of large land holdings (and the owning families) predate not only the present Constitution, but even Filipino independence and in the case of certain families go back to Spanish land grant times … so what a family might own today has no bearing on what an outsider can buy today, and has also been correctly pointed out the law specifically allows a foreigner to own land which s/he inherited. I am aware of American citizens who own land that their American Citizen parent’s owned prior to 1946 and their title to the land is legal under past and present law.
Be well, all.
Thanks Lea and Bob in receipt of my friends phone number. Ohh shooks i have been sucked into buying the coffees again.
Hi Frank Fealey – To keep it easy on the pocket, I’ll drink instant!
Hi Bob,
I would like to share with you and the rest of the group the Law governing Land Ownership in the Philippines. This is very long but please bear with me. People would come up to others and say yes , there’s a way for a foreigner to own land in the Philippines. I am hoping that through this, everyone will be guided accordingly, to avoid trouble in the future. Please be aware also that some lawyers and judges have failed the Real Estate Licensure Exam. Therefore, there is a possibility that not all lawyers know the Real Estate Law here.
WHO CAN OWN LANDS IN THE PHILIPPINES:
Only Philippine Nationals can own land in the Philippines.
WHO ARE CONSIDERED PHILIPPINE NATIONALS (R.A. 8179)
1)Filipino Citizens
2)Corporation Organized under Philippine Laws, 60% of the capital stock outstanding and entitled to vote is owned and held by Philippine citizens;
3)Corporation organized abroad and registered as doing business in the Philippines under the Corporation Code, 100% of the capital stock outstanding and entitled to vote is wholly owned by Philippine citizens;
4)Domestic Partnership wholly owned by Philippine citizens;
WHO ARE CONSIDERED FILIPINO CITIZENS (Art. IV, Sec. 1 1987 Constitution)
1)Those who are citizens of the Philippines at the time of the adoption of the 1987 Constitution;
2)Those whose fathers or mothers are citizens of the Philippines;
3)Those born before January 17, 1973 , of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority; and
4)Those born in the Philippines of foreign parents who before the adoption of said Constitution had been elected to public office in the Philippines.
REASON WHY THERE IS A NEED TO ELECT PHILIPPINE CITIZENSHIP WITH REGARD TO THOSE BORN BEFORE JANUARY 17, 1973 OF FILIPINO MOTHERS:
Under the 1935 Constitution, a child born is considered a Filipino citizen only if his Father is a Filipino Citizen. If born of a Filipino mother but an alien father, the child has to elect Philippine Citizenship upon reaching the age of majority, (which at that time was set at 21 years old.)
EXCEPTION TO THE RULE THAT ALIENS CANNOT OWN LANDS IN THE PHILIPPINES:
ALIENS may own lands in the Philippines only under the following circumstances:
A) Former Natural born Filipino citizens.
LIMITATIONS TO OWNERSHIP AS PROVIDED BY BP BLG. 185:
1)The land shall be used by him/her as residence; and
2)The area shall not exceed 1000 square meters if an urban land or 1 hectare if a rural land;
3)If the former natural born Filipino citizens already owns urban or rural land for residential purposes, he may still be entitled to be a transferee of additional urban or rural land, provided that the total land area owned by him will not exceed the allowed maximum limit.
4)In case of married couples, one of them may avail of the privilege herein granted provided, that if both shall avail of the same, the total acquired shall not exceed the maximum area fixed herein;
5)He/she cannot acquire more than two (2) lots;
6)If he/she acquires two lots, the same must be situated in different municipalities or cities;
7)If he/she has already acquired urban land, he/she shall be disqualified from acquiring rural land, and vice versa.
LIMITATIONS TO OWNERSHIP AS PROVIDED BY R.A. NO. 8179:
Land acquired under this act shall be primarily, directly and actually used by the transferee in the performance or conduct of his business or commercial activities in the broad areas of agriculture, industry, and services, including the lease of land, but excluding the buying and selling thereof. (Section 5 , Rule XII of RA 7042, as amended by 8179).
The area shall not exceed 5,000 square meters if an urban land or 3 hectares if a rural land.
In case he/she already owns urban or rural lands for business or other purposes, he/she shall still be entitled to be a transferee of additional urban or rural land for business or other purposes which when added to those already owned shall not exceed the maximum areas allowed.
In case of married couples, one of them may avail of the privilege herein granted provided that, if both shall avail of the same, the total area acquired shall not exceed the maximum area fixed herein.
A transferee who has already acquired urban land shall be disqualified from acquiring rural land and vice versa. However, if the transferee has disposed of his urban land, he may still acquire rural land and vice versa provided that this will be used for business or other purposes.
B) If the foreigner acquired the same through succession as one of the legal heirs of the deceased:
C) Dual citizenship under the Dual Citizenship Law (RA 9225 effective on Sept. 17, 2003). Filipinos who had lost their Philippine citizenship by acquisition of citizenship of another country may reacquire their citizenship under this law without renouncing their foreign citizenship. This reacquisition of Filipino citizenship shall grant full civil and political rights to the Filipino dual citizen, including the right to own private lands and properties in the
Philippines, without limitation other than those normally imposed on Filipino citizens.
D) Foreigners can acquire condominiums but up to a certain extent only;
E) Lands acquired by Americans prior to July 4, 1946 (vested rights)
F) Lands acquired by Americans before July 3, 1974 provided the following requisites are present:
1) They are formerly Filipino Citizens OR who on May 27, 1976 had continuously resided in the Phils. for at least 20 years OR have become permanent residents of the Philippines; and
2) Had acquired private residential lands not exceeding 5,000 square meters for a family dwelling (P.D. No. 173)
Thank you and God bless. Merry Christmas!
Lea
Hi Lea – Thanks for sharing that. I don’t know if this issue could ever be cleared up, but let’s hope!
Hi Bob,
I have here 2 storey house, 5 bedrooms, with parking area and have a nice and friendly neighborhood. But the House is for Sale with clean Title.
Hi ludwig Melgazo – Good luck on the sale of your house! I hope it all works out for the best for you.
Can i ask a question Lea
Can a foreigner own a Condo if he has just a tourist visa? 21 day entry renew every 2 months
Also if he bought several Condos and rented some of them out
would he have to have a business visa?
many thanks
graham….
Hi Graham,
Yes, he can buy a condo. Foreigners are allowed to buy the 40% share of the entire condominium project.
No need for a business visa also.
Permits are only applicable to filipinos who owns townhouses and apartments for business. Condo and houses do not fall into that category since it’s a residential dwelling.
Thank you.
Lea
Hi Bob ..Phil here When we built our home i took out a small loan here in the states my wife hired a small time carpenter and we built our home for 120,000 pesos encluding land ..and it fits in with the neighborhood …
Hi Phil – Wow, just P120k? Not bad!
I was born an American citizen because of my Dad’s citizenship. I guess it would really be impossible for me to buy property in the Philippines. Looking back, I was also denied my RN license after passing the Philippine RN boards because of my citizenship.
Well, we can’t have everything we want. At least, I can practice my profession and buy property here in the USA.
Hi Shirley – If your Mom was a Filipino citizen at the time of your birth, you should be able to file for Dual Citizenship, and then you would be able to buy land here, and also practice your profession. That law is just a few years old, and probably was not in force at the time that you were declined before.