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.
Exceptions:
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.
When considering to start a corporation please note there wil be required
an approx of U$ 50.000 deposit on bank.
Rent
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.
Condominiums
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.
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.
Requirements for Special Resident Retirement Visa
Principal Applicant:
• Application Form
• Passport with valid entry to the Philippines
• National Bureau of Investigation (NBI) Clearance or Police Clearance
(to be authenticated by the Philippine Embassy)
• Medical Clearance (if applicant is abroad, this clearance must be
authenticated by the Philippine Embassy)
• 6 pieces 6" x 6" pictures
• 6 pieces 1" x 1" pictures
• Bank Certification from an accredited bank of the Philippine
Retirement Authority of bank deposit (US$ 50,000 for 50 years old & above,
$75,000 for 35 to 49 years)
• Processing fee: US$ 1,500
Spouse / Dependent:
• Application Form
• Passport with valid entry to the Philippines
• NBI Clearance or Police Clearance (to be authenticated by the
Philippine Embassy for 18 years old and above)
• Medical Clearance (if applicant is abroad, this clearance must be
authenticated by the Philippine Embassy)
• 6 pieces 6" x 6" pictures
• 6 pieces 1" x 1" pictures
• Marriage Certificate (authenticated by the Philippine Embassy) for
spouse.
• Birth Certificate (authenticated by the Philippine Embassy) for
dependents.
In Lieu of Marriage or Birth Certificates:
• Family Register (for Koreans)
• Household Register (for Taiwanese)
• Certificate of Relationship (for P.R.O.C.)
Fees:
Service fee of $300 each for spouse or dependent (up to 3 dependents)
For families with more than 3 dependents, additional $ 15,000/dependent
Immigration conversion fee:
• Php: 7,600 for spouse and children 16 to 20 years old.
• Php: 7,350 for children 14 to 15 years old.
• Php: 6,850 for children 13 years old and below
• PLRA ID card ($10) for spouse and/or dependent
• Immigration express fee of Php 500 per person (elective)
Note: The required investment money (US$ 50,000 for 50 years old &
above, $75,000 for 35 to 49 years) to avail of the Special Resident
Retirement Visa (SRRA) must be deposited in a bank accredited by the
Philippine Retirement Authority. This deposit can be withdrawn after 6
months but must be invested in the Philippines. It can be used to buy
properties (condominiums) stocks, securities, etc.
Tips Before Buying Real Estate in the Philippines
Here are tips a buyer must remember before buying any property in the
Philippines, specially if you are buying a single property from an individual:
1. Make sure the "Transfer Certificate of Title" is authentic. The easiest way
to check if the title to the property you are buying is authentic is by getting
"Certified True Copy" of the title from the Register of Deeds. This office is
usually located at the city or municipal hall where the property is located.
Ask the seller of the property for a photocopy of the title -you will need the
title number and the name of the owner to get a certified true copy of the
title from the Register of Deeds.
2. Verify that title is clean - meaning the property is not mortgaged (no liens
& encumbrances on the property). You can see that at the back of the title
with the heading "Encumbrances". This page must be empty if you are told
that the title is "clean". But sometimes the space for the technical
description of the property on the front page of the title is not enough and
the description of the property is continued on the "Encumbrances" page,
this is of course all right.
3. Make sure that the land described on the title is really the land that you
are buying. You can validate this at the Register of Deeds or by hiring a
private land surveyor or a geodetic engineer. Land titles don't have any
street name and number to pin point a property, it is a must to confirm that
the actual property you are buying matches the technical description on
the Transfer Certificate of Title.
4. Make sure that the sellers are the real owners. If you are buying from an
individual property owner, ask for identification papers like passport or
driver's license, it is also a good idea to talk to the neighbors or the
Barangay Captain to confirm the identity of the sellers (you might as well
ask some history of the property).
5. Confirm that the yearly real estate taxes are paid. Ask for certified true
copies of the Tax Declaration and original Tax Receipts to confirm that real
estate tax payments are up to date.
If the above check list is in order, it is generally safe to proceed with the
purchase of real estate in the Philippines.
General Real Estate Information
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.
Requirements:
• 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.
Guide when Buying real Estate in the Philippines
This is the standard sharing of expenses between the buyer and the seller
when transferring the real estate property title (TCT - Transfer Certificate of
Title or CCT - Condominium Certificate of Title) to a new owner:
The SELLER pays for the:
• Capital Gains Tax equivalent to 6% of the selling price on the Deed of
Sale or the zonal value, whichever is higher. (Withholding Tax if the seller is
a corporation)
• Unpaid real estate taxes due (if any).
• Agent / Broker's commission.
The BUYER pays for the cost of Registration:
• Documentary Stamp Tax - 1.5% of the selling price or zonal value or
fair market value, which ever is higher.
• Transfer Tax - 0.5% of the selling price, or zonal value or fair market
value, which ever is higher.
• Registration Fee - 0.25% of the selling price, or zonal value or fair
market value, which ever is higher.
• Incidental and miscellaneous expenses incurred during the
registration process.
The above sharing of expenses is the standard practice in the Philippines.
However, buyers and sellers can mutually agree on other terms as long as
it is done during the negotiation period (before the signing of the "Deed of
Sale").
The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal
transfer of real estate property ownership. The deed of sale is then taken to
the Registry of Deeds to be officially recorded after paying the documentary
stamp, transfer tax and registration fees. Always verify from the Registry of
Deeds the authenticity of a Transfer Certificate of Title before buying a
property. If the seller only has a tax declaration, be extra cautious and
check with neighbours, the Barangay captain or anyone in the know in the
community to verify the seller/owner's true identity and the property's
history.
Your Agent / Broker will usually do the registration process (sometimes for
a fee), however, all government , taxes, transfer fees and incidental or
miscellaneous expenses will be shouldered by the buyer.
Documents needed when transferring the title (TCT or CCT) to the new
owner:
• Certified true copy of the title
• Copies of the Deed of Absolute Sale
• Latest tax declaration of the property
• Certificate from the Bureau of Internal Revenue that the capital gains
tax and documentary stamps have been paid
• Receipt of payment of the transfer tax and registration fees
An adapted form of the "Torrens" system of land registration is used in the
Philippines. The system was adapted to assure a buyer that if he buys a
land covered by an Original Certificate of Title (OCT) or the Transfer
Certificate of Title (TCT) issued by the Registry of Deeds, the same will be
absolute, indefeasible and imprescriptible.
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.
Exceptions:
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.
When considering to start a corporation please note there wil be required
an approx of U$ 50.000 deposit on bank.
Rent
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.
Condominiums
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.
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.
Requirements for Special Resident Retirement Visa
Principal Applicant:
• Application Form
• Passport with valid entry to the Philippines
• National Bureau of Investigation (NBI) Clearance or Police Clearance
(to be authenticated by the Philippine Embassy)
• Medical Clearance (if applicant is abroad, this clearance must be
authenticated by the Philippine Embassy)
• 6 pieces 6" x 6" pictures
• 6 pieces 1" x 1" pictures
• Bank Certification from an accredited bank of the Philippine
Retirement Authority of bank deposit (US$ 50,000 for 50 years old & above,
$75,000 for 35 to 49 years)
• Processing fee: US$ 1,500
Spouse / Dependent:
• Application Form
• Passport with valid entry to the Philippines
• NBI Clearance or Police Clearance (to be authenticated by the
Philippine Embassy for 18 years old and above)
• Medical Clearance (if applicant is abroad, this clearance must be
authenticated by the Philippine Embassy)
• 6 pieces 6" x 6" pictures
• 6 pieces 1" x 1" pictures
• Marriage Certificate (authenticated by the Philippine Embassy) for
spouse.
• Birth Certificate (authenticated by the Philippine Embassy) for
dependents.
In Lieu of Marriage or Birth Certificates:
• Family Register (for Koreans)
• Household Register (for Taiwanese)
• Certificate of Relationship (for P.R.O.C.)
Fees:
Service fee of $300 each for spouse or dependent (up to 3 dependents)
For families with more than 3 dependents, additional $ 15,000/dependent
Immigration conversion fee:
• Php: 7,600 for spouse and children 16 to 20 years old.
• Php: 7,350 for children 14 to 15 years old.
• Php: 6,850 for children 13 years old and below
• PLRA ID card ($10) for spouse and/or dependent
• Immigration express fee of Php 500 per person (elective)
Note: The required investment money (US$ 50,000 for 50 years old &
above, $75,000 for 35 to 49 years) to avail of the Special Resident
Retirement Visa (SRRA) must be deposited in a bank accredited by the
Philippine Retirement Authority. This deposit can be withdrawn after 6
months but must be invested in the Philippines. It can be used to buy
properties (condominiums) stocks, securities, etc.
Tips Before Buying Real Estate in the Philippines
Here are tips a buyer must remember before buying any property in the
Philippines, specially if you are buying a single property from an individual:
1. Make sure the "Transfer Certificate of Title" is authentic. The easiest way
to check if the title to the property you are buying is authentic is by getting
"Certified True Copy" of the title from the Register of Deeds. This office is
usually located at the city or municipal hall where the property is located.
Ask the seller of the property for a photocopy of the title -you will need the
title number and the name of the owner to get a certified true copy of the
title from the Register of Deeds.
2. Verify that title is clean - meaning the property is not mortgaged (no liens
& encumbrances on the property). You can see that at the back of the title
with the heading "Encumbrances". This page must be empty if you are told
that the title is "clean". But sometimes the space for the technical
description of the property on the front page of the title is not enough and
the description of the property is continued on the "Encumbrances" page,
this is of course all right.
3. Make sure that the land described on the title is really the land that you
are buying. You can validate this at the Register of Deeds or by hiring a
private land surveyor or a geodetic engineer. Land titles don't have any
street name and number to pin point a property, it is a must to confirm that
the actual property you are buying matches the technical description on
the Transfer Certificate of Title.
4. Make sure that the sellers are the real owners. If you are buying from an
individual property owner, ask for identification papers like passport or
driver's license, it is also a good idea to talk to the neighbors or the
Barangay Captain to confirm the identity of the sellers (you might as well
ask some history of the property).
5. Confirm that the yearly real estate taxes are paid. Ask for certified true
copies of the Tax Declaration and original Tax Receipts to confirm that real
estate tax payments are up to date.
If the above check list is in order, it is generally safe to proceed with the
purchase of real estate in the Philippines.
General Real Estate Information
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.
Requirements:
• 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.
Guide when Buying real Estate in the Philippines
This is the standard sharing of expenses between the buyer and the seller
when transferring the real estate property title (TCT - Transfer Certificate of
Title or CCT - Condominium Certificate of Title) to a new owner:
The SELLER pays for the:
• Capital Gains Tax equivalent to 6% of the selling price on the Deed of
Sale or the zonal value, whichever is higher. (Withholding Tax if the seller is
a corporation)
• Unpaid real estate taxes due (if any).
• Agent / Broker's commission.
The BUYER pays for the cost of Registration:
• Documentary Stamp Tax - 1.5% of the selling price or zonal value or
fair market value, which ever is higher.
• Transfer Tax - 0.5% of the selling price, or zonal value or fair market
value, which ever is higher.
• Registration Fee - 0.25% of the selling price, or zonal value or fair
market value, which ever is higher.
• Incidental and miscellaneous expenses incurred during the
registration process.
The above sharing of expenses is the standard practice in the Philippines.
However, buyers and sellers can mutually agree on other terms as long as
it is done during the negotiation period (before the signing of the "Deed of
Sale").
The "Deed of Sale" or "Deed of Absolute Sale" is the document showing legal
transfer of real estate property ownership. The deed of sale is then taken to
the Registry of Deeds to be officially recorded after paying the documentary
stamp, transfer tax and registration fees. Always verify from the Registry of
Deeds the authenticity of a Transfer Certificate of Title before buying a
property. If the seller only has a tax declaration, be extra cautious and
check with neighbours, the Barangay captain or anyone in the know in the
community to verify the seller/owner's true identity and the property's
history.
Your Agent / Broker will usually do the registration process (sometimes for
a fee), however, all government , taxes, transfer fees and incidental or
miscellaneous expenses will be shouldered by the buyer.
Documents needed when transferring the title (TCT or CCT) to the new
owner:
• Certified true copy of the title
• Copies of the Deed of Absolute Sale
• Latest tax declaration of the property
• Certificate from the Bureau of Internal Revenue that the capital gains
tax and documentary stamps have been paid
• Receipt of payment of the transfer tax and registration fees
An adapted form of the "Torrens" system of land registration is used in the
Philippines. The system was adapted to assure a buyer that if he buys a
land covered by an Original Certificate of Title (OCT) or the Transfer
Certificate of Title (TCT) issued by the Registry of Deeds, the same will be
absolute, indefeasible and imprescriptible.
| General Real Estate Guide in the Philippines Foreigner's Guide |
| Richtlijnen voor het kopen van vastgoed in de Filippijnen |
