Fundamentals Of Property Ownership 

• Fundamentals Of Property Ownership 
• Right to own
• Acquisition by a former natural-born Filipino citizen 
• Dual Citizens 
• Foreign Ownership as a Philippine Corporation
• Foreign Leasing of Philippine Real Estate Property

RIGHT TO OWN 

1. General Rule – Only Filipino Citizens and corporations or partnerships with at least 60% of the capital which is owned by Filipinos are entitled to acquire land in the Philippines. 

2.  As an 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 the 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 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 omission, she is deed to have renounced her Philippine citizenship) and may therefore acquire real estate in the Philippines. 

ACQUISITION BY FORMER NATURAL-BORN FILIPINO CITIZEN 

1.  Mode of acquisition 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 purposes –  1,000 square meters of urban land or one (1) hectare of rural land (BP 185) 
  b.. For business or other purposes – 5,000 square meters of urban land or three hectares of rural land. 

  “Business or other purposes” 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 the case of a 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 purposes, may acquire additional urban or rural land for residential purposes which, when added to that already owned by him shall not exceed the maximum area allowed by law. 

The same privilege 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 purposes shall be disqualified to acquire rural land for residential purposes and vice versa. The same rule applies to a transferee of land for business purposes.

Dual Citizens

• 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 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 in that country.

Note:  For former natural-born Filipino citizens, 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 private land, residential house and lot, and commercial building and lots, 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 [5] incorporators. Upon incorporation, the 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.