Due to the growth of economy of the Philippines and its growing population as well, there are several foreign investors that ventured various businesses here because of the manpower our country can provide and low cost of starting up a small business.
Aside from the manpower and capabilities of Filipinos to bring word-class performance in dnon-Filipino originnon-Filipino originnon-Filipino originifferent work industries, the country’s undeniable beauty also enticed not only investors but foreigners to buy house, real estate in Philippines, own properties, and set up long time businesses here.
Now, here’s the big question:
As a Foreigner, can I buy a land in the Philippines?
According to the law, foreigners are not allowed to own a land in the Philippines.
Expatriates can’t own a land here in the Philippines but they can get it around by using long-leases. Also, these expats can buy a condo unit or a high-rise apartment, and houses like a town house but not the land it was built on. However, they can long lease the land for 50 years to own it and shall be renewed every 25 years.
What are the successful steps to legally buy a land or property in the Philippines?
There are several ways for a foreigner to either own or buy a land:
1. SRRV – The foreigner should apply for a Special Resident Retirement Visa that costs around $1500 for the application and $400 for annual renewal. This visa lets you have the benefits of a resident and you can also have your own business and properties in the country. Foreigners need to deposit an amount varying from $10, 000 and $50, 000. The amount depends on the foreigner’s age and the pension status because there are different types of SRRVs for this.
2. Through a company – Foreigners can buy a land or property through a company as long as 60% of the company is owned by Filipinos.
3. The foreigner can have a legal possession if the property was bought before the 1935 constitution and if the foreigner came from a non-Filipino origin but is entitled as the legal heir to a Filipino person who acquires the specific land.
4. If the foreigner married a Filipino, this foreigner can name the properties under the spouse’s name.
5. Foreigners can also live here for 10 years and become a Filipino citizen, which means they can buy any property they want to without any restrictions.
6. For former natural born citizens, ownership of an urban land is limited to 1,000 square meters and 1 hectare for rural land and should be exclusively used for residential purpose according to the Batas Pambansa Bilang 185.
7. According to the Dual Citizenship Law of 2003, all natural born Filipinos who eventually lost their citizenship as Filipino to another country because of naturalization can reclaim Filipino citizenship if he/she swear allegiance to the Philippines. After reclaiming citizenship as a Filipino, he/she is now considered a citizen and may own properties without any constraints.
What are the transaction fees?
As expats buying properties or real estate in the Philippines, you should foresee the following fees;
Capital Gains Tax – 6% of the residence’s sales price, zonal value or fair market value, whichever is highest. This transaction is paid by the seller, but there are instances that the buyer is the one who pays it.
Documentary Stamp Tax – 1.5% of the sales price, zonal value or fair market value, whichever is highest.
Transfer Tax – 0.5% to 0.75% of the sales price, zonal value or fair market value, whichever is highest.
Title Registration Fee – this varies depending to the published registration fee table; generally around 0.25% of the sales price.