Buying Property in The Philippines

1. Affordable Prices Compared to Other Countries: Compared to countries like the U.S. or certain parts of Europe, real estate in the Philippines can offer relatively affordable options, especially when purchasing land or properties outside major cities like Manila. This makes it an appealing option for those looking for value for money.

2. Strong Economic Growth: The Philippines has seen consistent economic growth over the years, and it is considered one of the fastest-growing economies in Asia. A growing economy often leads to rising property values, making real estate a good long-term investment.

3. Growing Demand for Housing: The country has a young, growing population with increasing urbanization, which leads to a high demand for housing and commercial properties. This makes real estate in the Philippines an appealing option for developers and investors.

4. Tourism and Vacation Properties: The Philippines is known for its beautiful beaches, resorts, and vibrant culture, which attract millions of tourists each year. Investing in vacation rental properties or resorts can be a lucrative business, especially in tourist hotspots like Boracay, Palawan, and Cebu.

5. Retirement Destination: The Philippines is a popular retirement destination due to its low cost of living, warm climate, and English-speaking population. Foreign nationals can also take advantage of retirement visa programs that make it easy to invest in real estate for personal use.

6. High Rental Yields: The country offers attractive rental yields, especially in urban areas. With its increasing urban population, rental properties in cities like Manila, Makati, and Quezon City often provide solid returns on investment.

7. Capital Appreciation: Due to the growing economy and increasing infrastructure development (like the government’s Build, Build, Build program), properties in prime locations have seen significant capital appreciation. This makes real estate a promising long-term investment.

8. Investment in Infrastructure: The Philippines government is heavily investing in infrastructure development, including transportation, airports, and roads, which increases connectivity and accessibility, thus boosting real estate value.

9. Foreign Ownership Regulations: While foreign nationals are generally not allowed to own land in the Philippines, they can own properties like condominiums (as long as foreign ownership in a building doesn’t exceed 40%). This makes it possible for foreigners to buy real estate, albeit with some restrictions.

10. Diversification of Investment Portfolio: For international investors, diversifying their portfolio into foreign real estate, such as in the Philippines, can reduce risk and offer a new revenue stream.

1. Understanding Foreign Ownership Laws

• Land Ownership: Foreigners are not allowed to own land in the Philippines. However, they can buy a house or building that is built on land, as long as the land itself is either leased or owned by a Filipino citizen.
• Condominium Ownership: Foreigners can own condominiums in the Philippines, provided that the foreign ownership in the condominium project does not exceed 40%. This means that 60% of the units must be owned by Filipino citizens.
• Leasehold Option: Foreigners can lease land for up to 50 years, with an option to renew the lease for an additional 25 years. The house or building can be owned by the foreigner, but the land will remain leased from the Filipino owner.

2. The Steps to Buying Real Estate Property in the Philippines as a Foreigner

A. Research the Property

• Location: Determine the location and type of property you want to buy (e.g., residential home, condominium, etc.).
• Legal Check: Ensure that the property is legal for purchase by a foreigner. If you’re buying a house on land, confirm that the land is owned by a Filipino citizen.

B. Find a Real Estate Agent or Lawyer

• It’s highly recommended to hire a real estate agent who is familiar with the laws surrounding foreign ownership. A lawyer who specializes in real estate transactions in the Philippines can also help guide you through the legal process, especially if you are dealing with property titles, contracts, and potential issues with ownership.

C. Draft and Sign the Sale Agreement

• Once you’ve found the property, you and the seller will negotiate and sign a deed of sale. The deed will specify the agreed price, payment terms, and other details.
• Make sure to have the agreement checked by a legal professional to ensure it adheres to all laws and regulations.

D. Secure a Tax Identification Number (TIN)

• Before proceeding with the transaction, you’ll need to secure a Philippine Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR). This is required for any property transaction.

E. Payment and Transfer of Title

• Payment: You will pay for the property in full as agreed in the contract. The payment is typically done via bank transfer or check, and a portion of it might be done through a local escrow account to ensure security.
• Title Transfer: Once the payment is completed, the property title will be transferred to your name. If the property is a house on land, the land will still be owned by the Filipino seller, but you will have legal ownership of the house.

F. Register the Property

• You will need to have the transaction registered with the Registry of Deeds to officially transfer ownership. This involves paying for the necessary taxes and registration fees, which include:

  • Transfer Tax (usually 0.5% to 0.75% of the selling price or zonal value)
  • Documentary Stamp Tax (1.5% of the selling price)
  • Registration Fees (varies depending on the property’s value)

• Once the property is registered, the land title will be updated to reflect your name as the owner of the house or building.

3. Consider the Leasehold Option for Land

• Since foreigners can’t own land outright, one option is to lease land from a Filipino citizen. You can negotiate a long-term lease (up to 50 years, with a renewal option for 25 more years).
• The land lease agreement will need to be registered with the Registry of Deeds and followed by a notarized contract.

4. Foreign Buyer Restrictions to Keep in Mind

• Foreigners can only own 1 residential property for personal use in the Philippines.
• If you intend to buy a house and land through a leasehold agreement, it is important to work with a Filipino partner to make sure the contract is legally binding.
• You cannot directly sell land; however, if you sell the house or condominium, the new buyer must adhere to the same restrictions regarding foreign ownership.

5. Use of a Corporation

• In some cases, foreigners opt to form a corporation (with Filipino partners) to purchase land. The corporation can own land, but the foreign ownership in the corporation must not exceed 40%. This is a more complex legal avenue and requires professional legal and financial advice.

Overall, buying real estate in the Philippines presents various opportunities for personal, commercial, and investment purposes due to its growing economy, high demand for housing, and attractive returns.

UlistProperties is a real estate listing site that helps agents or owners list their real estate property from anywhere in the world, thus helping buyers choose a location, discover their next dream home and talk directly with the agent or owner.

Discover listings in major areas, or search for Philippines Beach Property For Sale.