Property Guide

housing price ceilings category for House and lot for sale in Subdivision

Buyer’s Guide

Buying real estate properties can be a stressful task since it involves a great deal of money, effort, trouble or difficulty. You will be meeting a complete stranger to bid, haggle, negotiate, pay, accept documents, have it process, pay taxes, transfer it to your name before you will have a peace of mind. For majority of buyers, real estate is the single biggest expense that they could ever have in their lifetime and the most leveraged financial investment. Paying terms can be as long as 30 years which is considerably equivalents to one’s half-life.

Buyer is highly advised to get the services of a professional in avoiding troublesome delay, wasted time and financial loss. Getting the services of a licensed real estate broker, you will be protected by the law under Republic Act 9646 – an act regulating the practice of real estate service in the Philippines. If your broker will not work for you in accordance of the law you may file complaint for damages and revocation of their license.

There’s no unified law with regards to property ownership and real estate transactions in the country. It is complex and knowing the limitations and regulation is quite challenging and difficult.

Who could own real estate in the Philippines?

Filipinos and corporations that are considered Philippine nationals, as expressed in the 1987 Philippine constitution, exclusively holds the right in owning private lands in the Philippines. It can lease of not more than five hundred (500) hectares or may acquire not more than twelve (12) hectares through purchase, homestead or grant.

Natural born Filipinos who had renounced their citizenship and wishes to purchase private lands are guided by the following laws:

Batasang Pambansa 185 (Applies to acquisition of land for purposes of residence)

Former natural born Filipinos who have become foreign citizens may still buy private lands for residential purpose - up to 1,000 square meters if situated in urban areas or one (1) hectare if situated in rural areas.

Provisions under Republic Act 7042 as amended by Republic Act 8179 (Applies to acquisition of land for purposes of business or commerce)

With increase of foreign investment in mind, lawmakers crafted this law to encourage former natural born Filipinos to invest and have their business’ here in the country. For business or other purpose they could acquire up to 5,000 square meters if located in urban areas or three hectares if in rural areas.

These laws may be superceded by having dual citizenship under Republic Act 9225 – Citizenship Retention and Re-acquisition Act of 2003. By paying required fees and taking the oath of allegiance before the Bureau of Immigration Officers or authorized officials, all rights as a Filipino Citizen will revert back.

Foreign nationals may indirectly own private lands by taking a minority interest (up to the extent of 40%) in corporation that are considered Philippine national. A corporation is considered a Philippine national if it is owned by Filipinos of at least 60%, as a Filipino corporation it can then buy private lands.

Foreign nationals and foreign companies may own condominium units in condominium projects that is registered with the Housing and Land Use Regulatory Board (HLURB). Subject to the provisions of the law under Republic Act 4726 - “The Condominium Act”, wherein the foreign nationals can own condominium units provided that total saleable units is owned by Filipinos of at least 60% and foreign nationals will not exceed 40%.

Foreign nationals and foreign companies may opt to lease private lands. The Philippine constitution allowed foreign nationals to lease lands for a term of 25 years, renewable for another 25 years maximum. This was updated by another law Republic Act 7652 – “Investor’s Lease Act”, this law allows the long term lease of private lands to foreign investors. This was made to increase foreign investments in areas of manufacturing, tourism and other productive endeavours. It then allowed the foreign investor lease term of 50 years for business purposes (not for residential), renewable for another term of 25 years maximum. One of the requirements is to be registered with the Department of Trade and Industry (DTI) who will then monitor and assess if the foreign investor will be engaging in business.

Foreign national who marries a Filipino and buys private land is a common practice. The name of the foreign national is reflected in the transfer certificate of title but holds no direct right to the private land, if the marriage turn sour and lead to a divorce or separation, the foreign national can have no right to their property. It can even be transferred or put to sale by the Filipino spouse without the consent of the foreign national. Indirectly, if the Filipino spouse dies and has no legal heir or natural heir then the private land and all its rights will be transferred to the foreign national as a hereditary succession.

Buying from private owners

There is much claim that buying properties must be dealt with caution. Philippines has no title insurance to protect buyers of their investment against spurious and fake titles, double sale and other frauds. There is a legal remedy through the courts which would take too much time and take more of your money so CAVEAT EMPTOR – let the buyer beware.

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