Are you interested in owning land, now that property prices are on an upswing again? Are you a natural-born Filipino citizen who has become a foreign national but still interested to acquire that piece of property you have been eyeing for the longest time?
The Philippines has very stringent laws for owning land in the country, starting with the 1987 Philippine Constitution, the supreme law of the country. Specific provisions of Article 12 on National Economy and Patrimony states that:
“Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
Section 8. Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.”
General rule
Let us qualify who are allowed to own land in the Philippines – only Filipino citizens are allowed to own land in the Philippines. Filipinos who are married to aliens but retain their Filipino citizenship may also own land in the country.
In case of a corporation or association that wishes to acquire and own land, at least 60 percent of the capital stocks of the corporation or association should be owned by Filipinos. However, it is not as simple as that. Several layers or levels of validations are needed to ensure that the corporation and its shareholders are indeed majority owned by Filipinos.
Meanwhile, Section 3, Article 12 of the 1987 Philippine Constitution states that: “Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease no more than five hundred hectares, or acquire no more than twelve hectares thereof, by purchase, homestead, or grant.”
Dual citizens
Dual citizens refer to Filipinos who lost their citizenship through naturalization to become foreign nationals, but eventually decided to re-acquire or retain Philippine citizenship. Pursuant to Republic Act No. 9225 (Citizenship Retention and Re-acquisition Act of 2003), they can also own land in the Philippines.
Exceptions
The current Constitution and existing laws do not allow foreigners to directly own land in the Philippines except for the following cases:
– Foreigners who acquired or owned land prior to the enactment of the 1935 Philippine Constitution can continue to retain their land ownership.
– Filipinos who changed nationality may retain their ownership of land provided they acquired the property prior to the change in citizenship.
– Foreign nationals, by reason of heredity/intestate succession or inheritance from Filipino citizen parent-land owners, who at the time of their death, did not leave a will.
Former natural-born Filipinos who do not avail of Dual Citizenship, provided the amount of land are within prescribed limits, such as for residential purpose – up to 1,000 sqm. of urban land or one hectare of rural land (Batas Pambansa Blg. 185), and for business purpose at maximum of 5,000 sqm. of urban land or three hectares of rural land (Republic Act No. 8179). If both spouses are former natural-born Filipinos, the maximum allowable area is per the same limits. Moreover, a person who had acquired urban land for a particular purpose, cannot acquire rural land for the same purpose, and vice versa. Additionally, only two lots can be acquired and it has to be located in different municipalities or cities.
Caveat
While a foreigner can own a condo unit provided that the condominium corporation’s foreign ownership does not exceed 40 percent, he/she cannot directly own land as stated above.
In order to go around the constitutional land ownership restriction, some foreigners purchase land and title it under the name of their Filipino spouse. They need to be aware that if they (the couple) are married, and the Filipino spouse dies ahead of the foreigner spouse, the foreigner spouse is allowed reasonable time to only dispose of the land and collect the sale proceeds, or the land will be passed on to the Filipino heirs and or relatives.
References used include the 1987 Philippine Constitution, Executive Order No. 209, as amended (The Family Code of the Philippines), RA No. 386, as amended (Civil Code of the Philippines), RA No. 9225 (Citizenship Retention and Re-acquisition Act of 2003), and “6 Ways Foreigners Can Own Land & Buy Real Estate in the Philippines” by James Ryan Jonas, in Real Estate Investing, April 7, 2019.
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Henry L. Yap is an architect, environmental planner, real estate practitioner and former professorial lecturer.
