Filipino Real Estate Shenanigans: Volume 1
expats 30-12-2025
The Non-Negotiable Rule (Start Here)
Foreigners cannot own land in the Philippines.
This is constitutional—see Article XII, Section 7. No contract, side letter, handshake, or “don’t worry about it” changes that. See below.
If your country had been occupied for 400 years, you’d be sensitive to foreigners owning anything within your borders as well.
Everything that follows is about lawful alternatives.
1. Condominium Ownership (The Cleanest Option)
What’s allowed
Foreigners may own condominium units, provided:
- Foreign ownership in the building does not exceed 40%
- You own the unit, not the land
- The condo corporation remains majority Filipino-owned
Pros:
- Direct ownership
- Title in your name
- Bankable and sellable
- No nominee risk
Cons:
- Limited to condo developments
- Rural areas often have none
- HOA politics still apply
Best for: Urban living, low drama, resale value.
2. Long-Term Lease of Land (Common & Legal)
Foreigners may lease land:
- Up to 25 years
- Renewable once for another 25 years
- Total: 50 years
You may:
- Build a house on the leased land
- Own the structure (not the land)
- Register the lease with the Registry of Deeds
Key points:
- Lease must be properly drafted
- Renewal is an option, not automatic unless written
- Improvements should be contractually protected
Pros:
- Explicitly legal
- Suitable for rural areas
- Predictable if structured correctly
Cons:
- You never own the land
- Requires competent legal drafting (often missing)
Best for: Rural living, long-term residence, retirees who value legality over fantasy.
This is what I am doing in the rural Philippines.
3. Ownership Through a Philippine Corporation (Advanced, High Discipline)
Foreigners may own land through a corporation only if:
- The corporation is at least 60% Filipino-owned
- Foreign ownership is 40% or less
- Control mechanisms are lawful
Reality check:
- You do not own the land personally
- You own shares, not dirt
- Filipino shareholders must be real, not paper (skip this, you’ll find a court taking things away from you).
Risks:
- Dummy arrangements are illegal
- Side agreements can void everything
- Courts side with constitutional ownership, not contracts
Pros:
- Allows business use
- Can hold larger properties
- Recognized structure
Cons:
- Requires trusted Filipino partners
- Ongoing compliance
- Higher legal and accounting costs
Best for: Legitimate businesses, not personal homes unless you enjoy complexity.
4. Marriage to a Filipino Citizen (Most Abused, Least Understood)
Marriage does not grant land ownership.
What it does allow:
- Land titled in the Filipino spouse’s name
- Foreign spouse may have usufruct or use rights
- Inheritance rights are limited
Risks:
- Title is not yours
- Divorce (outside PH) doesn’t protect you
- Death creates complex succession issues
Best practice:
- Prenuptial agreements
- Clear estate planning
- Registered usufruct—I had to look that one up too—where appropriate
Best for: Couples who plan carefully and trust—but still document.
5. Special Visa / Investor Routes (Limited Scope)
Some visas (e.g., SIRV) allow investment in:
- Condos
- Corporations
- Approved developments
They do not override land ownership restrictions.
If someone says a visa lets you own land directly—walk away.
What Not To Do (This Is Where Foreigners Get Burned)
- ❌ Nominee ownership (“It’s in my girlfriend’s name, but it’s mine”)
- ❌ Side agreements contradicting title
- ❌ Undocumented cash purchases
- ❌ Verbal promises about renewal
- ❌ “Everyone does it” logic
Courts enforce titles, not feelings.
Practical Strategy Matrix
| Goal | Best Option |
|---|---|
| Urban living | Condominium |
| Rural house | Long-term lease |
| Business property | PH corporation |
| Family home | Filipino spouse + planning |
| Zero risk tolerance | Condo or lease only |
Summary
Foreign land ownership in the Philippines is:
- Prohibited
- Enforced
- Predictable if respected
Smart foreigners don’t fight the system—they structure around it legally.
What Article XII, Section 7 Actually Means (Plain English)
Foreigners are not qualified to acquire or hold land of the public domain.
Therefore, private land cannot be transferred to foreigners.
The only exception is hereditary succession (i.e., inheriting from a Filipino spouse or parent), and even that is narrowly interpreted.
This section is the constitutional backbone behind:
- The Civil Code
- The Public Land Act
- Supreme Court rulings invalidating nominee arrangements
No statute, contract, or local practice can override it.
Key Clarifications
1. “Private lands” includes:
- Titled residential land
- Agricultural land
- Commercial land
2. “Corporations qualified” means:
- At least 60% Filipino-owned
Any attempt to fake this (dummy shareholders) is illegal and void.
3. Hereditary succession does not mean:
- Buying land
- Receiving land as a gift
- Being named in a will contrary to law
It generally applies when:
- A Filipino spouse dies
- The foreign spouse inherits by operation of law, not by sale
Why Courts Are Brutal About This
Philippine courts consistently rule that:
- The Constitution overrides contracts
- Illegal transfers are void from the beginning
- Foreigners lose the land and often the money
There is no “good faith purchaser” defense for foreigners.
Bottom Line
If someone tells you:
- “There’s a workaround”
They are either:
- Ignorant
- Lying
- About to make you poorer
Article XII, Section 7 is the wall.
Everything else is just scaffolding around it.
Thinking of Buying Real Estate In the Philippines? Or, Moving Here?
Online communities are helpful for general questions. For anything important, you still need accurate, professional, and updated information. E636 Expat Services helps foreigners with:
- Residency and long term visas
- Bank account opening
- Health insurance guidance
- Real estate assistance
- Business setup
- Retirement planning
- A smooth and secure transition into life in the Philippines
If you want to move with confidence instead of relying on random comments online, we can guide you every step of the way.
Book a consultation with E636 and start your journey the right way.
