Philippines Property what are the rules for foreign ownership?
Many of us have the dream of retiring in the Philippines to enjoy what this beautiful country has to offer.
As a former American colony, it can be said that the country is Americanized whilst still retaining some of the values and traditions that we find so exotic in an Asian country. Thus, it is not surprising that many foreigners find the Philippines the ideal place for retirement.
Naturally after arriving in this country, one of the first things to do is to look for a place to stay. For the short term, there is always the option to rent. However, once you settle down, you would want to have something more permanent like leasing or purchasing a property.
Do I rent or purchase Philippines Property?
Although this country welcomes visitors to its shore, the Philippines place restrictions on foreigners with regard to purchasing property.
In general, rental is the easiest and hassle free option for a foreigner to get a place to stay. Like most places in the world, you can rent an apartment, house or condominium through a real estate agent.
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Alternatively, you can choose to scout around the various subdivisions with your Filipino partner for Philippines property. It isn’t too difficult to find a “For Rent” sign outside a vacant property with the landlords contact number. Depending on the landlord, you will need to pay 2 or 3 months rental deposit together with one month rental paid in advance.
However, the hassles begin once you decide to settle for something more permanent. The problem lies in the fact that foreigners are not permitted by law to own any private land in the Philippines.
And if you are thinking of purchasing any property under your Filipina partner’s name, you might seriously want to reconsider that option. Never forget that any relationship has its ups and downs. When you are already middle aged and have pulled up your roots from your own country, you cannot afford to risk everything just on the word of another person.
Nevertheless, if you still decided to take this route towards acquiring Philippines property, ensure that you draw up another contract with your Filipina that is witnessed by your lawyer that expressly forbids your partner from doing anything with the property without your consent.
There are also several options that you can pursue to get around the restriction regarding land ownership by foreigners.
The simplest way for a foreigner in the Philippines to own property is through indirect ownership. Although you cannot own land, you can purchase up to 40% equity in a domestic company that owns land. Thus, this allows you to purchase a condominium unit provided that the foreign equity participation in the condominium company has not reached 40%.
With respect to land, although the law does not permit you to own any land, you can still lease land that a house is built on for a period of 50 years and can be renewable for another 25 years after the initial lease.
The law in the Philippines does not prevent you from owning the house that is on the leased land.
Philippines property prices are extremely low by western standards. There is also a good selection of properties in both the cities and coastal rural areas.
High end studios in Manila start from around 2.5 million pesos while a hectare sized farm in the Batangas region can cost around the same amount as well.
Just remember, when dealing with property leasing or purchases in the Philippines is not straight forward. Although the euphoria of settling down might be pleasantly overwhelming, you are highly recommended to educate yourself with regards to property ownership before you decide to go house hunting.
A great resource is the ebook Philippines Property Primer. It is s must read for anyone contemplating leasing, renting, buying and or selling Philippines property.
Have you purchased, leased or sold property in the Philippines?
What was your experience like? Can you share your tip on what to look for when purchasing, leasing or selling Philippines Property with everyone!
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* How did you fix them?
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