PH Real Estate - Advantages and Disadvantages of Foreign Property Ownership in the Philippines

Are you a foreigner who wants to buy a real estate property in the Philippines? Do you want to invest in properties in the country? If your answer is yes, continue reading to learn more. Whether you want to reside or invest in the country, the benefits of owning some properties can give you profitable earnings in the future. But first, you have to qualify as an investor or home owner.

The Philippine government has allowed foreigners to purchase condo units, as long as your property does not exceed more than 40% of the total property. You can buy a house, as well, but not the land in which these properties stand on. The land can be leased for 50 years, and then renewable thereafter. If you’re married to a Filipino, your spouse can buy the land under his/her name. You can acquire land through corporations too. 

However, your purchased property must not be more than 40% of the corporation’s properties. For Filipinos, who have acquired a foreign citizenship, they can own 1,000 square meters of a residential lot, or 1 hectare of farm land.

If you're a holder of a Special Resident Retiree’s Visa (SRRV), you are allowed to buy a house and lot, a condo unit or lease a piece of land. You can also reside in the country permanently. Along with these, you have a non-immigrant resident visa, coupled with zero travel taxes and a multiple-entry passport.

Aside from the specific cases mentioned above, as a general rule, foreigners are not entitled to own land in the Philippines. 

Based on these cases, what are the benefits of foreign property ownership in the Philippines?

Advantages of foreign property ownership :

1. The property can provide a monthly income.

When you rent out your house, it can provide you a monthly income. You simply sit and wait for the money to come in. Rent out the house to a responsible person, so that he will take care of the property well. 

In the contract, include a clause, which states that any damage to the property not caused by inclement weather should be the renter’s responsibility to repair.

2. You can make the property your abode.

You can also decide to make the house your residence. Hence, you won’t have to pay for your monthly rent. 

3. You can flip the house and re-sell.

You could earn extra cash by renovating the house to a more modern design and then selling it at a higher price. 

4. The house can serve as your vacation home.

The house would be a wonderful vacation house for you and your family, whenever you want to stay in the country. If this is your purpose, you should choose a house located in cities where there are various tourists’ spots.  Condos located in island and holiday resorts are best for this purpose.

5. Purchase the land through a corporation

You can also purchase the land where the property stands through a corporation, and sell it later at a higher price.

Disadvantages of foreign property ownership :

1. There are limits to what you can own. 

As explained earlier, you can own a house or a condo unit but you cannot own the land the house or condo stands on. In condos, you cannot own more than 40% of the property.

Even in business or investments, 60% must be owned by a Filipino or Filipinos, and 40% can be allowed for you.

2. You cannot buy land by yourself

You cannot buy land under your name. There were several recommendations by lawmakers to change the law, but to no avail. The law remains unchanged.

3. You may have to stay in the country to monitor your properties.

A trusted caretaker is needed to monitor your properties, thus when you cannot find someone you trust, you may have to stay in the country to do it yourself.

4. Caps on percent of property that you could own

You cannot go full blast on your investment on real estate properties because of the caps on how many percent should you own (only 40%).

These are the advantages and disadvantages of foreign property ownership in the Philippines. There are exceptions to the rules that you may want to explore. 

Here are tips on buying a property in the Philippines :

• Buy properties in expat-areas where you can quickly connect with other foreigners.
  
  
• If you have plans of residing permanently, it’s recommended that you apply for an SRRV. This way you can have more privileges.
  
  
• Consult a competent, legitimate and trusted broker or agent. How can you do this? You can search online and read customer reviews about the broker/agent.
  
  
• Verify if the title is clean. The property must not have been used as collateral to loans. While verifying the title, you must also verify if the name on the title is the actual owner.
  
  
• Know that there are property taxes that you have to pay. There may also be some hidden charges that the broker didn’t tell you.
  
  
• Consult a lawyer for the finalization of the Deed of Sale between you and the seller. Ascertain that any payment you have given is duly acknowledged and a BIR stamped official receipt is given.
  
  
• Before signing any document, read carefully first. The assistance of a lawyer is crucial in this process.

Conclusion

Owning a property in the Philippines can be a boon and a bane. You will have to know how to go about managing your properties to turn them into an advantage. 

It’s advisable that you have to learn first about how real estate property is managed in the Philippines before you attempt to invest or buy a house.

On the lighter side, you may find your true love here in the Philippines, and marrying that person would be beneficial for you. Doing real estate business together with your spouse could be fun and advantageous for you.

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