How to Buy a Property in the Philippines: A Guide for Foreigners

Investing in the Philippines, Real Estate Law and Practice

The Philippines is one of the most popular retirement destinations in the world. And that comes as no surprise. The country has some of the most stunning destinations for exploration, from sunny beaches to cool mountains and everything in between. 

The island country is also home to the world’s happiest and friendliest people. Wherever you go, you will meet a stranger with a smile, ready to be your pal. When it comes to food, you can easily satiate your gastronomic cravings with the local recipes and delicacies of the archipelago’s more than 7,000 islands. The variety of dishes to tickle your palate will amaze you for sure.

All these make the Philippines an ideal affordable retirement destination. A life of comfort on these islands won’t quickly deplete your retirement funds. This is one reason many foreigners are retiring in this country dubbed as the “Pearl of the Orient Seas.” Add the fact that the country has a flourishing real estate market.

The visual guide below will serve as a guide for foreigners looking to retire in the country. It presents the steps on how to buy a property in the Philippines, covering everything you need to know when purchasing a property in the country.  

5 Things to Know When Buying a Property in the Philippines

There are certain considerations you need to understand when purchasing a property in the Philippines. Here are some of them.

1. You can own land under certain circumstances

The Philippine Constitution restricts land ownership in the Philippines to Filipino citizens. To get around that limitation, you may opt for these arrangements:

  • Long-term lease: The Investors’ Lease Act of the Philippines allows foreigners to lease property for up to 50 years. Upon the initial agreement’s expiration, the lessee has an option to renew the lease for another 25 years. 
  • Co-ownership: You can own up to 40% of the capital stock in a real estate property under the Foreign Investments Act.
  • Marriage with a Filipino citizen: Your Filipino spouse may purchase the property on your behalf. While your name won’t appear in the land title, it may be included in the purchase contract.

2. You can legally own a residence

When you buy a house in the Philippines, you are granted legal rights to the structure. However, you do not technically own the land on which it is built since Philippine laws prohibit foreigners from owning land in the country. 

If you decide to surrender the property in the future, you will need a special power of attorney to transfer the land title from the original seller to your buyer.

3. You are allowed to inherit property in the Philippines

There is an exception to the rule prohibiting foreigners from acquiring land in the Philippines. Under the Philippine Constitution, foreigners can own land through intestate succession. 

If a Filipino landowner passes away without leaving a will, their spouse (Filipino or foreigner) and children will automatically inherit the properties left. If you’re married to a Filipino, you are automatically a compulsory heir, which will allow you to inherit properties in case of your spouse’s death.

4. If you are a dual citizen, you may own real estate property in the Philippines

The Philippines recognizes dual citizenship when it comes to property ownership.  If you possess dual citizenship, you are afforded the same rights as Filipinos. Thus, you can participate in the country’s real estate market without restrictions.

5. You can own up to 40% of the total units in a condominium

If you’re looking to invest in a condominium project in the Philippines, you are allowed to do so. However, you can only acquire up to 40% of the units or capital stock as provided in the Philippine Condominium Act.

How to Own a Property in the Philippines: A Step-by-Step Guide

After understanding how property ownership in the Philippines works for foreigners, let’s take a look at the process of acquiring a property in the country.

1. Secure a special visa 

The Special Resident Retiree’s Visa (SRRV) is a non-immigrant visa issued to foreign nationals who want to retire in the Philippines or stay in the country indefinitely. The visa comes with privileges and benefits, including the following:

  • Indefinite stay in the Philippines with multiple-entry and exit privileges
  • Exemption from:
  • Customs duties and taxes for one-time importation of household goods and personal effects worth up to US$7,000.00 
  • Pension and annuity taxes 
  • Travel tax (if the retiree has not stayed in the Philippines for more than one year from the last date of his/her entry)
  • Philippine Bureau of Immigration ACR-I Card (Annual Report)
  • Student Visa or Study Permit
  • Discount privileges from accredited merchant partners
  • Philippine Health Insurance Corporation benefits 
  • Free assistance in transacting with other government agencies

The Philippine government offers five different visa programs, and foreign retirees can choose from these options depending on their retirement status.  

To secure an SRRV, applicants need to file an application with the Philippine Retirement Authority (PRA). Upon receipt of the documentary requirements, the PRA will evaluate the application within seven to ten working days. Once processed, the application will either be approved or denied by the Bureau of Immigration.

The SRRV has no expiration, and the holder may reside in the Philippines without securing extensions of his or her stay from the Bureau of Immigration.

2. Research areas with a considerable number of foreign residents

In this regard, you can’t go wrong with major cities such as Makati, Pasig, and Taguig. Or you can go straight to tourist destinations such as the islands of Boracay, Bohol, or Siargao. These areas have thriving expat neighborhoods, allowing you to have instant communities while helping you acclimate to the Filipino culture faster.

3. Check out online property listing platforms

Checking out real estate listings allows you to compare current market prices. And since these listings come with images, you can better gauge if a particular property fits your needs aesthetic-wise. Some online platforms even offer loan calculations to help you assess how much you need to push through with a purchase.

4. Work with a real estate broker

A real estate broker knows the ins and outs of the market. They can advise you on the best deals to consider, including ideal locations and even investment opportunities. By working with an expert broker, you can get the best out of your purchase.

5. Evaluate the property

It’s not wise to purchase the first property that catches your fancy. Conduct a thorough evaluation first. 

You can start by checking the structure’s credibility. Then, assess the neighborhood. You want to sign above the dotted line only when you’re completely certain that the purchase is worth your retirement funds.

6. Consider the fees and taxes

On top of the property’s market value, you also have to account for other costs that come with the purchase. These include the following: notarial fees, registration costs, transfer tax, and documentary stamp tax, among others.

Be sure to factor these expenses into your budget from the get-go to have an idea of the overall cost of your purchase.

7. Familiarize yourself with the neighborhood or building rules

When buying a property, it’s important to familiarize yourself with the neighborhood or building rules. But before doing so, check if the regulations align with your lifestyle and priorities. If it’s a condominium, evaluate if you’re good with the building restrictions. You do not want to get caught off-guard by rules because you failed to review crucial details in the contract.

8. Consult a lawyer

A real estate lawyer can orient you on the country’s laws regarding property ownership involving foreigners. They can also acquaint you with your rights as a resident alien. Moreover, they can draft contracts for you and notarize documents needed for the purchase. With a real estate lawyer on your side, you can rest assured your rights are protected while living in the Philippines.

Retire in Style

Imagine yourself on a pristine island sipping your favorite cocktail, without a care in the world. Wouldn’t that be awesome? And that paradise doesn’t have to cost you an arm and a leg, too. 

This guide on how to buy a property in the Philippines might just be the start of your journey toward retiring in style and comfort.

Now that you have a good grasp of how the process works, the next step is to reach out to a real estate broker in the Philippines. Contact RE/MAX Gold today for a free consultation!

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