Property Ownership Requirements

What are my rights as a Filipino citizen to acquire and own real property in the Philippines?

Filipino citizens like you are entitled to acquire and own lands or real estate in the Philippines, whether private or public. This right is enshrined and guaranteed to citizens of the Philippines in the Philippine Constitution and other pertinent Philippine laws. (Article XII, National Economy and Patrimony).

On public lands ownership, the Constitution allows qualified Filipino citizens to acquire a maximum of 12 hectares of alienable lands of the public domain and 500 hectares through lease. Alienable lands of the public domain refer only to those agricultural lands which remain part of the government owned property (Note: Under the regalian doctrine all lands belong to the State) and have not been disposed through sale or grant. Modes of acquiring title to alienable lands of the public domain include sale, homestead patent, sales patent, free patent or through uninterrupted possession for a period of time under a claim of title.

This right to acquire and own includes the rights to possess, to use, to enjoy the fruits, to dispose or sell and to recover.

What are considered private lands?

Private lands are those presently owned by individuals, either Filipinos or foreigners, or corporations or association 60% of the capital of which is owned by citizens of the Philippines. These also include those lands of the public domain which have been acquired from the government by purchase or grant by qualified Filipino individuals as well as those which have been in the possession of the occupant and his predecessors-in-interest  since time immemorial.  Private lands may be in the nature of residential (lot, house & lot, condominium units, townhouses etc), commercial (lots, office buildings, commercial spaces etc.), industrial (warehouses, factories, plants, etc) and agricultural lands (ricelands, farm lands or estates, forest farms, etc.)

Are foreigners like our friend Peter Parker prohibited from owning real property in the Philippines?

No. Foreigners can also acquire or purchase real property in the Philippines but only under the following circumstances:

  1. Acquisition of real property by hereditary succession – Example: Peter Parker inherited the Philippine property (the property may have been acquired under the 1935 Philippine Constitution) from his relative.
  2. Acquisition of real property under the 1935 Philippine Constitution.
  3. Purchase of not more than 40% of the units in a condominium project in the Philippines.
  4. Purchase by former natural born Filipino citizens, subject to the requirements or limitations prescribed by law:
    • acquisition shall not exceed 1,000 square meters for urban land or 1 hectare for rural land to be used solely for residential purpose of the transferee (Batas Pambansa Blg. 185) (under the Foreign Investment Code, Republic Act 8179, 5,000 square meters for urban land or 3 hectares for rural land for business or other pusposes of the transferee);
    • In case of married spouses, one or both of them may avail of the privilege provided that the total area shall not exceed the maximum limit in paragraph i;
    • When the transferee already owns urban or rural lands for residential purpose, he shall be entitled to acquire additional urban or rural land for residential purpose which, when added to those already owned by him, shall not exceed the maximum area allowed by law.

If my daughter will marry Peter Parker who is a foreigner, can she still be allowed to acquire and own real property in the Philippines?

Under Philippine law a Filipina who marries an alien or foreigner retains her citizenship unless by her act or omission she is deemed under Philippine law to have renounced her Philippine citizenship. If your daughter has not renounced her Philippine citizenship (example through swearing allegiance to and becoming a citizen of her husband’s country) she is not prohibited from acquiring and owning real property in the Philippines.

However, under the Dual Citizenship Law of 2003, natural born citizens of the Philippines who have lost their Philippine citizenship by reason of their naturalization as citizens of another country may reacquire Philippine citizenship by swearing allegiance to the Philippine. Once they reacquired their Philippine citizenship, they can buy and own real property in the Philippines.

What basic qualifications should I possess aside from my Philippine citizenship in order for me to buy real property in the Philippines?

As a buyer, you have to enter into a sale agreement or contract with the seller of the real property. This requires three essential requisites to make the sale agreement valid and binding:

  1. consent of the contracting parties
  2. object certain which is the subject matter of the contract
  3. cause or consideration of the obligation which is established

Consent of the contracting parties is manifested when you agree to buy the X property of the seller and pay the agreed price and the seller agrees to deliver the X property (not the Y or Z property) to you upon receipt of the purchase price.

However, consent given by (a) unemancipated minor or those persons below 18 years old; or (b) insane or demented persons or deaf-mutes who do not know how to write makes the contract void (Art. 1327, New Civil Code). If the consent is given through mistake, violence, intimidation, undue influence or fraud, the contract will be voidable or valid until annulled (Art. 1330 NCC).

Object certain requires that the object must be licit (can be legally acquired) and at the same time determinate or at the very least capable of being made determinate without the necessity of a new and further agreement between the parties.

The Cause of the buyer is the acquisition of the X property which is the subject of the contract while the cause of the seller is the acceptance of the purchase price or the price certain in money.

What are my obligations as owner of real property in the Philippines?

The following are your obligations as owner of real property in the Philippines:

  1. Pay the annual Real Property Tax (RPT) and Special Education Fund Tax (SEFT) on  the property;
  2. Comply with the Building Code on its requirements of height, setback, materials specifications etc;
  3. Observe the Subdivision Regulations in case of subdivision projects such as requirements of open space, development specifications and completion;
  4. Comply with the Zoning regulations of a particular area such as restricting the use of a particular area for residential purpose and prohibiting its use for commercial or industrial use;
  5. Comply with the requirements of the Philippine laws on Eminent Domain, Escheat, Easement of Right of Way, taxation and other applicable laws on real estate;
  6. In case of condominium, unit owners are obliged to:
    • Pay RPT and SEFT on his unit
    • Share in RPT and SEFT on common area and land
    • Get insurance on the unit
    • Share in the payment of insurance premiun on the common areas
    • Comply with use restriction
    • Pay condominium and association dues and assessments.

What are the rights and restrictions of private corporations or associations organized under the Philippine laws in acquiring and owning real property in the Philippines?

Private Corporations or associations organized under the laws of the Philippines 60% of the capital of which is owned by Filipinos are entitled to acquire and own private lands in the Philippines. They may also hold alienable agricultural lands of the public domain only by lease for a period not to exceed 25 years renewable for not more than 25 years and not to exceed 1,000 hectares.

Such right to own or hold lands are subject to the following legal restrictions:

  1. Zoning Law – delineation of the particular uses of lands
  2. Subdivision Regulations – required for subdivision projects like open space requirement, development specification and completion period
  3. Building Code – regulations pertaining to height, setback, material specification etc.
  4. Power of Eminent Domain of the State – the power of the State to take private property for public use upon payment of just compensation
  5. Escheat -the reversion of the property to the State due to the intestate death (without will) of the owner without any heir
  6. Taxation – the power of the State to impose and collect tax and other charges on the real estate.

It is also subject to the following voluntary or contractual restrictions:

  1. Lease Contract – the temporary surrender of the rights to possess, use and enjoy in favor of another person who pays rent
  2. Right of Way Easement – the right given to an owner of an adjoining land to pass or have access thru another land
  3. Usufruct – transfer to another person of the right to enjoy the fruits of the propertyUse Restrictions in Subdivision contracts.