BATAS PAMBANSA BLG. 185 – AN ACT TO to determine how to proceed.

A major restriction in the law is

IMPLEMENT SECTION FIFTEEN OF ARTICLE XIV the restriction on the number of foreign members on the Board
OF THE CONSTITUTION AND FOR OTHER of Directors of a landholding company (which is limited to
PURPOSES 40% foreign participation). Another concern is the possible
forfeiture of the property if the provisions of the law is
Section 1. In implementation of Section fifteen of Article XIV breached.
of the Constitution, a natural-born citizen of the Philippines
who has lost his Philippine citizenship may be a transferee of Exceptions to the restriction on foreign acquisition of land in
private land, for use by him as his residence, subject to the the Philippines are the following:
provisions of this Act.
1. Acquisition before the 1935 Constitution
Sec. 2. Any natural-born citizen of the Philippines who has 2. Acquisition through hereditary succession if the foreigner is
lost his Philippine citizenship and who has the legal capacity a legal or natural heir
to enter into a contract under Philippine laws may be a 3. Purchase of not more than 40% interest in a condominium
transferee of a private land up to a maximum area of one project
thousand square meters, in the case of urban land, or one 4 Purchase by a former natural-born Filipino citizen subject to
hectare in the case of rural land, to be used by him as his the limitations prescribed by law (natural-born Filipinos who
residence. In the case of married couples, one of them may acquired foreign citizenship is entitled to own up to 5,000
avail of the privilege herein granted; Provided, That if both sq.m. of residential land, and 1 hectare of agricultural or farm
shall avail of the same, the total area acquired shall not exceed land).
the maximum herein fixed. 5. Filipinos who are married to aliens and able to retain their
Filipino citizenship (unless by their act or omission they have
In case the transferee already owns urban or rural lands for renounced their Filipino citizenship)
residential purposes, he shall still be entitled to be a transferee
of additional urban or rural lands for residential purposes Land Ownership as a Corporation
which, when added to those already owned by him, shall not Foreign nationals, expats or corporations may completely own
exceed the maximum areas herein authorized. a condominium or townhouse in the Philippines. To take
ownership of a private land, residential house and lot, and
Sec. 3. A transferee under this Act may acquire not more than commercial building and lot, they may set up a domestic
two lots which should be situated in different municipalities or corporation in the Philippines. This means that the corporation
cities anywhere in the Philippines; Provided, That the total owning the land has less than or up to 40% foreign equity and
area thereof shall not exceed one thousand square meters in is formed by 5-15 natural persons of legal age as
the case of urban lands or one hectare in the case of rural lands incorporators, the majority of which must be Philippine
for use by him as urban land shall be disqualified from residents.
acquiring acquiring rural land, and vice versa.
Leasing of Real Estate Property
Land Ownership and Property Acquisition in the Leasing land in the Philippines on a long-term basis is an
Philippines for Foreigners and Former Filipino Citizens option for foreigners, expats or foreign corporations with more
than 40% foreign equity. Under the Investor’s Lease Act of
In general, only Filipino citizens and corporations or the Philippines, they may enter into a lease agreement with
partnerships with least 60% of the shares are owned by Filipino landowners for an initial period of up to 50 years
Filipinos are entitled to own or acquire land in the Philippines. renewable once for an additional 25 years.
Foreigners or non-Philippine nationals may, however,
purchase condominiums, buildings, and enter into a long-term Owning Houses or Buildings
land lease. Foreign ownership of a house or building in the Philippines is
legal as long as the foreigner or expat does not own the land
For Foreigners on which the house was built.

Ownership of land in the Philippines is highly-regulated and Owning Condominiums or Townhouses

reserved for persons or entities legally defined as Philippine The Condominium Act of the Philippines (R.A. 4726)
nationals or Filipino citizens. For this purpose, a corporation expressly allows foreigners to acquire condominium units and
with 60% Filipino ownership is treated as a Philippine shares in condominium corporations up to 40% of the total and
national. outstanding capital stock of a Filipino-owned or controlled
condominium corporation.
Foreigners or expats interested in acquiring land or real
property through aggressive ownership structures must
consider the provisions of the Philippines’ Anti-Dummy Law
However, there are a very few single-detached homes or For Business/Commercial Use (RA 8179 – amended the
townhouses in the Philippines with condominium titles. Most Foreign Investment Act of 1991):
condominiums are high-rise buildings.
Up to 5,000 square meters of urban land
Being Married to a Filipino Citizen Up to three (3) hectares of rural land
If holding a title as an individual, a typical situation would be Real Estate Transaction Costs in the Philippines
that a foreigner married to a Filipino citizen would hold title in
the Filipino spouse’s name. The foreign spouse’s name cannot Purchases from Individuals
be on the Title but can be on the contract to buy the property.
In the event of the death of the Filipino spouse, the foreign Capital Gains Tax – 6% of actual sale price. This is paid by
spouse is allowed a reasonable amount of time to dispose of the seller but in some cases, the buyer might be expected to be
the property and collect the proceeds or the property will pass the one to pay. This percentage could differ if the property
to any Filipino heirs and/or relatives. assessed is being used by a business or is a title owned by a
corporation, in this case, the percentage is 7.5%.
For Former Natural-Born Filipino Citizens
Any natural-born Philippine citizen who has lost their Document Stamp Tax – 1.5% of the actual sale price. This is
Philippine citizenship may still own private land in the paid by either the buyer or the seller upon agreement.
Philippines (up to a maximum area of 5,000 square meters in Normally, however, it is the buyer who shoulders the cost.
the case of rural land). In the case of married couples, the total
area that both couples are allowed to purchase should not Transfer Tax – 0.5% of the actual sale price
exceed the maximum area mentioned above. Registration Fee – 0.25% of the actual sale price

Former Filipino Citizens, Balikbayans, and OFWs SEC. 10. Other Rights of Natural Born Citizen Pursuant to the
Former natural-born Filipinos who are now naturalized Provisions of Article XII, Section 8 of the Constitution. - Any
citizens of another country can buy and register, under their natural born citizen who has lost his Philippine citizenship and
own name, land in the Philippines (but with limitations in land who has the legal capacity to enter into a contract under
area). However, those who avail of the Dual Citizenship Law Philippine laws may be a transferee of a private land up to a
in the Philippines can buy as much as any other Filipino maximum area of five thousand (5,000) square meters in the
citizen. case of urban land or three (3) hectares in the case of rural
land to be used by him for business or other purposes. In the
Under the Dual Citizenship Law of 2003 (RA 9225), former case of married couples, one of them may avail of the
Filipinos who became naturalized citizens of foreign countries privilege herein granted: Provided, that if both shall avail of
are deemed not to have lost their Philippine citizenship, thus the same, the total area acquired shall not exceed the
enabling them to enjoy all the rights and privileges of a maximum herein fixed.
Filipino citizen regarding land ownership in the Philippines.
In the case the transferee already owns urban or rural land for
How to Gain Dual Citizenship business or other purposes, he shall still be entitled to be a
If you are in the Philippines, file a Petition for Dual transferee of additional urban or rural land for business or
Citizenship and Issuance of Identification Certificate (pursuant other purposes which when added to those already owned by
to RA 9225) at the Bureau of Immigration (BI) and for the him shall not exceed the maximum areas herein authorized.
cancellation of your alien certificate of registration.
A transferee under this Act may acquire not more than two (2)
Those who are not BI-registered and overseas should file the lots which should be situated in different municipalities or
petition at the nearest embassy or consulate. cities anywhere in the Philippines: Provided, That the total
land area thereof shall not exceed five thousand (5,000) square
If a former Filipino who is now a naturalized citizen of a meters in the case of urban land or three (3) hectares in the
foreign country does not want to avail of the Dual Citizen Law case of rural land for use by him for business or other
in the Philippines, he or she can still acquire land based on purposes. A transferee who has already acquired urban land
Batas Pambansa (BP) 185 and RA 8179, but limited to the shall be disqualified from acquiring rural land and vice versa”.
following: (As amended by R.A. 8179)

For Residential Use (BP 185 – enacted in March 1982):

Up to 1,000 square meters of residential land

Up to one (1) hectare of agricultural of farmland