Monday, November 18, 2019

Fundamentals of Real Estate Ownership And FAQs in Philippine Properties

For most Filipinos (or even foreigners) to own their home in the country is the dream country. It brings a great fulfillment and satisfaction on investing a properties that can be used as an instrument for investment (for leasing / selling), for pleasure (vacation home) or just a plain home where you can enjoy one's company with one's own family.

What's the Difference of Leasehold and Freehold Properties

By definition, freehold properties are. There is an ownership of perpetuity to it. More over, a individual title of ownership will be issued to you through (transfer certificate of title, original certificate of title and condominium certificate of titles)

In Philippine settings, Freehold property ownership is applicable to Filipino citizens, however there are some limitation of ownership for some statures of laws for who have reacquired their Philippine citizenship (Philippine dual Citizenship law) or former Filipinos citizens. On the other hand, leasehold properties are  

Philippine Constitution and Legal Framework

Property rights are anchored on Philippine Constitution, Article XII, Section 1, Social Justice and Human Rights, which states: "The Congress shall give highest priority to the enactment and measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequities, and remove cultural inequities by equitably diffusing wealth and political power for the common good. 

Based on general rule, Only Filipino citizens and corporation at least sixty percent (60%) of the capital of which is owned by Filipinos are entitled to acquire and own the land in the Philippines. 

What Are Exceptions to General Rule of Philippine Property Ownership

The exceptions to the rule - alien acquisition of real estate in the Philippines is allowed in the following cases:

a.) Acquisition before the 1935 Constitution
b.) Acquisition thru hereditary succession thru a legal heir
c.) Purchase of not more than forty percent (40%) interest in a condominum project (R.A. 4726).
d.) Purchase of former natural born Filipino citizens subject to limitations prescribed by B.P.  185 ( residential lot) and R.A. 8179 (commercial lot). 

Disclosures or Notice of Information on Property For Sale

It is the responsibility of a seller (brokers, agents or even owners) to reveal information on the subject property before buying if it is a Freehold or Leasehold properties, If the property have encumbrances , lis pendes, adverse claims etc. are necessary for one to disclose by sellers / owners alike. This in turn could make aware of the possible outcome and lessen the trouble of going through the process.

Over a decade now we have collated the questions from our clients. Below are the Frequently Asked Questions (FAQs) from locals and foreigners alike.

Question: Can a Foreigner Own A Real Estate in the Philippines?

Yes, usually on a horizontal (house & lot with condominium certificate of title) or vertical project (residential condominium). However, foreign control or ownership is limited up to 40% only. This is allotted for foreign individuals or entities to own a property by major developers. Residential condominiums usually are formed through condominium corporations.  

Question: Can Former Filipino Citizens Own a Real Estate in the Philippines?

Yes, under the Philippine laws, they can own real estate properties but have limitations and restriction in purchasing a property. For residential purposes,  Batas Pambansa No. 185 defines  that a former Filipino citizen can up  1000 square meters in a urban areas and 1 hectare in rural / agricultural land. Republic Act 8170 on the other hand describes that it will used for business purpose - 5,000 square meters of urban land or three (3) hectares of rural land. The "business purpose" refers to the use of land primarily, directly and actually in the conduct of business or commercial activities in the broad areas of agriculture, industry and services, including the lease of land but excluding the buying and selling thereof.

Question: Can Filipino with Dual Citizenship Own a Real Estate in the Philippines?

Yes, similar to former Filipinos they have limitation on acquiring a property. In the case of inheritance of property from Filipinos parents, they are entitled to specific laws.

Question: Can Filipino Citizens married to Foreign Spouses Own a Property in the Philippines?

Yes, for land it will named after your Filipino citizen spouse (husband / wife). However, on residential condominiums a foreign owner can own the property by itself as stated on question no. 1 under Republic Act 4726.

How Can We Help You?

C. F. Baluyut Realty are group of real estate professional who are here to help you in your Philippine property acquisition. We have affiliated lawyers based in Pampanga, Philippines who can provide legal advice on laws pertaining to property acquisition.

Photo Credits from Pexels
About the Writer

CRB Benedict Baluyut is a professional real estate broker, real estate appraiser and associate of C. F. Baluyut Realty. He is currently the Vice President for External Affairs, Real Estate Brokers Association of the Philippines, Inc. (REBAP) - Pampanga Chapter. You can get in touch with him at

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