Can foreigners buy property in the Philippines? The 40% rule

Land is for Filipinos - that is the starting point

Under the Constitution, private land can only be owned by Filipino citizens or by corporations at least 60% owned by Filipinos. A foreign national cannot hold a land title in their own name, however long they have lived in the country. The main exception is hereditary succession: a foreigner can inherit land as a legal heir.

Be wary of workarounds. Holding land through a Filipino nominee - a friend or fixer who holds the title for you - is illegal under Philippine anti-dummy rules, and courts will not protect your investment if the arrangement unravels. If you marry a Filipino citizen, land can be bought in your spouse's name, but the title is theirs, not yours.

Condominiums: yes, up to the 40% foreign quota

The Condominium Act (Republic Act 4726) is what opens the door. Section 5 provides that where the land is held by a condominium corporation, units may be transferred to foreigners so long as foreign interest in that corporation does not exceed the limits set by law - in practice, foreigners may hold up to 40% of a condominium project, because the corporation must remain at least 60% Filipino-owned.

Practically, this means you buy a Condominium Certificate of Title in your own name, with full rights to sell, rent out or leave the unit to heirs. The catch is the quota itself: in developments popular with international buyers, the 40% foreign allocation can sell out. Always ask the developer or seller, in writing, whether foreign quota is still available before paying a reservation fee.

• Foreigners can own condo units outright, with title in their own name
• Foreign ownership across a project is capped at 40% under RA 4726
• Check foreign-quota availability before reserving - it can run out
• The rule covers most tower and mid-rise condo projects nationwide

Houses and land: lease the land, own the building

A foreigner can own a house or other building - it is only the land underneath that is restricted. The usual structure is a long-term lease of the land combined with ownership of the improvements on it. Leases should always be registered and drafted by a Philippine lawyer.

For investors, the terms recently improved. Republic Act 12252, signed on 3 September 2025 and in force from 19 September 2025, amended the Investors' Lease Act to allow qualifying foreign investors a single lease term of up to 99 years, replacing the old 50-year term with one 25-year renewal, according to the UNCTAD Investment Policy Monitor. These investor leases require registration under the Foreign Investments Act and approval by the Board of Investments or the relevant investment promotion agency, so they suit business and tourism projects rather than a simple holiday home.

• You can own the house; the land beneath it must be leased or Filipino-owned
• RA 12252 (2025) allows registered foreign investors leases of up to 99 years
• Ordinary residential leases are shorter - take Philippine legal advice on the term

Former Filipinos and dual citizens have wider rights

Natural-born former Filipino citizens can still buy land, within limits. Philippine consulate guidance sets these at 1,000 square metres of urban land or one hectare of rural land for residential use, and 5,000 square metres of urban land or three hectares of rural land for business or investment use, limited to two lots in different cities or municipalities. You cannot combine urban and rural entitlements.

Reacquiring Filipino citizenship under the dual-citizenship law (RA 9225) removes these caps entirely - a dual citizen can own land like any other Filipino. For many former Filipinos abroad, reacquisition is the cleaner route.

• Residential purchases: up to 1,000 sqm urban or 1 hectare rural land
• Business purchases: up to 5,000 sqm urban or 3 hectares rural land
• Dual citizens under RA 9225 face no land-ownership caps at all

The taxes and fees to budget for

Philippine transaction costs are moderate by international standards, but they are split between the parties by custom, not law, so spell out who pays what in your contract. Taxes are computed on the highest of the contract price, the BIR zonal value or the local assessor's fair market value.

Customarily the seller pays capital gains tax at 6% and documentary stamp tax at 1.5%, while the buyer covers the local transfer tax - up to 0.5% in provinces or 0.75% in cities and Metro Manila - plus registration fees of roughly 0.5% to 1% and modest notarial fees. Rates and local charges can change, so confirm current figures with the Bureau of Internal Revenue and the local treasurer's office before completion. Habio's Philippines buyer guides and listings can help you compare what is actually available to foreign buyers area by area.

• Capital gains tax: 6% (customarily paid by the seller)
• Documentary stamp tax: 1.5%
• Local transfer tax: up to 0.5%-0.75% depending on the location
• Registration and notarial fees: allow roughly 0.5%-1% more