Before we dive into the mechanics of how our Purchase to Lease contracts work, lets take a quick look at the alternate options for a foreigner looking to secure certain rights to property in the Philippines.
Can I own ground outright in the Philippines?
Absolutely not. It is strictly prohibited by law and at best, through a complex arrangement of shares (a maximum of 40%) held in a company that is sixty percent Filipino owned, you can secure a 40% stake in a piece of land, be it for commercial, agricultural or residential purposes. Far from ideal and as a minority shareholder, your interests in the land are not completely protected.
While the above arrangement may suit large scale business seeking to establish a stake in a Filipino based business, the mechanics are complex and prohibitively expensive for those looking to build a residential home.
The 1987 Philippine Constitution Article XII, Section 7 explicitly restricts the ownership of land to Filipino citizens or to corporations that are at least 60% Filipino-owned.
Are there exceptions?
Yes. Foreigners can legally purchase one or more units in a condominium development, as long as the total square meterage of their purchased property does not exceed 40% of the total livable area in the development. This arrangement would obviously suit older retiree’s that need to be close to large metropolitan areas that provide extensive medical resources. It is not, however without its challenges.
- Finding a well run, well built complex that is maintained properly isn’t as simple as it sounds.
- In terms of location, you will be limited to larger cities, mostly coastal.
- Levies, maintenance and other hidden costs can dig into your budget at a later date when you may not be able to afford it.
- On your death, dependent on your agreement with the developers, issues can arise when trying to transfer rights or equity to family, both foreign and Filipino.
So in blunt conclusion, if you want to own a piece of land outright, pick another country. The Philippines, rightly so, considers it’s land one of its primary assets and ownership is restricted to Filipinos. This is a common refrain across Asia, and by no means unique to the Philippines.
There will be those reading this article who see an alternate solution. Buying land and registering it in the name of their Filipino wife or girlfriend. For those who feel comfortable with this solution, I’d strongly recommend reading our article on the Common Pitfalls Foreigners step into when they arrive in the Philippines.
If I cannot own Land what are my options?
To accommodate foreigners wishing to settle in the Philippines, the law allows you to enter into a Long Term Lease for a parcel of land or a property with an existing structure (commonly referred to here as house and lot).
A lease would typically span 50 years or less. After it expires, it can renewed for an additional 25 years, either automatically or by agreement between the parties as specified in the original lease agreement. For those interested in the relevant laws that govern these leases and the rights associated with them, you can read through the links below. We have also provided a brief overview of your rights below the links, to save you time. The links will open a new window, simply close the pages to return to this window.
- Investor’s Lease Act (Republic Act No. 7652)
- Civil Code of the Philippines
- Commonwealth Act No. 141 (Public Land Act)Â &Â Presidential Decree No. 1529 (Property Registration Decree)
- The Anti-Dummy Law (Commonwealth Act No. 108)
A Long Term Lease affords a foreigner numerous rights over the ground they lease, including, but not limited to; full access to and use of the ground for the purposes described in the lease and ownership of structures erected on the leased ground, if so specified in the lease. It is an elegant and simple solution to protecting yourself if you plan to build a home here and settle long term, but, as with buying a condominium, the content and intent of the lease are fundamental to protecting your rights.
Dealing with a lease and private land owners, attorneys who place their clients interest before yours, and ensuring all documents are properly processed and registered with the Deeds Office are but a few of the hurdles you will have to clear to safely secure a piece of land to build on. That’s where Go East comes into its own. Our Long Term Lease is unique.
Go East Purchase to Lease
Our leases are drawn up with the exclusive intent of protecting and maximising our clients rights over a piece of land whilst still complying fully with Filipino law. All the land we lease is owned outright by the Go East Corporation, ensuring you complete piece of mind. Unlike many local developments, our residential layouts encompass public space and shared services, security and many of the amenities you’d expect from a western style development, whilst retaining the charm and simplicity of local, tropical village life. Exactly the sort of place we’d like to to call home.
Our leases are set at a 50 year period, automatically renewing for an additional 25 years. Our clients retain ownership of any improvements made on the ground, and all our leases can be converted into a sale agreement, should you find yourself a victim of cupids’ arrow. We also deal with transfer of rights after your death and a host of other issues pertinent to protecting you.
To discuss our lease in more detail please get in touch with us, or for advice on how best to approach selecting land, building a home, and settling here, you can read these articles for more advice before you get in touch with us.
- How we Assist You Selecting Ground and Settling Here
- Location, Location, Location – and Why It Matters
- How Best to Budget for your Asian Move