Last reviewed: 27 September 2026
Foreigners can buy condominium units and can lease land long-term, but in general they cannot own land. Most costly mistakes start with a clever-seeming workaround. Here is what the law allows, what it forbids, and what to check before you pay a deposit.
The constitutional rule on land
Article XII, Section 7 of the 1987 Constitution provides that, except in cases of hereditary succession, private lands may be transferred only to individuals, corporations or associations qualified to acquire or hold lands of the public domain. In practice, this means Filipino citizens and corporations at least 60% owned by Filipinos. A foreigner cannot buy land in their own name, and that includes the lot under a house. The restriction is on land, not buildings.
Exceptions to the land ban
1. Hereditary succession
A foreigner may acquire land by inheritance as a legal heir. A will that leaves land to a foreigner who is not a legal heir should be reviewed carefully, because the exception is read narrowly.
2. Former natural-born Filipinos
Section 8 of Article XII allows a natural-born Filipino who has lost Philippine citizenship to acquire private land, subject to limits set by law:
- Residential use (BP 185): up to 1,000 square metres of urban land or 1 hectare of rural land. If both spouses use the privilege, their combined area cannot exceed this limit.
- Business or other purposes (RA 8179, which amended the Foreign Investments Act): up to 5,000 square metres of urban land or 3 hectares of rural land.
- Number of lots: under both laws, a buyer may acquire no more than two lots, located in different cities or municipalities.
Former Filipinos who reacquire citizenship under the Citizenship Retention and Re-acquisition Act (RA 9225) regain full civil and political rights. They can then own land as Filipinos, without these area limits.
Condominium units: the 40% rule
The Condominium Act (RA 4726) is the main route for foreign buyers. Under Section 5:
- Condominium corporation projects: where the common areas are held by a condominium corporation, a unit may not be transferred if the transfer would make alien interest in the corporation exceed the limits set by law. Because the corporation effectively holds land, it must stay at least 60% Filipino-owned. This is where the familiar rule comes from: foreigners may own up to 40% of the units in a project.
- Co-owned common areas: where the common areas are co-owned by the unit owners, units may be conveyed only to Filipinos or to corporations at least 60% Filipino-owned, except by hereditary succession.
Before you reserve a unit, ask the developer or the condominium corporation for written confirmation that the foreign-ownership quota is still open. In popular Cebu and Metro Manila projects, the foreign quota can fill up before the Filipino units sell out.
Long-term leases
Investors’ Lease Act (RA 7652, as amended by RA 12252)
Foreign investors can lease private land for longer periods under the Investors’ Lease Act. As originally enacted, the Act allowed leases of up to 50 years, renewable once for up to 25 years. RA 12252, signed on September 3, 2025, amended the Act as follows:
- Lease period: a foreign investor may now lease private land for an aggregate period of up to 99 years. The President may set shorter periods for critical infrastructure.
- Registered investment required: the lessee must have an approved and registered investment, for example under the Foreign Investments Act, the CREATE/CREATE MORE incentive regime or an investment promotion agency.
- Registration of the lease: the lease must be registered with the Registry of Deeds and annotated on the title. Registration is the operative act that binds third parties.
- Using the leasehold: it may be sold, assigned or used as loan security, subject to the law’s conditions. The lessee may sublease with the lessor’s consent unless the contract prohibits it.
- Tourism projects: these must involve an investment of at least US$5 million, 70% of which must be infused within three years.
- Leases beyond the limit: a lease contract exceeding the allowed period is void, and violations carry criminal penalties.
Ordinary leases (PD 471)
A foreigner who is not a registered investor, such as an individual leasing land for a home, falls under Presidential Decree No. 471. Under PD 471, leases of private land to aliens may not exceed 25 years, renewable for another 25 years by mutual agreement.
Structures to avoid
Dummy arrangements
The Anti-Dummy Law (Commonwealth Act No. 108, as amended) punishes Filipinos who lend their names to aliens to evade nationality restrictions, and the aliens who benefit, with imprisonment of 5 to 15 years. The law also penalises simulating the Filipino minimum capital, for example when a Filipino shareholder “owns” 60% but the money came from the foreigner.
The law adds a warning sign relevant to couples. If a Filipino in a common-law relationship with an alien holds property reserved to Filipinos while the alien controls it, that fact is prima facie evidence of a violation.
Buying through a 60/40 corporation
A corporation at least 60% Filipino-owned may own land. This works only if the Filipino shareholders are real investors who put in their own money and exercise real rights. Under the Anti-Dummy Law, aliens may sit on the board only in proportion to their allowable equity, and they generally may not intervene in its management, operation, administration or control (for example, as officers or employees), except as the law specifically allows. A company whose Filipino shareholders are nominees is exactly what the law targets.
Titling land in a Filipino spouse’s name
Many foreigners put land in the name of their Filipino spouse. The Supreme Court has repeatedly held that the foreign spouse gains no enforceable right to that land. In Muller v. Muller (G.R. No. 149615, August 29, 2006), a foreign husband who used his own funds to buy land titled in his Filipina wife’s name could not recover reimbursement after the marriage broke down. The Court ruled that he knowingly violated the constitutional ban, and that equity will not allow a person to obtain indirectly what cannot be obtained directly. The Court relied on earlier rulings such as Cheesman v. Intermediate Appellate Court.
Safer options are a properly drafted lease, a condominium unit in your own name, or lawful estate planning. Secret side agreements do not protect you.
Due-diligence checklist before you buy
- Title: get a certified true copy of the title from the Registry of Deeds, not only a photocopy from the seller. Check the owner’s name, technical description, liens, adverse claims and annotations.
- Tax declaration and real property tax: compare the tax declaration with the title, and ask for a real property tax clearance from the city or municipal treasurer.
- Developer’s licence to sell: for pre-selling or new projects, confirm the project’s registration and licence to sell, now issued by the Department of Human Settlements and Urban Development (DHSUD). Under PD 957, subdivision lots and condominium units may not be sold without one.
- Foreign quota: get written confirmation that the unit can still be sold to a foreigner.
- Seller’s authority: check IDs, marital consent, special powers of attorney and corporate board resolutions, as applicable.
- Transfer taxes and costs: budget for capital gains tax or creditable withholding tax (depending on the seller), documentary stamp tax, the local transfer tax, and Registry of Deeds registration fees. The BIR must issue an electronic Certificate Authorizing Registration (eCAR) before the title can be transferred. Who pays which cost is negotiable and should be stated in the contract.
- Inspection: check occupants, boundaries, access and zoning.
Frequently asked questions
Can a foreigner own a house but not the land? The land ban does not cover buildings, but a house on leased land is only as secure as the lease. Draft it carefully and register it.
Can a foreigner inherit land from a Filipino spouse? Hereditary succession is a constitutional exception, so a foreign spouse who is a legal heir may inherit. Estate settlement still follows the usual tax and registration rules.
Is a 99-year lease available to anyone? No. Under RA 12252, it is available to foreign investors with approved and registered investments. Other foreigners generally remain under PD 471’s 25 + 25 years.
Can I use a Filipino friend as the titleholder? No. That is a dummy arrangement with serious criminal exposure, and courts will not help you recover the property.
Get the structure right first
Our legal team handles title checks, contract review and lease structuring for foreign buyers. See our real estate transaction services or contact us. Retirees planning to live here may also look at the SRRV. The consultation is free, and fees are quoted per client.
Book a free consultation · WhatsApp/Viber +63 946 341 4836 · info@bizzurevisa.com
Sources
- 1987 Constitution, Article XII: https://lawphil.net/consti/cons1987.html
- Batas Pambansa Blg. 185: https://lawphil.net/statutes/bataspam/bp1982/bp_185_1982.html
- RA 8179: https://lawphil.net/statutes/repacts/ra1996/ra_8179_1996.html
- RA 9225: https://lawphil.net/statutes/repacts/ra2003/ra_9225_2003.html
- RA 4726, Condominium Act: https://lawphil.net/statutes/repacts/ra1966/ra_4726_1966.html
- RA 7652, Investors’ Lease Act: https://lawphil.net/statutes/repacts/ra1993/ra_7652_1993.html
- RA 12252 (2025): https://lawphil.net/statutes/repacts/ra2025/ra_12252_2025.html
- PD 471: https://lawphil.net/statutes/presdecs/pd1974/pd_471_1974.html
- Commonwealth Act No. 108 (Anti-Dummy Law): https://lawphil.net/statutes/comacts/ca_108_1936.html
- Muller v. Muller, G.R. No. 149615 (2006): https://lawphil.net/judjuris/juri2006/aug2006/gr_149615_2006.html
- PD 957: https://lawphil.net/statutes/presdecs/pd1976/pd_957_1976.html
This article is general information, not legal advice. Requirements and fees are set by government agencies and may change without notice.
