Buying a Property for Former Filipinos, Married to Foreigners

by Steve Van Derodar

“It has been twenty years since I became naturalized American” said my client. “I just wanted to own a property where my husband, who is a golfer can play golf whenever we are in the Philippines.” she continued. I remember those statements from my prospective buyer then while presenting to her a video of the project, sight unseen. My outright answer was “Yes, you definitely can have that done!” Months later, when the buyers were in the Philippines, I had learned how the husband has been playing week after week at the golf course with his friends, where their bought lot property is located, titled to the wife.

One might guess that owning properties in the Philippines is only for Filipino citizens. The answer is both yes and no. In general, all-natural born Filipinos can buy properties even those former Filipinos who have been naturalized to foreign citizenship. Section 7, Article XII of the 1987 Constitution famously restricts land ownership to Filipino citizens, but Section 8 provides an interesting exception to this. Former Filipino citizens who have taken foreign citizenship can still own land in the Philippines even before reacquiring Filipino citizenship. Section 8 provides: Notwithstanding the provisions of Section 7 of this Article, a natural-born citizen of the Philippines who has lost his Philippine citizenship may be a transferee of private lands, subject to limitations provided by law.

I have a good number of clients who are formerly Filipinos married to American citizens. The property can only be named to their (formerly) Filipino spouses with limitations: If the land is for commercial use, formerly natural born citizens can own up to 5,000 square meters of urban land. This goes up to 3 hectares if the land is rural (Republic Act No. 8179).

When purchasing, buyers would have to show passport and an affidavit of being a former Filipino and when did she/he lost citizenship due to naturalization, etc. There would be no questions for those who have opted to retain Filipino citizenship or for dual citizens. Under the Dual Citizenship Law of 2003 (RA 9225), former Filipinos who became naturalized citizens of foreign countries are deemed not to have lost their Philippine citizenship, thus enabling them to enjoy all the rights and privileges of a Filipino citizen regarding land ownership in the Philippines.

Generally speaking and as what you may have observed, foreign ownership of a residential house or building in the Philippines is common and is legal as long as the foreigner or expat does not own the land on which the house was built. It is also the reason why properties with Certificate Condominium Title (CCT) such as high-rise condo, condo-townhouses or villa houses are popular to foreigners. The process for Foreign ownership of a condominium property has been fairly easy as The Condominium Act of the Philippines (RA 4726) expressly allows foreigners to acquire condominium units and shares in condominium corporations up to 40% of the total and outstanding capital stock of a Filipino-owned or controlled condominium corporation. They also become member of the corporation by owning a condominium unit. The building should not have more than 40% foreign ownership in the corporation.

Foreigners, while restricted, however, may buy buildings and enter a land lease or a private land, residential house and lot, and commercial building and lot ownership by setting up a domestic corporation in the Philippines. The corporation owning the land should have less than or up to 40% foreign equity and is formed by 5- to 15 natural persons of legal age as incorporators, the majority of which must be Philippine residents.

Golf courses are among the few and rare add-ons to a property development. Most upscale developments feature a Club House including a pool, sports complex, gym facilities and other amenities. It is not wrong to think that developers make it a point to offer its residents amenities that are superior to competition and a distinguishable advantage in a residential community. Lot ownership even without a house structure can be a requirement to be able to enjoy exclusive club memberships through a proprietary membership share in the golf club and clubhouse dependent on the sale contract or offering plan. Also expect dues assessment for residents to enjoy these amenities.

Ayala Greenfield Estates as an enclave in Calamba, Laguna is one of the residential properties in the country with specific value proposition to a project development. Its 350-hectare development serves as the habitat for 35 species and 21 families of endemic and migratory birds. It has first-class recreational amenities, including its very own 18-hole, par 72 championship golf course designed by Robert Trent Jones II, the father of environmental golf course design.
Should you be in similar situation, it is not worrisome to think that property consideration can include few of the things what you and your partner enjoy best or one that can bring families to a lifetime of memories. Sometimes decisions are made on the access to these be that swimming, hiking, or golfing.

(Stevenson’s experience in Philippine Real Estate spans more than 15 years. He has been involved in horizontal, vertical, vacation and commercial properties. He has also worked as an International Property Specialist to markets in Asia, Europe and North America with Ayala Land, Federal Land and Century Properties. Through PhilHouseHunters, he offers real estate investment opportunities, marketing, and consultancy with a key focus to Metro Manila and Mega Cebu areas. Visit www.philhousehunters.com.)

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