How to buy a house in The Philippines?

Authored by the expert who managed and guided the team behind the The Philippines Property Pack

Everything you need to know before buying real estate is included in our The Philippines Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in the Philippines. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Philippine real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Manila, Cebu, and Davao. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How easy is it for a foreigner to buy property in the Philippines compared to Western countries?

Buying property in the Philippines as a foreigner is moderately easy but comes with more restrictions than most Western countries.

The process is simpler than countries like Thailand or Vietnam where foreign ownership is extremely limited, but more complex than countries like the United States or United Kingdom where foreigners can buy almost any property type. In the Philippines, you'll face specific ownership restrictions - you can buy condominiums and buildings but not the land underneath them.

The legal framework is well-established with clear rules about what foreigners can and cannot purchase. The Real Estate Service Act (RA 9646) provides solid consumer protection, and the registration process through the Registry of Deeds is standardized across the country. However, enforcement can be slower than in Western countries, and bureaucratic processes may take longer.

Compared to Western markets, you'll need to be more careful about due diligence since issues like fake titles and unlicensed agents are more common. The good news is that transaction costs are generally lower - typically 2.5-4% of property value versus 5-10% in many Western countries.

Overall, if you understand the restrictions and work with licensed professionals, the process is straightforward and legally secure.

What types of property can foreigners legally buy, and what is strictly off-limits?

Property Type	Foreigner Ownership Allowed	Key Conditions/Restrictions
Condominium Units	Yes - Full Ownership	Maximum 40% of total building units can be foreign-owned
Houses/Buildings (Structure Only)	Yes - Building Only	Land must be leased separately (50 years + 25-year renewal)
Residential Land	No - Strictly Prohibited	Only via inheritance from Filipino relative or long-term lease
Commercial Land	No - Strictly Prohibited	Only via Filipino-majority corporation (60% Filipino ownership)
Agricultural Land	No - Strictly Prohibited	Constitutional prohibition - no exceptions for foreigners
Corporate Property Ownership	Possible	Corporation must be at least 60% Filipino-owned
Leasehold Rights	Yes	Up to 50 years initial term with 25-year renewal option

Can you actually own land, or is it only condos and leasehold arrangements available to foreigners?

Foreigners cannot directly own land in the Philippines under their own name - this is constitutionally prohibited.

Your main legal options for land access are long-term leases (up to 50 years with a 25-year renewal option) or acquiring land through inheritance from a Filipino relative. Some foreigners attempt to use Filipino-majority corporations (requiring at least 60% Filipino ownership), but this involves complex legal structures and anti-dummy law compliance risks.

For condominiums, you get full ownership of the unit itself, but the land underneath the building is owned by the developer or condominium corporation. The 40% foreign ownership limit applies to the total number of units in the building, not the land area. Once a building reaches this 40% foreign ownership cap, no additional units can be sold to foreigners.

If you're buying a house or building, you can own the structure completely but must lease the land it sits on. These lease arrangements are legally secure and renewable, but you need to ensure proper documentation and understand that the land reverts to the lessor when the lease expires.

Many successful foreign property owners in the Philippines use leasehold arrangements, which provide long-term security while remaining fully legal and compliant with Philippine law.

What is the step-by-step process of buying a house in the Philippines from start to finish?

1. **Research and Due Diligence Phase** - Verify what property types you can legally purchase as a foreigner - Check the property's title status and ownership history - Conduct a physical site inspection or virtual tour - Research local property taxes and assess market value2. **Property Selection and Reservation** - Issue a Letter of Intent expressing serious interest - Sign a Reservation Agreement with the seller or developer - Pay the reservation fee (typically 1-5% of property value) - Negotiate final terms and conditions3. **Legal Documentation and Contracts** - Sign the Sales Purchase Agreement or Contract to Sell - Review all terms with a Philippine-licensed lawyer - Ensure compliance with foreign ownership regulations - Verify seller's credentials and legal capacity to sell4. **Payment and Fund Transfer** - Arrange payment method (cash transfer or bank financing) - Transfer funds through official banking channels - Obtain official receipts for all payments made - Ensure proper documentation of fund sources5. **Legal Document Execution** - Notarize the Deed of Absolute Sale (DOAS) - legally required - Ensure all parties sign in the presence of a notary public - Obtain certified copies of all executed documents - Verify proper completion of all required forms6. **Tax Payments and Government Fees** - Pay Documentary Stamp Tax (1.5% of sales price or zonal value) - Pay Transfer Tax (0.5-0.8% of sales price or zonal value) - Pay Registration Fee (0.8% of sales price) - Obtain tax clearance certificates7. **Title Transfer and Registration** - Register the property with the local Registry of Deeds - Obtain new Condominium Certificate of Title or Transfer Certificate of Title - Update tax declarations with local assessor's office - Receive all updated ownership documents8. **Final Confirmation and Possession** - Conduct final property inspection - Receive keys and take physical possession - Set up utilities and property management if needed - Begin paying annual real property taxes to local government

It's something we develop in our Philippines property pack.

What documents are mandatory for the transaction, and which ones are optional but recommended?

The mandatory documents are required by Philippine law and cannot be waived, while optional documents provide additional protection for foreign buyers.

**Mandatory Documents:**- Valid identification (passport and government-issued IDs)- Sales and Purchase Agreement or Contract to Sell- Deed of Absolute Sale (DOAS) - must be notarized- Tax declarations and Bureau of Internal Revenue (BIR) tax compliance documents- Proof of funds or income documentation (bank statements, tax records)- Condominium Certificate of Title or Transfer Certificate of Title upon completion- Special Power of Attorney (SPA) if purchasing remotely - must be notarized and apostilled in your home country**Optional but Strongly Recommended:**- Comprehensive property inspection report conducted by licensed professionals- Legal review of all documents by a Philippine-licensed attorney- Background verification of seller or developer credentials and track record- Complete title history check going back at least 10 years- Property valuation report from certified appraiser- Environmental and structural assessment reports

For remote purchases, the Special Power of Attorney becomes absolutely critical and must be properly authenticated through apostille in your home country before being accepted in the Philippines. Without proper SPA documentation, you cannot legally complete a remote property transaction.

The optional documents may seem like additional expenses, but they protect against common issues like fake titles, overpriced properties, or structural problems that could cost significantly more to resolve after purchase.

Is it possible to buy a property without physically being in the country, and if so how?

Yes, you can legally purchase property in the Philippines without being physically present, but it requires proper legal documentation and trusted local representation.

The key requirement is executing a Special Power of Attorney (SPA) that must be notarized in your home country and then apostilled by the appropriate government authority. This SPA grants a trusted representative in the Philippines the legal authority to act on your behalf in all property transaction matters.

Your SPA should specifically authorize your representative to sign contracts, make payments, receive documents, register property, and handle all aspects of the transaction. The document must be very detailed about what powers you're granting, as vague language can cause problems later.

Many developers and real estate companies now offer digital contract signing and virtual property tours, making remote purchases more feasible. Payment can be handled through international wire transfers to escrow accounts or directly to developers through official banking channels.

However, remote purchases carry additional risks - you should only work with licensed real estate brokers, reputable developers, and Philippine-licensed attorneys. Consider having an independent local inspector visit the property on your behalf before finalizing the purchase.

The entire remote process typically takes 2-4 months instead of 1-3 months for in-person purchases, mainly due to document authentication and international communication delays.

What are the typical taxes, fees, and costs involved in the transaction, with a full breakdown?

Tax/Fee Type	Rate/Amount	Who Pays
Capital Gains Tax (CGT)	6% of sales price or zonal value (whichever is higher)	Seller
Documentary Stamp Tax	1.5% of sales price or zonal value (whichever is higher)	Buyer
Transfer Tax	0.5% to 0.8% of sales price or zonal value (varies by location)	Buyer
Registration Fee	0.8% of sales price	Buyer
Notarial Fee	2-3% of property price (negotiable)	Buyer
Real Property Tax (Annual)	1-2% of assessed value (varies by city/province)	Property Owner
Special Education Fund	Additional 1% on top of annual Real Property Tax	Property Owner
Broker's Commission	3-5% of property price	Seller (typically)
Title Transfer Processing	PHP 35,000 - 50,000 (fixed amount)	Buyer

Is it common to pay in cash, and if you want a mortgage, what are the conditions, rates, and possibilities for foreigners?

Cash payments are extremely common for foreign property buyers in the Philippines because mortgage options for non-residents are very limited.

Most Filipino banks require foreigners to have permanent residency status, a valid long-term visa, and substantial local income documentation before approving mortgage applications. Even then, banks typically require 20-40% down payments compared to 10-20% for Filipino citizens.

As of September 2025, mortgage interest rates for foreigners range from 6-9% per annum with loan terms typically limited to 10-20 years. Banks like BPI, Metrobank, and Security Bank offer foreigner mortgages, but approval requirements are strict and processing can take 2-4 months.

Foreigners married to Filipino citizens have better mortgage access through joint applications where the Filipino spouse becomes the primary titleholder. This arrangement allows access to standard local mortgage rates and terms.

Developer financing is another option - some large developers offer in-house financing with more flexible terms than banks, though interest rates may be slightly higher at 8-12% annually. These arrangements often allow smaller down payments and more flexible income requirements.

For cash transactions, international wire transfers through major banks are the most common and secure method. Avoid cash courier services or informal money transfer systems, as these can create legal complications and lack proper documentation for tax purposes.

How long does the whole purchase process usually take, from signing to transfer of title?

The complete property purchase process typically takes 1-3 months for condominium purchases and can extend to 4-6 months for more complex transactions involving houses with land leases.

For straightforward condominium purchases with cash payment, expect about 6-8 weeks from initial contract signing to receiving your new title. This timeline assumes all documents are complete and there are no title complications.

The process breaks down approximately as follows: initial contract and due diligence (1-2 weeks), payment processing and document preparation (2-3 weeks), notarization and tax payments (1-2 weeks), and title registration with Registry of Deeds (2-4 weeks depending on the location).

Common delays include incomplete seller documentation, title verification issues, tax clearance problems, or backlogs at the Registry of Deeds office. Metro Manila offices tend to be faster than provincial locations, but also more crowded.

Remote purchases typically add 2-4 weeks to the timeline due to international document authentication requirements and communication delays. If you need mortgage approval, add another 6-8 weeks to the overall timeline.

To minimize delays, ensure all your documents are complete before starting, work with experienced licensed brokers, and consider hiring a local attorney to handle Registry of Deeds filings on your behalf.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in the Philippines versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Are real estate agents generally reliable, and how do you choose one you can trust?

Real estate agent reliability varies significantly in the Philippines, making it crucial to verify credentials and choose carefully.

By law, all real estate brokers must be licensed through the Professional Regulatory Commission (PRC) under the Real Estate Service Act (RA 9646). You can verify any agent's license status on the PRC website - never work with unlicensed practitioners as they cannot legally represent you in property transactions.

Look for agents with strong client referrals, established track records with foreign buyers, and transparent communication about fees and processes. Reputable agents will willingly provide their PRC license numbers and have verifiable office addresses.

Warning signs include agents who push for quick decisions, demand large upfront payments, cannot provide proper documentation, or suggest ways to circumvent foreign ownership laws. Avoid agents who promise land ownership "workarounds" or suggest illegal arrangements.

The best approach is working with established real estate companies that have dedicated foreign buyer services, proper insurance, and multiple licensed brokers on staff. Companies affiliated with international real estate networks often provide additional accountability and standardized practices.

Always interview multiple agents, ask for recent client references, and ensure they understand foreign ownership restrictions thoroughly. A professional agent will educate you about legal limitations rather than promising impossible outcomes.

Will the legal system actually protect a foreign buyer, and what legal precautions should you take?

The Philippine legal system provides solid protection for foreign property buyers who follow proper procedures, though enforcement can be slower than in Western countries.

The constitution and various laws clearly define foreign property rights, and Philippine courts generally uphold legitimate contracts and ownership rights. The Registry of Deeds system provides secure title registration, and the Real Estate Service Act offers consumer protection against broker misconduct.

However, legal processes can be lengthy - court cases may take 2-5 years to resolve, and bureaucratic procedures often move slowly. This makes prevention much better than trying to fix problems after they occur.

**Essential Legal Precautions:**- Hire a Philippine-licensed attorney for all document review and legal advice- Verify title authenticity through independent title search services- Ensure all taxes and government fees are properly paid with official receipts- Never sign contracts without thorough legal review and understanding- Verify your agent's PRC license before engaging their services- Keep detailed records of all payments and communications- Structure any corporate or leasehold arrangements with strict anti-dummy law compliance

The key is working within the established legal framework rather than trying to circumvent restrictions. Foreign buyers who follow proper procedures and work with licensed professionals enjoy strong legal protection for their investments.

Consider purchasing title insurance if available, as this provides additional protection against unforeseen title defects or claims that might arise after purchase.

What are the classic mistakes and pitfalls foreigners make, and how can you avoid them?

1. **Attempting to buy restricted properties or land directly** - This violates the constitution and can result in criminal prosecution. Stick to legal options like condos, building leases, or proper corporate structures.2. **Skipping legal counsel or professional title verification** - Many foreigners try to save money by avoiding lawyers, only to discover title problems or invalid contracts later. Always hire a Philippine-licensed attorney.3. **Working with unlicensed real estate agents** - Unlicensed agents cannot legally represent you and offer no consumer protection. Always verify PRC license status before engaging any broker.4. **Underestimating total transaction costs** - Many buyers budget only for the property price and forget about the 2.5-4% in taxes and fees. This can cause serious cash flow problems during closing.5. **Misunderstanding condominium foreign ownership quotas** - Assuming any condo unit can be sold to foreigners without checking if the building has reached its 40% foreign ownership limit.6. **Relying on verbal agreements or informal arrangements** - Philippine law requires written contracts for real estate transactions. Oral promises have no legal standing.7. **Not understanding long-term lease terms and renewal conditions** - Many foreigners sign leases without fully understanding renewal procedures or what happens if the lessor dies or sells the land.8. **Rushing into purchases without proper due diligence** - Taking shortcuts on property inspections, market research, or background checks on sellers often leads to overpaying or buying problem properties.

It's something we develop in our Philippines property pack.

To avoid these pitfalls, take time for proper research, work only with licensed professionals, follow all legal requirements precisely, and never try to circumvent foreign ownership laws through questionable arrangements. The legal framework exists to protect you - use it properly rather than looking for shortcuts.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

It's something we develop in our Philippines property pack.

Sources

1. Emerhub - Buying Property in the Philippines as a Foreigner
2. Respicio Law - Property Ownership for Foreigners in the Philippines
3. Respicio Law - Foreigner Acquiring Land in the Philippines
4. Wise - How to Buy a House in the Philippines
5. Dayanan Consulting - Foreign Ownership of Land in the Philippines
6. Lord Law - Foreign Ownership of Real Estate
7. TransferGo - Buying Property in the Philippines
8. Global Property Guide - Philippines Taxes and Costs