How to invest in property in Davao City?

Authored by the expert who managed and guided the team behind 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 Davao City. 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 Philippines 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 Davao City, Manila, and Cebu. 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 compared to buying property in Western countries?

Buying property in Davao City is significantly more restrictive than purchasing property in most Western countries.

The Philippines Constitution strictly prohibits foreign land ownership, whereas countries like the United States, Canada, Australia, and most European nations allow foreigners to buy land and houses directly with minimal restrictions. In Davao City, foreigners can only own condominium units (limited to 40% of a building's total units), enter long-term leases up to 50 years, or own property through a Filipino-majority corporation.

The documentation process in Davao City requires more complex legal structures and local partnerships compared to Western property purchases. Western countries typically allow straightforward freehold ownership with standard mortgage financing, while Davao City requires specialized legal arrangements and often higher down payments for foreign buyers.

However, the actual transaction process follows similar steps to Western countries once you understand the legal framework. The main difference lies in the ownership structure rather than the purchasing mechanics.

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

What types of property are foreigners actually allowed to buy in Davao City, and what's off-limits?

Foreigners can legally own specific types of property in Davao City under strict constitutional limitations.

Property Type	Foreign Ownership Status	Key Limitations
Condominium Units	Allowed	Maximum 40% of building units
Land Lease	Allowed	50 years maximum, renewable 25 years
Corporate Ownership	Allowed	60% Filipino ownership required
Landed Houses	Not Allowed	Filipino spouse required for ownership
Raw Land/Lots	Not Allowed	Constitutional restriction
Townhouses	Not Allowed	Considered land ownership
Commercial Buildings	Not Allowed	Land ownership restriction applies

Can buying property give a foreigner a path to residency or even citizenship?

Property ownership in Davao City does not automatically grant residency or citizenship rights to foreign investors.

The Philippines immigration system separates property ownership from residency status completely. Foreigners must apply for separate investment visas, retirement visas, or other immigration categories that are not tied to property purchases. Popular residency options include the Special Resident Retiree's Visa (SRRV) for retirees and various investment visas, but these require independent qualification criteria.

Unlike some countries that offer "golden visa" programs linked to property investment, the Philippines does not provide such pathways. Even substantial property investments in Davao City will not qualify you for permanent residency or citizenship based solely on the purchase amount.

Foreign investors must maintain valid tourist visas, work permits, or other legal status independent of their property ownership. Long-term residents often use retirement visas or business visas to maintain legal status while owning property.

Where do most foreigners end up buying in Davao City, and why those areas?

Most foreign buyers concentrate their investments in Davao City's central business districts and established residential developments.

Lanang area attracts significant foreign investment due to its proximity to shopping centers, restaurants, and business districts. The area offers modern condominium developments that meet the 40% foreign ownership requirement and provides easy access to Davao's commercial centers. Bajada district appeals to foreigners for its central location, established infrastructure, and mix of residential and commercial properties available through long-term leases.

Matina area has become popular among foreign investors because of its educational institutions, healthcare facilities, and newer condominium projects. The district offers good connectivity to Davao International Airport and downtown business areas. These three areas provide the security, amenities, and community infrastructure that foreign buyers prioritize when investing in Davao City property.

Foreign buyers avoid more remote or underdeveloped areas due to infrastructure limitations, security concerns, and limited access to international-standard amenities. The concentration in central areas also ensures better resale potential and rental demand from expatriate communities.

What's the full step-by-step process to purchase property as a foreigner?

The complete property purchase process in Davao City follows eight mandatory steps for foreign buyers.

1. **Property Selection and Title Verification**: Choose your desired condominium unit and verify the developer's permits and clean title status through the Registry of Deeds.2. **Reservation Agreement**: Sign the Reservation Agreement or Contract to Sell with the developer or seller, paying the required reservation fee (typically 5-10% of property value).3. **Due Diligence Process**: Complete legal checks, property inspections, and verify all documentation including the Condominium Certificate of Title (CCT).4. **Financing Arrangement**: Secure mortgage financing if needed, or arrange cash payment schedule with the developer or seller.5. **Deed Execution**: Sign and notarize the Deed of Absolute Sale before a licensed notary public, completing the legal transfer process.6. **Tax and Fee Payment**: Pay all mandatory taxes including Documentary Stamp Tax (1.5%), Transfer Tax (0.5-0.75%), and Capital Gains Tax (6%) if applicable.7. **Title Registration**: Register the sale with the Registry of Deeds to obtain the new Condominium Certificate of Title in your name.8. **Final Documentation**: Obtain the Tax Declaration from the City Assessor's Office and complete all registration requirements for legal ownership.

Which documents are mandatory and which are optional during the buying process?

Foreign buyers must prepare specific mandatory documents while several optional documents can facilitate the process.

Document Type	Status	Purpose
Valid Passport/ID	Mandatory	Identity verification and legal capacity
Contract to Sell	Mandatory	Legal agreement with seller/developer
Deed of Absolute Sale	Mandatory	Final ownership transfer document
Condominium Certificate of Title	Mandatory	Proof of clean title and ownership
Tax Declaration	Mandatory	Property tax registration
Special Power of Attorney	Optional	Remote purchase authorization
Source of Funds Proof	Optional	Anti-money laundering compliance

Is it possible to buy property without physically being in the Philippines?

Yes, foreigners can complete property purchases in Davao City remotely through legal representation.

The process requires executing a Special Power of Attorney (SPA) that authorizes a trusted representative to act on your behalf during the entire transaction. This representative can be a lawyer, licensed real estate broker, or trusted individual who will handle document signing, payments, and title transfers. The SPA must be notarized and authenticated by Philippine consular offices in your home country.

Remote buyers must still complete all financial transfers, document preparation, and verification processes from abroad. Your representative will handle the physical presence requirements including property inspections, document submissions to government offices, and final title registration. However, you maintain full control over payment authorizations and major decision points throughout the process.

Many foreign investors successfully complete purchases remotely, particularly for condominium units in established developments where due diligence can be conducted through digital documentation and virtual property tours.

How reliable are real estate agents in Davao, and how do you know who to trust?

Real estate agent reliability in Davao City varies significantly, making proper verification essential for foreign buyers.

Always verify that agents hold valid licenses from the Philippine Regulatory Commission (PRC) before engaging their services. Licensed agents must display their PRC license numbers and renewal certificates, which you can verify through the PRC online database. Reputable agents typically work with established developers and have verifiable track records of successful foreign transactions.

Check agent references through previous clients, online reviews, and local expat communities in Davao City. Large development companies like Ayala Land, SMDC, and other major developers typically partner with vetted agents who understand foreign buyer requirements and legal restrictions. These partnerships indicate higher reliability standards compared to independent agents.

Warning signs include agents who promise land ownership for foreigners, request unusual payment arrangements, or cannot provide proper licensing documentation. Always use agents who can clearly explain the 40% condominium ownership limit and other legal restrictions rather than those who make unrealistic promises about foreign property rights.

Will the legal system protect you as a foreign investor, and what safeguards are in place?

The Philippine legal system provides specific protections for foreign property investors, though enforcement can be complex and time-consuming.

Key legal safeguards include PRC licensing requirements for brokers, mandatory title verification through the Registry of Deeds, and standardized contract procedures that protect buyer rights. The system requires notarized documents, official title transfers, and government registration that creates legal audit trails for property transactions. Foreign investors have the same legal standing as Filipino buyers once they comply with constitutional ownership restrictions.

However, the Philippine legal system operates more slowly than Western judicial systems, and dispute resolution can take months or years. Foreign investors should use reputable legal counsel, work with licensed professionals, and maintain comprehensive documentation to strengthen their legal position. Title insurance and comprehensive due diligence provide additional protection layers beyond basic legal requirements.

The Anti-Dummy Law specifically protects against illegal land ownership schemes, but foreign investors must ensure their own compliance to benefit from legal protections rather than face prosecution for violations.

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

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.

What precautions should you take to avoid common mistakes and pitfalls that foreigners usually face?

Foreign investors must avoid several critical mistakes that can result in legal problems or financial losses in Davao City.

1. **Never attempt "dummy" ownership schemes** where Filipino citizens hold title on your behalf - this violates the Anti-Dummy Law and carries criminal penalties for both parties.2. **Always verify developer permits and licenses** before making any payments, especially for pre-construction projects that may lack proper government approvals.3. **Confirm the 40% foreign ownership limit** hasn't been exceeded in your chosen condominium building before signing any agreements.4. **Use only PRC-licensed brokers and qualified legal counsel** for all contract reviews and due diligence processes.5. **Verify actual title status** at the Registry of Deeds rather than relying on copies or representations from sellers.6. **Avoid cash payments without proper documentation** and always use official receipts and bank transfers for all transactions.7. **Understand lease terms completely** for long-term land leases, including renewal conditions and transfer rights.8. **Get comprehensive property inspections** before final purchase, particularly for resale properties.

How long does the entire process usually take from start to finish?

The complete property purchase process in Davao City typically requires 2-3 months for straightforward transactions.

Pre-construction condominium purchases can extend to 6-12 months depending on construction timelines and payment schedules. Ready-for-occupancy units with clear titles and established developers usually complete within the 2-3 month timeframe. Complex cases involving title issues, financing problems, or legal complications can take 4-6 months or longer to resolve.

The timeline depends heavily on documentation completeness, financing arrangements, and developer efficiency. Cash purchases generally move faster than financed purchases, which require additional bank approval processes. Foreign buyers using remote purchase procedures may add 2-4 weeks for international document processing and SPA arrangements.

Factors that can accelerate the process include working with established developers, having complete documentation prepared in advance, and using experienced legal counsel familiar with foreign buyer requirements.

What are all the costs, taxes, and fees involved—broken down clearly—including whether you can buy in cash, what mortgage options actually exist for foreigners, what rates and conditions are typical, and any tips to secure financing?

Foreign property buyers in Davao City face multiple mandatory costs that typically total 8-12% of the property purchase price.

Cost Type	Rate/Amount	Payment Details
Reservation Fee	5-10% of property value	Paid upfront to secure unit
Down Payment	20-30% of property value	Higher for foreigners than locals
Documentary Stamp Tax	1.5% of selling price	Paid to Bureau of Internal Revenue
Transfer Tax	0.5-0.75% of selling price	Varies by local government unit
Capital Gains Tax	6% of selling price	Usually paid by seller
Registration Fee	Variable amount	Paid to Registry of Deeds
Notarial Fee	₱200 per document	Multiple documents required

**Cash Purchase Options**: Cash transactions are common and often preferred by sellers in Davao City. Cash buyers can negotiate better prices and faster closing timelines. However, large cash transfers require proper documentation for anti-money laundering compliance and source of funds verification.**Mortgage Options for Foreigners**: Several Philippine banks offer home loans to qualified foreign buyers, including BDO, BPI, and Metrobank. Foreign borrowers typically need higher down payments (20-30%) compared to Filipino citizens (10-20%). Interest rates range from 6% to 15% annually depending on the lender, loan amount, and borrower qualifications.**Developer Financing**: Many developers offer in-house financing options with interest rates between 12% and 22% annually. These arrangements often have more flexible approval criteria than bank loans but carry higher interest costs. Payment terms typically span 5-10 years compared to 10-20 years for bank mortgages.**Financing Tips**: Work with banks that have experience serving foreign clients and understand Philippine property law. Prepare comprehensive income documentation, maintain Philippine bank accounts, and consider using international lenders familiar with Southeast Asian markets. Legal residency status significantly improves financing approval odds and interest rate negotiations.

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

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.

Sources

1. Wise - Buy Property in the Philippines
2. Respicio & Co - Foreign Real Estate Ownership Restrictions
3. TransferGo - Buying Property in the Philippines
4. China Briefing - Foreign Ownership Rules Philippines
5. Juwai - Philippines Property Guide
6. Davao Properties - Buying Guide
7. Davao Properties - Financing Options
8. Wise - Buy House in Philippines
9. Davao Properties - Ultimate Guide
10. BDO - Home Loan