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Everything you need to know before buying real estate is included in our The Philippines Property Pack
Foreigners cannot own land in the Philippines, but they can legally purchase condominium units and lease land for up to 75 years.
As of June 2025, the Philippine property market continues to attract foreign investors, particularly in Metro Manila where condo prices average ₱217,000 per square meter, and secondary cities like Cebu and Davao offer better value with prices ranging from ₱40,000 to ₱150,000 per square meter.
If you want to go deeper, you can check our pack of documents related to the real estate market in the Philippines, based on reliable facts and data, not opinions or rumors.
Foreigners can buy condominiums (up to 40% of units in a building) but cannot directly own land in the Philippines - they must use legal workarounds like long-term leases or corporate ownership.
The best investment locations as we reach mid-2025 include Metro Manila (5-7% rental yields), Cebu City (4.9-5.7% yields), and emerging cities like Iloilo and Davao with potential returns of 6-12% including appreciation.
| Ownership Method | What You Can Own | Key Limitations |
|---|---|---|
| Direct Purchase | Condominiums only | Maximum 40% foreign ownership per building |
| Long-term Lease | Land use rights | 50 years initial + 25 years renewal |
| Philippine Corporation | Land and buildings | Maximum 40% foreign ownership in corporation |
| Marriage to Filipino | Buildings (land in spouse's name) | Title must be in Filipino spouse's name |
| Total Costs | Taxes and Fees | 8-12% of property value in closing costs |
| Mortgage Availability | Yes for condos | 20-30% down, 6-8% interest rates |
| Best ROI Cities | Iloilo, Davao, Pampanga | Up to 15% annual appreciation |
Can foreigners actually own land in the Philippines, or are there legal workarounds?
Foreigners cannot directly own land in the Philippines due to constitutional restrictions that have been in place since 1935.
However, there are several completely legal ways to invest in Philippine real estate. You can purchase condominium units as long as foreign ownership doesn't exceed 40% of the total units in the building. You can also own the actual house or building structure, but not the land underneath it - the land must be leased or owned by a Filipino citizen or corporation.
The most common workaround is establishing a Philippine corporation where you can own up to 40% of the shares, with the remaining 60% held by Filipino citizens. This corporation can then legally own land. Another option is entering into a long-term lease agreement for up to 50 years, renewable for another 25 years, giving you effective control for 75 years total.
If you're married to a Filipino citizen, the land can be purchased in your spouse's name, though you cannot be named on the title. Foreigners can also inherit land under specific conditions through hereditary succession.
Never attempt dummy arrangements where you use a Filipino as a front to circumvent ownership laws - this is illegal and carries severe criminal penalties including imprisonment.
What visa options work best if I'm buying property for long-term living?
You don't need a special visa just to buy property in the Philippines, but you'll need one if you plan to live there long-term.
The Special Resident Retiree's Visa (SRRV) is the most popular option for property buyers, offering indefinite stay and multiple entry privileges. Certain SRRV schemes even allow you to use your required deposit (ranging from $10,000 to $50,000 depending on age) toward purchasing a condominium, essentially converting your visa deposit into real estate investment.
For those married to Filipino citizens, the 13(a) Non-Quota Immigrant Visa provides permanent residency without investment requirements. This visa allows indefinite stay and doesn't require regular renewals, making it ideal for property owners who want stability.
The Special Investor's Resident Visa (SIRV) grants indefinite residency but requires a $75,000 investment in Philippine businesses - it cannot be used for residential real estate purchases. Work visas are another option if you're employed by a Philippine company, typically valid for 1-3 years and renewable.
Tourist visas can be extended up to 36 months but don't provide the stability needed for property ownership and long-term residence. As of June 2025, immigration policies remain stable, but always verify current requirements with Philippine immigration authorities.
Do I need to fly to the Philippines to sign papers and complete the purchase?
Physical presence is not strictly required to complete a property purchase in the Philippines.
You can appoint a trusted representative through a Special Power of Attorney (SPA) to handle all aspects of the transaction on your behalf. This document must be properly notarized in your home country and authenticated at the nearest Philippine consulate or embassy. Your appointed attorney-in-fact can then sign contracts, process payments, and complete the title transfer.
The SPA must specifically enumerate the powers granted, including authority to sign the Deed of Sale, pay taxes, and register the property. Generic or broadly-worded SPAs may be rejected by government offices.
While remote purchasing is legally possible, many buyers prefer at least one site visit to inspect the property, meet with developers or sellers, and establish relationships with local professionals. Some banks may also require your physical presence if you're applying for a mortgage.
All documents signed abroad must go through proper authentication procedures - notarization, apostille (for countries party to the Hague Convention), or consular authentication to be valid in the Philippines.
What's the step-by-step process for foreigners buying property in the Philippines?
The property buying process in the Philippines follows a structured sequence that typically takes 2-3 months to complete.
First, conduct thorough due diligence on the property and developer. Verify the property title is clean (no liens or encumbrances) through the Registry of Deeds, check the developer's track record and licenses, and confirm the building permits and condominium corporation documents are in order.
Once satisfied, submit a Letter of Intent (LOI) stating your interest and proposed terms. After negotiations, you'll sign either a Contract to Sell (for installment purchases) or proceed directly to a Deed of Absolute Sale (for full payment). The initial reservation fee is typically ₱20,000-₱50,000, followed by a down payment of 10-30%.
You'll need these essential documents: valid passport and visa, Alien Certificate of Registration (ACR) or I-Card, Tax Identification Number (TIN) which you can obtain from the Bureau of Internal Revenue, proof of income or funds, and if applicable, your marriage certificate.
After signing contracts and completing payment, the seller processes the Capital Gains Tax (6% of selling price) and Documentary Stamp Tax (1.5%). You'll then pay the transfer tax (0.5-0.75%) and registration fees (0.25%) at the local government. The final step is registering the new title at the Registry of Deeds and updating the tax declaration at the Assessor's Office.
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Should I hire a lawyer and broker, and how do I verify they're legitimate?
Working with licensed professionals is not just recommended - it's legally required for real estate transactions in the Philippines.
All real estate brokers and salespersons must be licensed by the Professional Regulation Commission (PRC). You can verify their credentials online at the PRC website by checking their license number and status. Unlicensed individuals facilitating property sales face criminal charges, and transactions through them may be voided.
While lawyers aren't legally mandatory for property purchases, hiring one is crucial for protecting your interests. A good real estate lawyer will conduct title verification, review all contracts, ensure tax compliance, and guide you through the complex legal requirements for foreign buyers. Expect to pay 1-2% of the property value in legal fees.
When vetting professionals, ask for their PRC license (for brokers) or IBP number (for lawyers), request references from other foreign clients, check their firm's reputation and years in business, and verify they specialize in real estate transactions for foreigners. Be wary of anyone who promises ways to circumvent foreign ownership restrictions or offers deals that seem too good to be true.
Reputable brokers will always provide official receipts and proper documentation, while legitimate lawyers will give you detailed engagement letters outlining their services and fees.
Which Philippine cities and regions attract the most foreign property buyers?
Metro Manila remains the top destination for foreign property investors, particularly the central business districts of Makati, Bonifacio Global City (BGC) in Taguig, and Ortigas Center.
Makati CBD offers the highest rental yields in the country at 5-7% annually, with luxury condos averaging ₱364,000 per square meter as of June 2025. BGC attracts multinational corporations and expats with its modern infrastructure, though prices have stabilized at ₱275,000 per square meter due to increased supply.
Cebu City is the second most popular destination, offering a perfect balance of urban amenities and beach proximity. Property prices range from ₱100,000-₱150,000 per square meter, significantly lower than Manila while still providing 4.9-5.7% rental yields. The IT-BPO sector drives consistent rental demand from young professionals.
Davao City attracts buyers seeking safety and quality of life, with former President Duterte's legacy of strict law enforcement. Properties here are remarkably affordable at ₱40,000-₱70,000 per square meter, with growing demand from both locals and foreigners.
Resort destinations like Boracay, Palawan, and Siargao appeal to lifestyle buyers and short-term rental investors. However, environmental regulations and infrastructure limitations require careful due diligence. Emerging cities like Iloilo and Bacolod offer the highest growth potential, with property values appreciating up to 15% annually due to infrastructure development and economic expansion.
Where should I invest for rental income versus capital growth in 2025?
For maximum rental income in 2025, focus on Metro Manila's established business districts where demand from expats and young professionals remains strong.
Mandaluyong and Manila City deliver the highest gross rental yields at 6-7%, particularly for studio and one-bedroom units near MRT stations. Properties in these areas rent for ₱25,000-₱40,000 monthly with minimal vacancy. Quezon City offers similar returns with lower entry prices, especially near university belts and IT parks.
For capital appreciation, secondary cities present the best opportunities. Iloilo City leads with 15% annual price growth, driven by major infrastructure projects including the new international airport and Panay-Guimaras-Negros bridge. Property prices remain low at ₱10,000-₱50,000 per square meter, offering significant upside.
Clark in Pampanga benefits from the new international airport and growing business district, with prices appreciating 8-10% annually. Cavite and Laguna provinces near Manila offer suburban growth plays, with new townships and industrial zones driving 6-8% yearly appreciation.
| Location | Investment Type | Current Returns |
|---|---|---|
| Makati/BGC | Rental Income | 5-7% gross yield |
| Mandaluyong | Rental Income | 6-7% gross yield |
| Cebu City | Balanced | 4.9-5.7% yield + 5% growth |
| Iloilo City | Capital Growth | Up to 15% annual appreciation |
| Davao City | Capital Growth | 8-10% annual appreciation |
| Pampanga/Clark | Capital Growth | 8-10% annual appreciation |
| Boracay/Palawan | Tourism Rental | 8-12% seasonal yields |
What are property prices across the Philippines and where are they heading?
As we reach mid-2025, Philippine property prices show a clear divide between Metro Manila and provincial cities.
Metro Manila's average condominium price stands at ₱217,000 per square meter, up 6.5% from 2024. However, the luxury segment in BGC and Makati faces oversupply, with some developers offering 10-15% discounts and flexible payment terms. Parañaque near the airport has seen prices soften to ₱286,000 per square meter due to new supply.
Secondary cities offer remarkable value. Cebu City condos range from ₱100,000-₱150,000 per square meter, while Davao City offers modern units at just ₱40,000-₱70,000. Iloilo City presents the best value proposition at ₱10,000-₱50,000 per square meter, though prices are rising rapidly.
Looking ahead to late 2025 and 2026, expect Metro Manila prices to stabilize or grow modestly at 4-6% annually due to limited land supply. The real growth will come from secondary cities, with Iloilo, Bacolod, and Cagayan de Oro potentially seeing 10-15% annual appreciation as infrastructure projects complete.
The sweet spot for investors as of June 2025 appears to be mid-range properties in emerging CBDs like Arca South, Vertis North, and provincial city centers where supply hasn't yet caught up with growing demand from the expanding middle class.
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.
Can foreigners get mortgages in the Philippines and what are the requirements?
Yes, foreigners can obtain mortgages for condominium purchases from major Philippine banks, though requirements are stricter than for Filipino citizens.
Banks like BDO, BPI, Metrobank, and Security Bank offer home loans to foreigners with interest rates currently ranging from 6-8% per annum as of June 2025. You'll typically need a 20-30% down payment, compared to as low as 5% for locals. Loan terms extend up to 20 years, though most foreigners qualify for 10-15 year terms.
Essential requirements include a valid long-term visa (SRRV, work visa, or 13a), proof of stable income for the past 2 years (employment certificate or business documents), Philippine Tax Identification Number (TIN), and bank statements showing sufficient funds. Some banks require a Filipino co-borrower for house-and-lot purchases.
Your debt-to-income ratio should not exceed 40%, and banks prefer borrowers under 65 years old at loan maturity. Employment with a multinational company or established business ownership significantly improves approval chances.
Pro tip: Open a peso savings account with your chosen bank at least 6 months before applying, maintain good account standing, and consider getting pre-approved before property hunting to strengthen your negotiating position with sellers.
What's the total cost breakdown including taxes and fees when buying property?
Beyond the purchase price, expect to pay an additional 8-12% in taxes and fees when buying property in the Philippines.
The major costs include Capital Gains Tax at 6% of the selling price or zonal value (whichever is higher), typically shouldered by the seller but sometimes passed to buyers in negotiated deals. Documentary Stamp Tax adds 1.5% of the selling price, while transfer tax varies by location at 0.5-0.75%.
- Registration fees: 0.25% of selling price or zonal value
- Notarial fees: 1-2% of property value
- Real estate broker's commission: 3-5% (usually paid by seller)
- Legal fees: 1-2% if you hire a lawyer
- Due diligence costs: ₱10,000-₱30,000
Annual ownership costs include Real Property Tax at 1-2% of assessed value (much lower than market value), plus association dues for condominiums ranging from ₱60-150 per square meter monthly in Metro Manila.
Some developers add miscellaneous fees like processing fees (₱50,000-₱100,000) and turnover fees. Always request a complete computation of all fees before signing any contracts to avoid surprises.
It's something we develop in our Philippines property pack.
What expensive mistakes do foreign buyers commonly make and how can I avoid them?
The most costly mistake is attempting to own land directly or through illegal dummy arrangements, which can result in property forfeiture and criminal charges.
Many foreigners trust unlicensed agents or fixers who promise special deals or ways around ownership restrictions. Only work with PRC-licensed brokers whose credentials you've verified online. These unlicensed operators often disappear with deposits or facilitate fraudulent transactions.
Insufficient due diligence ranks second in expensive mistakes. Buyers skip title verification and later discover liens, fake titles, or ongoing litigation. Always hire a lawyer to conduct a thorough title search at the Registry of Deeds and verify the seller's authority to sell.
Not understanding tax obligations causes problems years later. Foreign property owners must file annual tax returns in the Philippines for rental income, with rates up to 32% for non-residents. Many countries also tax worldwide income, creating potential double taxation without proper planning.
Other critical mistakes include paying large deposits without proper receipts and contracts, buying off-plan from developers without checking their track record and permits, assuming verbal agreements are binding (they're not in Philippine law), and not budgeting for the full 8-12% closing costs. Most importantly, never transfer money without official receipts and proper documentation - legitimate developers and sellers always provide these.
How does owning Philippine property affect my taxes both there and in my home country?
Property ownership in the Philippines creates tax obligations in both countries that require careful planning to optimize.
In the Philippines, you'll pay annual Real Property Tax of 1-2% of the assessed value (typically 20-50% of market value) to the local government. If you rent out the property, rental income is taxed at graduated rates up to 32% for non-residents, or you can opt for an 8% flat rate on gross receipts if you're engaged in business.
When selling, you'll face Capital Gains Tax of 6% of the gross selling price or current zonal value, whichever is higher. This applies regardless of actual profit or loss on the sale. Value-added properties may also attract 12% VAT.
Your home country likely taxes worldwide income, meaning Philippine rental income must be declared. However, most countries have tax treaties with the Philippines to avoid double taxation. You can typically claim foreign tax credits for Philippine taxes paid, though the mechanism varies by country.
Common tax planning strategies include holding property through a Philippine corporation (subject to 30% corporate tax), timing sales to optimize tax years, and maintaining proper documentation for all Philippine taxes paid. Consult tax advisors in both countries before purchasing, as improper structuring can result in unnecessary double taxation that could have been avoided with proper planning.
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.
The Philippine property market in 2025 offers compelling opportunities for foreign investors who understand the legal framework and choose locations wisely.
While land ownership remains restricted, the condominium market provides accessible entry points with rental yields of 5-7% in Metro Manila and capital appreciation potential exceeding 15% annually in emerging cities. Success requires working with licensed professionals, conducting thorough due diligence, and structuring ownership properly to comply with Philippine laws while optimizing tax obligations in both countries.
Sources
- Global Property Guide - Philippines Buying Guide
- Respicio & Co. - Foreign Ownership of Land in the Philippines
- BambooRoutes - Philippines Real Estate for Foreigners
- Federal Land - Expat's Guide to Buying Condos in the Philippines
- InvestAsian - Real Estate Agents in the Philippines
- RichestPH - Best Philippine Cities for Real Estate Investment
- Global Property Guide - Philippines Rental Yields
- Trading Economics - Philippines Residential Property Prices
- N90 Asia - Getting a Home Loan as a Foreigner in the Philippines
- Global Property Guide - Philippines Property Taxes and Costs