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Effective Land Ownership

5K views 35 replies 11 participants last post by  Asian Spirit 
#1 ·
I realize that a foreigner cannot buy land in the Philippines but are there ways to get effective land ownership?

By that, I mean all the rights generally associated with land ownership such as the ability to sell it and to get a profit when the land is sold for a higher value.

I can think of two possibilities but not sure if they will work or if a different plan would be better.

The first would be an extremely long-term lease with the right to transfer the lease. To do this you would need to have a trusted friend purchase the land then give them the money in exchange for a lease in perpetuity (or 99 years with right of renewal). The lessor would be responsible for all taxes etc. and would be able to make improvements.

The second would be to have the property in a Philippine corporation. The Philippine majority of shares requirement could be satisfied by them owing non-voting class of shares and the part that the foreigner would own would be the voting shares. Then the corporation could own the property and rent it from the corporation for the taxes and costs of improvements whipping out any corporate profit. Sale of the peroperty would be via sale of the voting shares of the corporation. ( This strategy would also work for buying other properties or conducting a business in the Philippines.)


Are there any other ways to get effective ownership? Are there any serious pitfalls with either of these strategies?

Or is simply renting on an annual term a better idea?
 
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#2 ·
I don't think it is worth the trouble. A lot of people try to get around the system and end up getting screwed. If anyone ever fights you in court you will most likely lose. the 'anti-dummy' law will always favor the Filipino over the foreigner. It is in their constitution that only Filipinos can own land. Even if you inherit land from your wife you only have a time limit in which you have to dispose of it.

I figure I am old enough that as long as I can live on it until I die... it is good enough for me.
 
#4 ·
What the other guys say hits the nail on the head, you can't own. Leases are generally 25 +25 so say max 50 with possible extensions if written into the lease but safely say 50.
Do you want the head ache of setting up a company, a dummy company if caught carries serious penalties.
Consult a good attorney in Manila who is geared up this problem, good luck, we have talked to a few so far but no joy, slowly slowly the wheels turn here, hope it's ok to post the link.

https://philippinecivillaw.wordpress.com/category/obligations-contracts/08-lease/

Interesting site.

Cheers, Steve.
 
#10 ·
Interesting meeting (again) with a real estate agent/developer up in our neck of the woods. We have been looking at beach front properties over the last couple of years but no joy. A few days ago we found one that interests us.
While in a meeting with the principle and his son, going over the titles (2) the and the 8 year old subdivision plans I happened to mention that I would need to draw up a lease between myself and Bengie, with an attorney, no no said the agent, you form a corporation which requires your signature or your executors to sell the land/property, it can't be sold otherwise, you are secure, we do this all the time. I balked that that would be expensive, no sir, under 30,000 to set up and under 1,500 for the book keeper to do the annual paperwork and reconciliations.
He indicated that many Foreigners buy here and that's the way they go. On reflection and others can chime in here, surely others have done this, obviously many have where we are looking to buy, as it is 100% expats on the beach and also the blocks behind.
We hope to approach/meet some of the locals there to get their side of the story with regards to this issue. Financial security for the next 30 years is my concern, after that I won't mind what happens.
Finding a good lawyer for accurate advice is the next problem.
Stay tuned.

Cheer, Steve.
 
#13 · (Edited)
Steve,

You may have already searched back. There have been some interesting threads on this board concerning different schemes and how to go about the "no foreigner ownership" policy here. To my way of seeing it, most all these have some different pitfalls and there is no absolute guarantee of the validity of any of the schemes I have heard of. Most just seem to be another way to extract a bit more from the one desiring the conclusion with no guarantee of the conclusion. Until there are some revisions to the existing laws in this land, us being foreigners are very much at the lower pecking order and puts us on the wrong side of the eightball on most legal subjects or contentions.

Fred
 
#14 ·
Thanks Fred, I did like this line of yours and see the truth in what you say;
"Most just seem to be another way to extract a bit more from the one desiring the conclusion with no guarantee of the conclusion."
I have searched and posted over many years regarding this topic on many expat sites, as said in my previous post, never an answer or info from those that have gone down this road
so as I said to Gary" Perhaps that's a warning sign that it is too difficult."

I see it this way. I can never own land/property here unless I live here for 10 years, learn the local dialect fluently or Tagalog, renounce my Australian citizenship and become a Filipino national.
I can marry a Pinay and put property in her name as many do but if things go south then you possibly lose all, at least in Australia now that the kids are grown and gone if I remarried again I could potentially lose half only.
If Bengie and I stay together in Australia, because our relationship is recognised if things went south then he also would get half, no questions asked that is the law.
Our relationship is not recognised under Filipino law to date. He is my friend apparently.
If Bengie buys a property here in his name and I lease it from him for 50 years?
We form a corporation 60/40. Bengie owns the property not me but we have a company
and lease the property from the 60% owner, to sell the property requires the signature and presence of the 40% owner or his executor/charge. Will and testament.
I have absolutely no problem with Bengie owning the property outright all I am trying to do is make sure I am not kicked out onto the street in 10 or 20 years if things go south.
I am getting too old to start again.
Thanks for your input and views on this topic guys.

Cheers, Steve.
 
#17 ·
All that has been said about land ownership is true. In my case the title of the land is in my wifes name.
You can however own the property that is built on that land. If you can show that all of the financing of the house is from you, it is a very straightforward matter to have the house registered in your name, as I have done so. This has been clarified by 3 different lawyers. Like you I have no desire to continue ownership beyond my own lifetime and as and when I depart this world, naturally full ownership of the property will pass to my wife.

I know that this will be disputed, but I am confident that what I have set up will work out OK in our case. Your own situation sounds a little trickier.
 
#19 ·
Yes you are 100% correct about being able to own the property, it's a bit like owning a condo in a way. The only down side is collecting should you need to. You can't get blood from a stone. i.e. the other side just says they haven't any money. Then what do you do unless your house is on wheels.
 
#22 · (Edited)
Well we did it, We purchased our patch, Unencumbered lease to me from a Filipino national for 25 plus 25. Existing house, buildings and future improvements are in my name, I am leasing the land and own every thing else on the property, including any improvements, lease is transferable to my heirs or executor, if I die or if I choose to Bengie. If the property needs to be sold the lease is transferable to my nominated beneficiary/estate. I can also sub lease all or portions of the land and or improvements. Lots of other stuff. At the end of the day I will lose out absolutely no different than living in a 1st world country. Bengie is the winner, I wouldn't have it any other way.
Probably missed heaps of things here but we are very comfortable with this.

Cheers, Steve.
 
#23 ·
I realize that a foreigner cannot buy land in the Philippines but are there ways to get effective land ownership?
I just got off the phone with Ayala Land, I was told in a phone convesation that a foreigner can own the land via setting up a corporation, the corp would own the land in their Montala development project. Though this is a private gated community and the price was quoted at around 9 million pesos for 550sqm plot just for the land.

Sounds sky high to me for the land cost, I guess this is the skin tax? :frusty:
 
#29 ·
Not true Gary, I do see what you are saying but a single entity? Untrue, very untrue. In essence it is no different to buying a condo whether off the plan or an existing condominium established 20 years ago. Remember I didn't purchase the land, My better half did that, I purchased the buildings and improvements on the land and the right to develop and improve it at my discretion, no questions asked, it's a very simple but comprehensive lease document, it is in the contract of sale and will be notarised on the title according to my mouth piece. If not I will pull the pin.
Many people on this and other sites appear to be somewhat cynical and some extremely negative with regards to most things Filipino and those that choose a life in a bloody great country with a genuine people, very unlike western norms. (We don't give each other the time of day)
Remember we are guests in this country and must abide by the law and social etiquettes of the country we choose to live in, whether the Philippines or Turkey, if not, stay in your own back yard and whinge, whine and criticise there.

Cheers, Steve.
 
#30 · (Edited)
Moving Thread

Howdy Guys,

Even though the post is now in this section with a bit more leeway, forum rules still basically apply.
Please be guided accordingly.

Jet Lag
 
#35 ·
I was going to stay away from this but had to join just to interject that we noticed recently a sign near us that said house only for sale. Which indicates to me they are considered separate here. Last week noticed the sign was down and the Asawa said she had heard they did in fact sell the house only and not the land it sets on. I know nothing more about this.

Fred
 
#36 ·
It's been my experience and personal observation over all the years I've lived here, that laws (even real estate) mean little or nothing. You can buy, sell, or own most anything. But if things ever go sour and you end up in court, the law will almost always in any legal case side or find in favor of the Filipino citizen. Very one sided system here but the cards are stacked against you and nothing can be done to change that.
 
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