1. Only Filipino Citizens and corporations or partnerships at least 60% of the capital of which is owned by Filipinos are entitled to acquire land in the Philippines.
2. As exception to the general rule, alien acquisition of real estate in the Philippines is allowed in the following cases:
i. Acquisition before the 1935 Constitution;
ii. Acquisition through hereditary succession. If foreign acquirer is a legal heir; This simply means that when the non-Filipino is married to a Filipino citizen and the spouse dies, the non-Filipino as the natural heir will become the legal owner of the property. The same is true for the children. Every natural child (legitimate or illegitimate) can inherit the property of his/her Filipino father/mother even if he/she does not have any Filipino citizenship.
iii. Purchase of not more than 40% interest in a condominium project.
iv. Purchase by a former natural-born Filipino citizen subject to the limitations prescribed by Law (Batas Pambansa 185 and R.A. 8179)
3. A Filipino who married an alien retains her Philippine citizenship (unless by her act or omission, she is deed to have renounced her Philippine citizenship) and may therefore acquire real estate in the Philippines.
ACQUISITION BY FORMER NATURAL BORN FILIPINO CITIZEN
1. Mode of acquisition is not limited to voluntary deeds (such as sale or donation) but includes involuntary deeds (such as tax sale, foreclosure sale, or execution sale).
2. Maximum area that may be allowed is as follows: a.. For residential purpose - 1,000 square meters of urban land or one (1) hectare of rural land (BP 185) b.. For business or other purpose - 5,000 square meters of urban land or three hectares of rural land. "Business or other purpose" refers to the use of the land primarily, directly and actually in the conduct of business or commercial activities in the broad areas of agriculture, industry and services, including the lease of land, but excluding the buying or selling thereof."
3. In case of married couple, one or both of them may avail of the privilege, provided that the total acquisition shall not exceed the maximum area allowed.
4. A transferee of residential land under BP 185 may still avail of the privilege granted under RA 8179.
5. A transferee who already owns urban or rural land for residential purpose, may acquire additional urban or rural land for residential purpose which, when added to that already owned by him shall not exceed the maximum area allowed by law. The same privilege applies to a transferee who already owns urban or rural land for business purposes.
6. A transferee may not acquire more than two urban or two rural lands which should be located in different cities or municipalities.
7. A transferee who has already acquired urban land for residential purpose shall be disqualified to acquire rural land for residential purpose and vice versa. The same rule applies to a transferee of land for business purpose.
Dual Citizens Dual citizenship means having two citizenship's and passports from two different countries. Dual citizenship allows the citizenship holder full rights of possession of Philippine real property. This is a new law and it is still unclear as to the procedures involved to implement it. Dual citizenship is now available for the following: Former Filipino citizens born in the Philippines , who have immigrated to another country and obtained citizenship of that country. Note: For former natural born Filipino Citizen, please visit the Philippine Embassy in your country for more information or to apply for Dual Citizenship.
Foreign Ownership as a Philippine Corporation Foreign nationals or corporations may completely own a condominium or townhouse. To take ownership of a private land, residential house and lot, and commercial building and lot, foreign nationals or corporations should form a Philippine corporation. The corporation is to be 40% foreign-owned (maximum) and 60% Filipino-owned (minimum), and with at least five [5] incorporators. Upon incorporation, a main bank account should be tied to it. A foreign national may be the sole person in the bank account, allowing him/her total control over the funds derived from the corporation and the income or sale of the asset or property.
Foreign Leasing of Philippine Real Estate Property A foreign national and or corporation may enter into a lease agreement with Filipino landowners for an initial period of up to 25 years, and renewable for another 25 years.
What are the bundle of rights of property ownership?
The bundle of rights theory inherent to property ownership are the right to use (Jus-Utendi), the right to enjoy the fruits of (Jus-Fruendi), the right to dispose (Jus-Disponendi), the right to abuse (Jus-Abutendi), the right to recover (Jus-Vindicandi), and the right to possess (Jus-Possidendi). The rights incident to ownership are, the right: - to enjoy and dispose of a property without other limitations than those established by law;
- to file action against third parties to recover ownership;
- to use force as may be reasonably necessary to repeal or prevent an actual or threatened unlawful invasion or usurpation of his property (Art. 429,
- the right to enclose or fence property - walls ditches, live or dead hedges - or by any other means without detriment of servitudes constituted thereon;
- to demand indemnity for damages caused to property;
- the right to compensation in the event of expropriation;
- the right to be restored to possession in case of unlawful dispossession;
- the right to the surface and subsurface of the land, right to construct thereon any works, plantation and excavation without detriment to servitude and subject to special laws and without right to complain of the reasonable requirements of aerial navigation;
- the right to hidden treasure;
- the right to accession and fruits of the property;
- the right to "quiet title" to real property or any interest therein.
What is the Steward Concept of property ownership?
The Steward Concept is a legal doctrine which holds that property ownership presupposes noncomittant obligations to the state and the community and that property is supposed to be held by the individual only as trustee for people in general; and that as mere steward, the property owner must exercise his rights to the property not just for his own exclusive and selfish benefit or interest but for the good and general welfare of the nation as a whole.
What is the Regalian Doctrine of property ownership?
A principle in law which means that all natural wealth - agricultural, forest or timber, and mineral lands of the public domain and all other natural resources belong to the state. Thus, even if the private person owns the property where minerals are discovered, his ownership for such does not give him the right to extract or utilize said minerals without permission from the state to which such minerals belong.
- CONSTITUTIONAL - such as police power, eminent domain or expropriation of private property for public use, taxation and escheat when revision of private property to state ownership in case of death of property owner without an heir;
- LEGAL - zoning ordinances, regulations on subdivision projects, building code, and other special laws and regulations; and
- CONCENSUAL/VOLUNTARY - easements and servitudes, usufructs, lease agreements, restrictions in subdivision and condominium deeds or restriction.
- Private Grant - such as in a voluntary deeds of sales of property;
- Public Grant - by administrative method of government such as in homesteads, free patent, etc;
- Descent - by hereditary succession or inheritance;
- Accretion - the process by which soil is deposited to lands adjoining rivers or flowing waters;
- Reclamation - the filling of submerged land by deliberate act;
- Adverse Possession or Prescription - the continuous, public and uninterrupted possession of a property for a period fixed by law;
- Voluntary Transfer - such as by execution of sale;
- Involuntary Alienation or Involuntary Grant - the process by which the land is taken against the consent of the owner. Examples are expropriation proceeding, execution of judgement, tax sales, and foreclosure of mortgage;
- Devise - the acquisition of land by a person through the will of the owner or the testator such as in donation;
- Emancipation Patent - the grant of agricultural land to tenant-farmers in the implementation of the land reform program of the government.
EASEMENT refers to a right of use over the property of another. Traditionally, the permitted kinds of uses were limited, themost important being rights of way and rights concerning flowing waters. The easement was normally for the benefit of adjoining lands, no matter who the owner was, rather than for the benefit of a specific individual. On the other hand, SERVITUDE is a burden imposed upon another. Servitudes are also classed as positive and negative. A positive servitude is one which obliges the owner of a servient estate to permit or suffer something to be done on his property by another. A negative servitude is one which does not bind the servient proprietor to permit something to be done upon his property by another, but merely restrains him from making a certain use of his property which would impair the easement enjoyed by the dominant tenement. It is stated in the law that a person has a right (easement) to impose a burden (servitude) upon another in cases provided for by law.
- Property is surrounded by other properties and there is no adequate exit to the public highway;
- payment of proper indemnity;
- the isolation was not due to owners own acts; and
- the right of way claimed is at the point least prejudicial.
Real properties includes land and all things immovably attached to it such as (Art. 415, NCC ):
- building, roads, and construction of all kinds adhered to the soil;
- trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;
- everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;
- statues, reliefs, paintings, or other object for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;
- machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building on a piece of land and which tend directly to meet the needs of the said industry or works;
- animal houses, pigeon houses, beehives, fishponds, or breeding places of similar nature, in case their owner has placed them or preserved them with the intention to have them permanently attached to the land and forming a permanent part of it, the animals in these places are included;
- fertilizer actually used on a piece of land;
- mines, quarries and slag dumps, while the matter thereof forms part of the bed, and water either running or stagnant;
- docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake or coast; and
- contracts for public works, and servitude and other legal rights over immovable property.
Steps and Procedure of Real Estate
Sale Documentation and Registration
1. Photocopy the document of sale like Deed of Absolute Sale.
2. Pay to update Real Estate Taxes as of date of document of sale.
3. Secure Tax Clearance from the Treasurer's Office after payment of taxes.
4. Preparation of BIR Form 1701-E (Individual Capital Gains Tax Return).
Requirements:
- Photocopy of Transfer Certificate of Title
- Photocopy of latest Tax Declaration
- Real Estate Tax clearance
- Original and Photocopy of Deed of Absolute Sale
- Certificate of No Improvement from the Assessor's Office if vacant lot.
- Payment for Capital Gains Tax and Documentary Stamps shall be in cash or in managers check, to be paid in the BIR Regional office where property is located.
- Capital Gains Tax shall be filed and paid to the BIR within thirty days from date of sale.
- Documentary Stamps shall be paid within twenty-four (24) hours after notarization of Deed of Sale.
5. Pay the Transfer Tax at the Treasurer's Office.
Requirements:
- Photocopy of Deed of Absolute Sale
- Photocopy of Transfer Certificate of Title
- Photocopy of Tax Declaration
- Photocopy of Real Estate Tax Clearance
6. Submit to the Registry of Deeds where property is located the following documents:
- Owner's duplicate copy of Transfer Certificate of Title
- Original Photocopy of Deed of Absolute Sale
- Certificate Authorizing registration from the BIR
- Payment of Capital Gains Tax and Documentary Stamps
- Photocopy of Real Estate Tax Clearance
- Photocopy of Tax Declaration
REMINDER: The owner or the broker as authorized by the owner should be the one to present the above documents to the Register of deeds because the new TCT shall be released only to the presenter of the above documents
7. Secure from the Assessor's Office a new Tax Declaration.
Requirements:
- Photocopy of the title, duly authenticated at the Assessor's Office
- Photocopy of Deed of Absolute Sale
- Real Estate Tax Clearance
8. Submit new Transfer Certificate of Title in the name of the buyer and new Tax Declaration to the buyer.
