Real Estate In Philippines

Owing Real Estate in the Philippines
By Nick Tan

Who doesn't want to retire in paradise? Whiling the days away in a land of sun-drenched beaches, palm trees, and a relaxed culture is a dream many aspire to. And the dream can be a made a reality by moving to an island in the Philippines. There is, however, the not-so-minor matter of owning the property you will live on.

Like many countries that emerged from colonial rule in the 20th century, the Philippines is sensitive about foreign acquisition of domestic assets, and has passed laws restricting land ownership to Filipino citizens. While this has prevented foreign mega-corporations from snapping up prime real estate, it has also made things a little complicated for individuals seeking to purchase property for their own personal use.

Nonetheless, expatriates - who are welcomed by the government - can become de facto owners of land in the Philippines. So how does it work?

First, consider the limitations. The law stipulates that foreign interests (be it individuals or corporations) may not own more than 40 percent of Philippine land.

But for most individuals, owning 40 percent of a plot of land is not good enough; you want to control all of your land. So how do you get your hands on the remaining 60 percent?

The most common way around this problem is to put the property in the name of your spouse, partner, or friend. In particular, many male expats put their real assets into the names of their Filipina wives and girlfriends. While doubtlessly easy and quick, this is not a wise option to pursue. Quite often, couples or friends end up on bad terms, due to cultural differences, communication problems, or simply mutual incompatibility that wasn't apparent at first (especially since many couples nowadays tend to meet via the Internet).

When problems arise, the foreign party is left at the mercy of the Filipino party, which legally controls the property. You might end up losing your wife, your house, and a place to stay all in one go. Hence I do not recommend putting the property in your partners name unless you have been married for at least ten years.