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Can A Foreigner Buy Land In The Philippines?

Can A Foreigner Buy Land In The Philippines?



Disclaimer


This is not legal advice. It's just me giving you a window in to my thinking as I attempt to understand what Philippine laws mean to me, as an expat in the Philippines. 

Everyone Knows That Foreigners Cannot Buy Land In The Philippines


Almost as soon as the thought of buying land in the Philippines enters your head the fact that you are barred from doing so follows either from a quick Internet search or from asking a friend, relative or acquaintance who is informed on the subject. You would be hard pressed to find a foreigner in the Philippines who is not aware of this fact. This post is my attempt to wade through the laws that establish this truth that just about everyone knows. 

The Law


Article 1491 item (6) of the Civil Code of the Philippines is the catchall exclusion barring foreigners from buying land in the Philippines:
Art. 1491. The following persons cannot acquire by purchase, even at a public or judicial auction, either in person or through the mediation of another:

     (6) Any others specially disqualified by law. (1459a)

Who Is Disqualified by Law?


Article 1491 directs us to other legal sources for the definitive answer on who is "disqualified by law" from purchasing land in the Philippines.

For that answer we look to Article XII of The 1987 Constitution of the Republic of the Philippines and WHO IS QUALIFIED.

 The 1987 Constitution establishes who is qualified to enter into certain land agreements with the State:
Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least sixty per centum of whose capital is owned by such citizens. Such agreements may be for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and under such terms and conditions as may be provided by law. In cases of water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.
 Define the term "alienated/alienable":
Alienable

 An interest in property is alienable if it may be conveyed by one individual to another individual. In general, and by common law, private property is alienable. The classical restraint on alienation was the fee tail, which required its owner to pass the property (usually land) to his heirs. A more familiar restraint is that on human organs. 
Simply put, alienate means to sell. Thus, the government of the Philippines may enter into into agreements to sell or lease agricultural land, as agricultural land is the only exception to the non-alienation clause, and it may lease any other classification of land.

And who may enter into such land agreements with the Philippine Government:
  • Filipino citizens and
  • corporations and associations that are at least 60% owned by Filipino citizens
Foreigners are excluded from who may enter into such land agreements with the Philippine Government unless they are part of a corporation or association that is at least 60% owned by Filipino citizens.

 Section 3 puts a finer point upon precisely who may purchase and or lease public land:
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands and national parks. Agricultural lands of the public domain may be further classified by law according to the uses to which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.
Whereas Section two was ambiguous about who could lease and who could buy land from the government, the statement from Section 3:
Private corporations or associations may not hold such alienable lands of the public domain except by lease.
establishes the fact that corporations or associations may lease, but not buy public lands.

And this statement, also from Section 3:
Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof, by purchase, homestead, or grant.
establishes the fact that Filipino citizens may lease or buy public land within stated limitations.

The 12 hectare purchase limit in the paragraph above does not contradict the Comprehensive Agrarian Reform Program (CARP) that came later. The 1988 CARP Law caps landholdings at 5 hectares, but the cap is specific to land classified as agricultural.

 And the final answer to who may buy land in the Philippines is summed up in Section 7 of Article XII:
Section 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain.
Only those who are qualified to hold i.e. lease or buy public lands are also qualified to buy private lands and Sections 2 and 3 established that to be:
  • Filipino citizens and (may lease or buy)
  • corporations and associations that are at least 60% owned by Filipino citizens (can only lease public land but may buy private land)
Therefore, in light of Section 7, only Filipino citizens and corporations and associations that are at least 60% owned by Filipino citizens may buy private lands in the Philippines. If that is not you, then you cannot buy land in the Philippines.

Next Steps


Remember the statement from Section 7: "Save in cases of hereditary succession." It is a very important exception, as "can a foreigner own land" is a very different question from "can a foreigner buy land" and it is addressed in another post titled Foreigners Can Own Land In Philippines Through Hereditary Succession.

Also check out the article Can An Expat Lease Land From His/Her Filipino Spouse?. 


Smoke Free Philippines!

Smoke Free Philippines!





I Grew Up With Tobacco 



Where I grew up every boy held three things in the highest esteem: his baseball glove; his bike; and his Skoal.

I was dipping before my tenth birth day. I began dabbling in tobacco much earlier than that. By 16 I was a pack-a-day Camel smoker. At 18 I switched to Marlboro Reds.

In my early twenties I woke up to the mind control that Big Tobacco was using on me. I kicked the habit and have hated tobacco with a passion ever since.

I now find the smell of tobacco to be sickening and it bothers me when someone thinks that they have the right to pollute my family's air when we are in some public place or on a bus. 

Philippines Has Had Anti-Tobacco Laws For Decades


RA 8749, also known as the Clean Air Act, was passed in 1999 and made it illegal to smoke inside public buildings and public transport. Even so, I cannot count how many times I have seen people smoking in jeepneys and on buses.

RA 9211 made it illegal for minors to buy tobacco products and for businesses to sell tobacco products to them. Even so, I see have young kids smoking near our place and elsewhere for years. Only a couple of months ago I was at a store when a shoe-less little girl entered. Her father had sent her to purchase a hand full of single cigarettes. She could not have been much more than five years old - if even that.

Executive Order No. 26


In 2017 Executive Order No. 26 was signed with the intent of creating a smoke free public environment nationwide.

Section 4(2) of EO No. 26 states that any designated smoking area must be no less than "ten (10) meters from any entrances, exits or any place where people congregate or in front of intake ducts" including but not limited to:
  • Government buildings
  • Public and private educational facilities
  • All places of work 
  • Food and drink establishments 
  • Hotels and other accommodation facilities 
  • Public and private health facilities 
  • Transportation terminals 
  • Churches 
  • Malls, shopping centers and retail stores 
  • Entertainment establishments 
  • Sports venues 
Some of the specific prohibitions from Section 3:
(a) Smoking within enclosed public places conveyances, whether stationary or in motion, except in DSAs fully compliant with the requirements of Section 4 of his Order; 

(b) For persons-in-charge to allow, abet or tolerate smoking in places enumerated in the preceding paragraph, outside of DSAs fully compliant with Section 4 of this Order;

(c) For any person to sell, distribute or purchase tobacco products to and from minors. It shall not be a defense for the person selling or distributing that he/she did not know or was not aware of the real age of the minor. Neither shall it be a defense that he/she did not know nor had any reason to believe that the cigarette or any other tobacco product was for the consumption of the minor to whom it was sold;

(d) For a minor to smoke, sell or buy cigarettes or any tobacco products;
Of particular interest is "b" above. Paragraph "b" makes persons-in-charge of public buildings and private businesses responsible to ask smokers to stop smoking in non designated areas and to report those who continue to violate the law:
Section 6(b) Persons-in-charge who knowingly allow, abet, authorize or tolerate the prohibited acts in Section 3 or who otherwise fail to fulfill the duties and obligations in Section 5 hereof.

Section 5(g) requires persons-in-charge to first warn smokers to stop and if they refuse to stop then they must be reported to the nearest city/municipal Health Office, police officer or member of the Smoke Free Task force.
A Smoke Free Task Force (SFTF) is to be created by each city/municipality. The SFTF may perform stings on businesses suspected of selling tobacco to minors and they also may roam around in plain clothes making sure that smokers are respecting non-smoking areas and citing those who break the law.

The Bottom Line


Since the passing of EO No. 26 I have been reading about and hearing about its implementation in numerous localities. At last it is being implemented in our own municipality. The rude loitering smokers billowing toxic fumes in your face when you exit any building have vanished. The kids buying cigarettes have disappeared. It is a very real and very welcome change.

I support the right of smokers to give themselves cancer in the privacy of their own homes, but they have no right to make the rest of us share their fate.

Public smoking is an extremely rude and selfish act. It is like spitting on people. You might catch something from being spit upon, but we know for a fact that second-hand smoke causes cancer and kills people. It also gets kids who grow up around it hooked for life.

I consider the implementation of Smoke Free Municipalities to be a very positive step and a giant leap into civilization.

Buying Land In The Philippines Part 3: BIR Taxes

Buying Land In The Philippines Part 3: BIR Taxes
Posts In This Series:

Disclaimer

This is the third part in the series about buying land in the Philippines. As always, nothing you read here is to be taken as legal advice or professional guidance. This is our personal experience that we are sharing with you. So caveat lectorum.

Table of Contents:

    Capital Gains Tax


    The Bureau of Internal Revenue (BIR) web-page regarding the Capital Gains Tax states:
    The Capital Gains Tax Return (BIR Form No. 1706) shall be filed and paid within thirty (30) days following the sale. Therefore, it is important to get that tax paid ASAP after you execute notarization of the DoAS.
    The BIR web-page states that it is the seller/transferor who files the Capital Gains Tax Return. You must work out with the seller/transferor the specifics of which one of you pays this tax. Many times it is the buyer who ends up paying it. In our case it was us, the buyer, who filed with the BIR and paid the taxes. That was the deal that we worked out with the seller, who is related to us.

    As stated on the BIR web-page, the capital gains tax rate for real property is a flat 6%. The tax is assessed on the higher of: sale price, fair market value, or zonal value. The basis of the tax is the gross amount of the higher of those three values.

    Documentary Requirements For Capital Gains Tax Filing


    Two copies of each of the following:
    • Taxpayer Identification Number (TIN) of Seller/s and Buyer/s
      • Those with no TIN must submit Form 1904 with the following:
        • Original/Photocopy of NSO Birth Certificate or photocopies of any two (2) government issued IDs that show name, address and birth date
        • If married attach a photocopy of the marriage contract
        • Photocopy of the Deed os Sale
    • Notarized Original Deed of Absolute Sale/Deed of Transfer
    • Certified True Copy/ies of the latest Tax Declaration
      • From Municipal Assessor’s Office in the municipality where the property is located
    • Certified True Copy/ies of Original/Transfer/Condominium Certificate/s of Title (OCT/TCT/CCT)
      • From Registry of Deeds
    • Certificate of No Improvement
    • From Municipal Assessor’s Office
    • Validated return and Original Official Receipt/Deposit Slip as proof of payment; for no payment return, copy of Acknowledgment Receipt of return filed thru eBlRForms
    • Acknowledgment receipt of proceeds of sale from the seller
    • Notarized Original Special Power of Attorney (SPA) if the person signing is not one of the parties to the Deed of Transfer
    • Other documentation may be required.

    Documentary Stamp Tax


    The BIR web-page regarding the Documentary Stamp Tax states:
    The return shall be filed within five (5) days after the close of the month when the taxable document was made, signed, issued, accepted or transferred or upon remittance by revenue collection agents of collection from the sale of loose documentary stamps. In my understanding this means that if you execute your DoAS on the last day of the month, then you only have five days to file the Documentary Stamp Tax Declaration Return.
    As stated on the BIR web-page under Tax Rates - Tax Rate Code 196, the capital gains tax rate for real property is a flat 1.5%. The tax is assessed on the higher of: sale price, fair market value, or zonal value. The basis of the tax is the gross amount of the higher of those three values.

    Processing And Certificate Authorizing Registration


    Once you have all required documents gathered and organized proceed to the BIR. BIR will verify that your documents are in order and tell you what additional documentation is required if any. When the BIR accepts your documents for review it may take a day or a few days for them to get back to you depending upon their work load.

    When the document review is complete BIR will notify you to report to their office so that you can pay the taxes due. You will then proceed to the approved bank to pay. You will present your receipts of payment to BIR and then you will wait a day or two (maybe more) for final approval.

    When your case is approved with the BIR you will receive the Certificate Authorizing Registration (CAR) from the BIR. The CAR is part of the documentation that is submitted to the Department of Agrarian Reform (DAR) and to the Land Registration Authority (LRA) in the final steps required for titling.

    The Bottom Line


    In addition to the Capital Gains and Documentary Stamp taxes that are paid to the Bureau of Internal Revenue (BIR) there is also annual real property tax that is assessed by the Municipal Assessor's Office. It is important visit the Municipal Assessor's Office before buying a property to check for delinquent annual real property taxes, as suggested in Part 2.

    Once you execute the notarization of your DoAS You have thirty (30) days to file a Capital Gains Tax Return. A Documentary Stamp Tax Declaration Return must also be filed within five (5) days after the close of the month when the taxable document was made.

    Is the Philippine Senior Citizens' Discount For Foreigners Too?

    Is the Philippine Senior Citizens' Discount For Foreigners Too?

    This post will not go into detail about what the privileges of senior citizens are because it is pointless, as those privileges are off limits to non-citizens. 

    The purpose of this article is to explain the pertinent sections of the referenced laws so that foreigners living in the Philippines do not make the mistake of violating the law in attempting to avail of benefits to which they are not entitled.     

    Who Is A Senior Citizen Under The Law? 

    Republic Act 9994 also known as the Expanded Senior Citizens Act of 2010 amends Republic Act 7432 also known as the Expanded Senior Citizens Act of 2003. Section 3 of RA 9994 defines the term "senior citizen" under the law:

    (a) Senior citizen or elderly refers to any resident citizen of the Philippines at least sixty (60) years old;
    That statement alone is very clear. It pertains to CITIZENS of the PHILIPPINES. 

    You might be a senior and you might also be a citizen of some country, but if you are not a citizen of the Philippines, then you are not a senior citizen as defined by RA 9994.

    Under the Implementing Rules and Regulations of RA 9994 (same page as RA 9994 appended to the end):

     Rule III Article 5 further defines who is an eligible "senior citizen" under the act:
    5.1 SENIOR CITIZEN OR ELDERLY - refers to any Filipino citizen who is a resident of the Philippines, and who is sixty (60) years old or above. It may apply to senior citizens with "dual citizenship" status provided they prove their Filipino citizenship and have at least six (6) months residency in the Philippines.

    This paragraph leaves no room for interpretation. If you are not a Filipino citizen, then you are not eligible.

    Who Can Legally Issue A Senior Discount Card? 

    Rule IV details who issues the Senior Citizens' ID/Benefit Card:

    Article 6. OSCA-issued Senior Citizens' Identification Card. - For the availment of benefits and privileges under the Act and these Rules, the senior citizen, or his/her duly authorized representative, shall present as proof of eligibility, a valid and original Senior Citizens' Identification Card issued by the Head of the Office of Senior Citizens Affairs (OSCA) of the place where the senior citizen resides, and which shall be honored nationwide. 
    In the past many foreigners may have been given discount cards by various municipal and or barangay officials. These cards are not valid. The person who issues such a card is violating the law simply by issuing the card, as the law is clear as to who gets one. This is not a discretionary matter.

     Under Rule VII Penalties and other Sanctions:
    Article 24. PENALTIES - Any person who refuses to honor the senior citizen card OR violates any provision of the Act and its Rules shall suffer the following penalties

    Punishment For Those Who Illegally Benefit From The Senior Discount 

    ANY person who violates ANY provision of RA 9994 and its IRR shall be subject to:

    Section 3. Any person who abuses the privileges granted herein shall be punished with a fine of not less than fifty thousand pesos (Php 50,000.00) but not more than One hundred thousand pesos (Php 100,000.00) and imprisonment of not less than six (6) months.

    Section 4. If the offender is an alien or a foreigner, he/she shall be deported immediately after service of sentence without further deportation proceedings.

    Those foreigners who continue to take advantage of the senior citizen discount are violating the law. Their luck will run out eventually. Is it worth it?

    Maybe the nice person trying to "help" you by giving you a discount card is trying to get you into trouble so you need to pay a bribe to get out of trouble.

    Rumors About Changes To The Law Are Not Facts 

    There are many rumors that go around about changes to the law, but you need to stop listening to rumors and learn first hand about the active law for yourself.
    Like the United States, the Philippine Legislative Branch is bicameral. Therefore, a bill must be passed by both the Senate and the House of Representatives. It must then be signed by the President. The President can veto the bill and then the House can overturn the veto by a 2/3 vote in favor. Conversely, if the President does not act on the bill, then it automatically becomes law after 30 days. 

    Senate Bill 2832 from 2018 is the document that a lot of websites are pointing to and saying foreigners can have the senior discount. This bill never passed the Philippine House AND Senate and it was never signed into law by the President. After a bill becomes law Implementing Rules and Regulations must then be promulgated. Senate Bill 2832 never became a law. 

    The rumors about foreigners being eligible for senior citizens' benefits get started because someone hears about a bill that is being voted on. But no such bill has been passed to overturn RA 9994 and until that happens we are under the rules listed therein. 

    The Legislative Process Of The Philippines  

    The Bottom Line 

    If you are a foreigner who is married to a person who is:

    • a Filipino citizen or 
    • they are a dual citizen of the Philippines and some other country (Rule III Article 5 of the IRR) 
    and 
    • that person is at least sixty (60) years old and 
    • has at least six (6) months residency in the Philippines

    then your spouse may be eligible for the senior citizen benefits. But you are not. Not yet anyhow.

    Follow the law and engage in due diligence to know and understand the laws as they pertain to you as a guest living in the Philippines. It is not worth risking a fine, jail and deportation just to get a 20 peso discount at McDonald's. 

    But even if no one ever gets the book thrown at them isn't it better to just do right?

    How Do You Find God?

    How Do You Find God?


    Through logic?

    Through evidence?

    What does the Word of God say? 

     The Just shall live by faith. Not by evidence. Not by logic.

     We walk by faith not by sight.

    Without faith it is impossible to please God.

    There will always be a gap between the evidence and Biblical truth.

    Faith will always be the only bridge for that gap.

    When you reject faith and look instead to the world and science for an answer you will find an answer.

    You will find a wrong answer, because:

    “There Is A Way That Seems Right To Man…” 


    That is how God has designed the world and your life.

    You simply must take the leap of faith and believe what God has said in His Word.

    There is no other way to please God or to find God.

    When you are a believer and you have faith everything is evidence of God.

    Conversely, when you are lost nothing is evidence of God.

    Faith is required for salvation and to restore you to God.

    Proof destroys that. If there was real proof of God to be found through science or logic, then faith would not be required. The gap would be bridged by iron clad facts.

    But that is not the reality we live in.

    Faith And Faith Alone Pleases God 


    And that faith begins with rejecting humanistic reasoning and accepting God at His Word in those things that seem impossible.

    Faith in man’s devices, in your own devices, will never please God and can never find God’s truth.

    To the saved person the logic gap in God’s account is an opportunity for faith.

    To the lost it is a stumbling block.

    Do not stumble in your faith.

    There is an internal struggle that takes place when we are at the precipice of one of these very important Biblical assertions that seem to make no sense. Our human understanding wants to search for a way to make the pieces fit. 

    When you find your self at one of those places just remember that faith is required. 

    Stop looking for secular answers to insert in between what the Bible says or in place of what the Bible says. 

    Insert faith instead.

    Just believe God. 

    Buying Land In The Philippines Part 2: Deed of Absolute Sale

    Buying Land In The Philippines Part 2: Deed of Absolute Sale





    Posts in This Series:

    Disclaimer 

    This is the second part in the series about buying land in the Philippines. As always, nothing you read here is to be taken as legal advice or professional guidance. This is our personal experience that we are sharing with you. So caveat lectorum.

    Preparations Before Creating A DoAS


    First, I need to be certain that the person(s) selling the land actually has/have the full and legal right to do so. Are they the owner? Do they have legitimate Special Power of Attorney (SPoA) to act on behalf of the owner(s)? Are they one owner among many with the other owners being clueless about our pending deal? You better know before you find out the hard way.

    As stated in Part 1, you may obtain a copy of the approved survey map from the Land Management Bureau (LMB) and a copy of the land title from the Land Registration Authority (LRA). Obtain and study these documents before you agree to or sign anything.

    Second, I need to know if there are any right-of-way (RoW) issues with the land. These can usually be found drawn on the map and annotated on the title. Sometimes they only appear as a title annotation. Sometimes they exist only as an understanding between the landowner and those who believe that they have the RoW. In such cases, you as the new land owner might find yourself in a touchy situation with people who believe that they have a right to cross or otherwise occupy some part of your land and they just might have a case. So be careful in this respect.

    Third, I need to know if there are any liens or encumbrances on the title. These should be noted on the title itself.

    Fourth, I really need to know if there are any future road widening or other public works projects that might impact the land I am interested in buying. You could end up buying a property with a house on it that gets demolished for the road widening. It happens.

    Fifth, before I sign on the dotted line I want to know if the property has delinquent municipal taxes. You can discover delinquent taxes by checking with the Municipal Assessor's Office. You will also discover the name of the person who has been paying the taxes.

    There are probably a lot of other things that I cannot think of at the moment, but the last thing that I would check up on is whether or not the land has an agricultural tenant. This caveat pertains to agricultural land of course. In the course of buying the land you are required to file an Affidavit of Non-Tenancy with the Department of Agrarian Reform (DAR) in order to obtain a DAR certificate that is required by the LRA for titling. This affidavit is obtained from the local Barangay Captain.

    If you get to that point and find out that there is a tenant the bad news is that you have probably already spent a lot of time and money.

    To be certain that there is no tenant there are steps that can be taken. First, just ask the seller. In addition, it is imperative to make a personal inspection of the property and I have to say this because some people do buy site unseen. The tenant will be living on the property in their own house and tending the land.

    Drafting The DoAS


    If no survey was necessary, then the land buying process begins with the Deed of Absolute Sale (DoAS). If a survey is necessary or if the buyer wants to do a relocation survey as a precaution/precondition, then the DoAS might be prepared before, during or after survey completion - depending upon individual circumstances. The buyer or seller may prepare their own DoAS and have it notarized or they can pay an additional fee to their attorney who can prepare the document and notarize it. You can check our earlier post on Notaries in the Philippines for suggestions on finding an attorney to notarize your documents and I have also provided a example Deed of Absolute Sale.

    The fact that the lot is untenanted should be noted on the DoAS, as it is on the sample I provided a link to above. I also have a sample of the Affidavit of Non-Tenancy.

    When we drafted our DoAS we placed my name as "married to" my spouse who is listed as the buyer. This is done even though I, as a foreigner, cannot buy the property. When the title is created by LRA the owner will be listed exactly as buyer is noted upon the DoAS complete with my name as "married to" the buyer. This is important for compulsory heirship purposes briefly mentioned in Part 1 and which will be mentioned again in the future.

    Within the first line of the fourth paragraph of the sample DoAS you may notice the "Psd-xx-xxxxxx" item. This is the Subdivision Plan number that is assigned by LMB when the plan is approved at the end of the survey process. You can make a deed of sale before the survey is totally complete but your deed of sale will not contain a perfect and complete description of what you are buying without the Psd# and also the Technical Description that is also produced in the latter end of the process. You may be able to get the Technical Description earlier from your surveyor, but the PSD# will not be available until final approval of LMB. It would be best to wait until everything is finished and final just to be sure that nothing will change. Again, this is just our experience and your mileage may vary.

    Note that all concerns I mentioned previously such as liens, encumbrances, tenancy are disavowed (or affirmed as the case may be) within the text of the example Deed of Absolute Sale. It would be nice if this was a 100% guarantee that nothing unexpected can crop up, but nothing is guaranteed 100%?

    Special Power Of Attorney And Taxation


    At some point in the process you might find yourself in need of obtaining or assigning power of attorney. We used Special Power of Attorney (SPoA) when my wife processed land as the buyer on behalf of a relative. I have included an example of the Special Power of Attorney document that we used.

    One final item that I want to mention before closing this post is taxation. This can bite you. The next step in this process will be a trip to the Bureau of Internal Revenue (BIR) where you will pay taxes due. You must act quickly to get these taxes paid because you may have as little as five days to do so or you may have to re-execute your DoAS. Taxation and more will be detailed in Part 3.

    Buying Land In The Philippines Part 1: Survey and Subdivision

    Buying Land In The Philippines Part 1: Survey and Subdivision





    Posts In This Series:

    Disclaimer

    This post has been a long time coming and a long time dreaded due to the complexity of the issue. I feel that the series of posts that will develop on this topic will become a cornerstone of this website, so I want to make sure that I get it done right and complete as possible. As always, nothing you read here is to be taken as legal advice or professional guidance. This is our personal experience that we are sharing with you. So caveat lectorum.

    Table of Contents:

      Only A Filipino Citizen Can Legally Buy Land In The Philippines


      There is the possible exception of hereditary heirship through being a compulsory heir, whereby a foreign spouse might obtain title to real estate. That is a topic with which I have no personal experience. I can tell you that a competent and trusted attorney might be necessary.

      Condominium ownership is not an exception to the land ownership rule because, as the foreign owner of a condo you would not typically own any land.

      Therefore, this post and subsequent posts in this series assume that you are Filipino or that you are the spouse of a Filipino.

      Exercise Caution When Buying Land


      It is of utmost importance to begin by making certain that the person selling the land a) has a legitimate and unencumbered title and b) is the person named on the title OR has been given proper and legal power of attorney to act on behalf of the person whose name is on the title. If I could not guarantee myself of those facts I would WALK AWAY.

      Any person can obtain a copy of the approved survey map from the Land Management Bureau (LMB) and a copy of the land title from the Land Registration Authority (LRA). You must provide the name of the owner, the lot number and the location of the lot. Then fill out the application and pay the fee. This is public information that you should obtain before moving forward so that you can be sure that you are buying an unencumbered lot with a clear title from the person who has the legal right to sell it.

      I would also check to see whose name is listed as paying the yearly taxes with the Municipal Treasurer's Office. You can also get this information from the tax receipt. The tax receipt will show the owner of the property and it will also show the name of the person who has actually been getting credit for paying the taxes. Be cautious if someone other than the owner of the property has been paying taxes. This could indicate that there is or may arise a dispute in ownership. There can be legitimate reasons for a party other than the owner to be paying taxes on the property, but one must be sure to know the details and if necessary consult with an attorney.

      Are You Sure You Want To Subdivide?


      When you settle on a parcel of land that you like and a seller you trust you might find yourself at a couple of different starting points in the buying process. It is most convenient to begin with a developer or a private seller who is offering a lot or house and lot that does not need to be surveyed/subdivided.

      However, in other cases you will need to have land surveyed and subdivided into separate lots. Many land owners in the Philippines are "land poor." They own much land, but they have no cash, so you as the buyer will have to bear all expenses. This means that you will need to pay the survey and subdivision costs (among many other costs associated with the titling process).

      My wife and I have been through this survey and subdivision process twice and the titling process for three different lots.

      Selecting A Land Surveyor


      If you are paying for the survey you need to find a geodetic engineer that you trust to execute the survey. You can verify that a surveyor's license is current through the Online Verification System of the Professional Regulatory Commission. You can verify them by license number or by name. If you choose to verify by name first select "Geodetic Engineer" from the "Profession" drop-down box. Next type in the complete first name and not just the initial followed by the last name. I get a successful record return on my engineer, but if yours does not show up, then try it by license number.

      Contract And Scope Of Work


      Once you settle on a surveyor that you like you will need to nail down the price and get a contract that details exactly what you will pay and exactly what the deliverables to you will be. This contract will also detail schedule of payment(s) and timeline of deliverables.

      You can view my sample surveyor contract that I created as a template based upon our actual contract.

      Relocation Survey


      Note "Relocation Survey" In the sample contract under the Scope of Work and Quotation sections. Quite frequently and for numerous reasons someone or something may have moved, removed or otherwise destroyed one or more cornerstones. For this reason the surveyor may advise you to execute a Relocation Survey. This is done to set in place all monuments in their proper locations. If you do not do this before executing the subdivision survey, then you run the risk of later finding out that your lot is encroaching a neighboring lot or their lot is encroaching yours. It is a very good idea to have a Relocation Survey done.

      Placement Of Cornerstone Monuments:

      The image above shows our fence inside the cornerstone. The property line is in the middle of the cornerstone, so you can see that the fence column is also inside the boundary.

      These concrete monuments are cylindrical, 4" in diameter, 2' long and weigh about 30 pounds. They cost roughly 40PHP. Not all places that manufacture concrete blocks make these monuments, but you can check with one of them and they probably know who does.

      Survey Cost And Payment Schedule


      When we had our first subdivision survey done close to ten years ago the common price was 5,000PHP per lot surveyed. A few years later we paid 8,000PHP. I have heard that the price is now up to 10,000PHP. The relocation survey will be a bit less. If you are subdividing a lot into two then that is two surveys that you are paying for; if dividing into three lots that is three surveys and so on. You may be able to get a better price deal depending on where the survey is performed and who performs it. Just be careful and read the end of this post.

      Typically, you will pay 50% when you accept and sign the surveyor's proposal; 25% when they complete the map and have buyer and seller sign it; and then the remaining 25% when the final LMB approved map is delivered to you.

      Requirements For Map Approval


      Basic Requirements for map approval and registration with LMB:
      • Original Deed/Instrument 
        • If you do not have the original Deed/Instrument, then you will have to provide an affidavit explaining the reason why it is not available.
        • Owner’s copy of the Certificate of Title and all issued co-owner’s copies if any. 
        The two items above are provided by you to the surveyor who submits them to LMB.

         All subdivision/consolidation transactions require the following documents aside from the basic requirements:
        • The following items are created by the surveyor who then submits them to LMB: 
          • Letter Request for Subdivision/Consolidation
          • Original Technical Description (duly approved)
          • Sepia or polyethylene film of the Plan duly approved by Land Registration Authority or the Land Management Bureau
          • Blue print copy of the Subdivision Plan
          Note: For clarification, the Sepia and Technical Description refer to the mother lot. There would be no duly approved Plan or Technical Description for the Subdivision Plan at this point in the process. You can provide these to the surveyor if you have them, but the surveyor can get them from LMB.
          • The following items are provided by you to the surveyor who submits them to LMB:
            • Real Estate Tax Clearance 
          Obtained from the Municipal Treasury Office where the property is located and shows that there are no delinquent taxes on the property. Our surveyor asked us for a Tax Declaration and Tax receipt for the most recent tax year, which together served the same purpose as a Tax Clearance.

            Survey Deliverables


            At the end of this process we received three deliverables from the surveyor: Sepia copy of Subdivision Plan; Blueprint copy of Subdivision Plan; Technical Description of Subdivided Lot(s).

            Nine months passed from the commencement of the survey until we received our deliverables. That was for our second survey. The first time we went through the process for another lot it took years to get our approved map.

            The Bottom Line


            A licensed surveyor is motivated by the fact that he can lose his license. Do not hire an unlicensed engineer. Shop around for a geodetic engineer, check their license and note their business office or lack thereof. Use your better judgment in picking the right team for the job.

            The easy option is to just buy a complete lot that will not be subdivided or has already been subdivided. Usually, if you are going through the headache of the subdivision process it is for a good reason that makes it your best option, despite being a hassle.