The Land Registration Act requires the owners of property to register titles with the Registry of Deeds. The titles must be registered in the same province as the property. Land that is leased must be recorded in the Registry of Property.
Leases usually are between three and five years with option periods then available. Rents are pesos per square meter. Two to three months in advance rents are usually paid. Included in the tenant’s monthly rent is a charge for their share of the common space.
1. Board of Investments
One-Stop Action Centers - US Office
Philippine Center Bldg., Suite 516
447 Sutter St.
San Francisco, CA. 94108, USA
Tel : [1] (415) 433-6666
2. Bangko Sentral ng Pilipinas (BSP)
(Central Bank of the Philippines)
A. Mabini Street, cor. Vito Cruz Street
1004 Malate, Metro manila, Philippines
Tel : [63] (2) 507-051
Fax : [63] (2) 522-3987
3. Department of Environmental and natural Resources (DENR)
DENR Bldg.
Visayas Avenue
Diliman
Quezon City, Metro Manila, Philippines
Tel : [63] (2) 976-626/9
Fax : [63] (2) 963-487
4. National Economic and Development Authority (NEDA)
NEDA Bldg.
Amber Avenue
1600 Pasig, Metro Manila, Philippines
Tel : [63] (2) 673-5031
Fax : [63] (2) 631-3747
5. Philippine Economic Zone Authority (PEZA)
4th FL.,Legaspi Towers 300
Roxas Boulevard
Metro Manila, Philippines
Tel : [63] (2) 521-9725
Fax : [63] (2) 521-8659
Ownership of land by foreigners is allowed but only up to 40%. The other 60% must be owned by Philippine citizens or corporations. This is clearly stated in the Constitution. Both locals and foreigners are able to lease public and private land. Foreigners may be able to obtain a lease up to 75 years.
Foreigners are guaranteed by the current government of just compensation if a taking occurs for a public use. The government is trying to attract foreign investment in commercial projects and does not want foreign companies to worry about their investment. The Philippines is a member of both the Multilateral Investment Guarantee Agreement (MIGA) and the Overseas Private Investment Corporation (OPIC). Membership in these groups ensures foreigners that their investments are safe in the Philippines.
Three areas are examined concerning property relations between a husband and wife: whether any agreements were reached before the marriage, the provisions of the Family Code, and local custom.
Title & Contracts in Philippines
A written deed must be used to convey land. The names of the parties involved, their addresses, and their citizenship must be clearly stated. If a wife or husband is alive, these names must also be stated. Deeds must be recorded in Register of Deeds.
Upon death, property succeeds to the descending direct line. In the case of children and the property of their parents, no distinction is made for age, sex, or if they come from different marriages.
The Land Registration Act requires the owners of property to register titles with the Registry of Deeds. The titles must be registered in the same province as the property.
Legal requirements for the sale of real property are covered in many different pieces of legislation such as Republic Acts 4882, 2747, 2938, and 3135. A foreign company is not allowed to purchase real estate except in cooperation with a local company.
A lease may be recorded in the Registry of Property. The lease is not binding to third parties unless it is recorded. If a lease is for one year or longer, it must be in writing according to the Statutes of Frauds.
The elements of a contract include; consent of the parties involved, subject matter of the contract is clearly defined, and cause of the obligation is clearly established. The person who makes the offer is able to set the time, manner of acceptance, and place. All three of these must be complied with. The acceptance of a contract can be either expressed or implied. Upon death, an offer becomes void. Minors and mentally handicapped individuals can not give consent.
Property Taxes:
Property is taxed in two different ways. There is a real property tax and a community tax. These tax statutes were passed by Congress and approved by the President and are included in the National Internal Revenue Code (NIRC) of 1987. The real property tax is an annual ad valorem tax that is based on an assessed value. This figure is determined by calculating the market value of the property and then multiplying by a predetermined assessment level. According to Price Waterhouse, the real property tax rates for 1992 are as follows :
A = Residential
B = Commercial
C = Agricultural
D = Timberland
Assessment Level (%)
A B C D
Land 20 50 40 20
Buildings
175,000 and under 0 30 25 45
175,001 to 300,000 10 30 25 45
300,001 to 500,000 20 35 30 50
500,001 to 750,000 25 40 35 55
750,001 to 1,000,000 30 50 40 60
1,000,001 to 2,000,000 35 60 45 65
2,000,001 to 5,000,000 40 70 50 70
5,000,001 to 10,000,000 50 75 50 70
10,000,001 and over 60 80 50 70
The community tax is an annual tax that begins at P5 for individuals and P500 for corporations. This tax is then graduated on the basis of real property owned and gross earnings. P5,000 for individuals and P10,000 for corporations are the maximum amounts that would have to be paid with this tax.
Two types of mortgages exist; real estate and chattel. A real estate mortgage should be recorded in the Registry of Deeds. A one page form is sufficient for this document. Foreclosure occurs in the Regional Trial Court of the province where the land is located.
Chattel mortgages are recorded in the Chattel Mortgage Register to ensure the performance of the obligation. A one page form for this mortgage is sufficient. Foreclosure either by judicial, extrajudicial, or ordinary action is allowed for the repayment of debt secured by a chattel mortgage.
No large market exists to deal in or finance the purchase of real estate. The local developer usually has to provide his own cash. Foreigners need to either provide their own cash or obtain financing from sources outside the Philippines.
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