You Can’t Own the Land, But You Can Own The Improvements!
When I wrote ‘Philippines Property Primer’ some years ago, I started the text by stating very clearly that a foreigner can’t own land in the Philippines. Throughout the numerous updates the book has enjoyed, that point has never once changed. You can’t own land. That’s the dirt on which the house is built. But you can own the house!
What’s An Improvement?
An improvement is anything added to the land. It is a fence, wall, driveway, outhouse, home, shed, garage, whatever. Anything that adds to the property is an improvement, even if it looks like it is about to collapse and is made from scavenged materials. While a non-citizen can’t own the land on which the improvement rests, they can own the improvement. It might get you out of a bind if you inherit the family home after her untimely demise. How’s that?
Simple. Your asawa owns a block of land, known as a Lot. If there is a building on it, they call that ‘house and lot’. You can’t own it but you can inherit it if she dies and bequests it to you in her Will, but good luck with that. If a relative disputes this you will lose the property to them most likely. There is a contradiction whereby one law says you can inherit land, but another says you can’t own land. Yes, it’s complicated and I am not a lawyer. Suffice to say there are ways around this.
Leases, Caveats, Liens
Most foreigners will not outlive their often younger spouses. I do know a few guys who sadly have lost their wives but generally, he goes before she. In which case there is no problem, she gets to keep the house and lot. If she goes first, relatives may try and take the family home away from the grieving kano. If it is made very clear he owns the improvements on the land, like the house, they can take over the land, but they will have to pay him for the house, or for the removal of the house from the land.
The best way to protect yourself is to have an attorney draw up the appropriate documents so that the house is clearly owned by the kano and that there is a caveat or lien placed on the house preventing anyone owning the land from simply demolishing or seizing the building. Of course, if it comes to a court battle there is every chance the kano will lose simply because he is a kano; but it just might slow down whoever wants the property and make them think twice.
If the wife wants you to buy her a block of land, do so. You can’t own it anyway and most Filipinas want a piece of the country to call their own because they know if you leave them for a younger model they will still have a place to live. If you want, let her have the house too. But, if you are concerned for any reason, make the house a separate part of the legalities and lease it to her for a peppercorn rent, but retain ownership. You can also lease a house and lot of your own for 25 years with a 25 year option and that is as good as ownership in real terms. If you are looking at retiring there, do some homework and research but be cheered by the news there is always an option you can work in your favour.
Perry Gamsby, D.Lit, MA(Writing), Dip.Bus, Dip. Mktg is a writer and lecturer who lives with his Cebuana wife and five Aus-Fil daughters in Western Sydney. The author of a series of best-selling ‘self-help’ books for expats and those married to Filipinas, he is also a Master of Filipino Martial Arts and a former World Stickfighting Champion who has lived, worked and vacationed in the Philippines since 1988. Perry and his family return to the Philippines on a yearly basis.