Foreigners Owning Land

[Fast&Furious]

The problem is the damn law preventing foreigners to own land :(

[JJReyes]

The problem is the damn law preventing foreigners to own land

 

You can do a 50 years lease.

 

Hawaii still has leasehold property, although most shy away from purchasing them. The prices for leasehold are much cheaper than fee simple. Our realty estate agency has a client, a professor of business from California. He and his wife only purchase leasehold condos because the return on investment are much better. (Renters don't care if it's leasehold or fee simple.) They have no children. After both pass away, their assets are donated to a university foundation. The system is known as a Charitable Remainder Trust. They retain full control on the properties and keep the rental money, but they get all kinds of tax breaks on their current income.

 

This is one of those situations where the rich care hire tax lawyers to set up the paperwork.

[i am bob]

JJR is right - we can always get a lease with first options for renewal and/or purchase by a Filipino descendent (wife, kids, grandkids) at a predetermined price set in the leasing contract.  Yes, that is very legal.

 

:thumbsup:

[Dave Hounddriver]

Leasing is legal, I suppose.  I know 2 people who tried it and 2 people who failed.  `A` paid 6 months of the lease to the owner who took off to Manila and her children would not let Tom in the house unless he paid more money.  He refused, went to police.  They said they would charge owner with fraud if she ever came back to Cebu but in the mean time he was out the money and could not more in.  `B`  paid for a long time until the governor told him the government was going to turn that property into a nature reserve and he had to move.  Many years later the land is not a nature reserve and someone else live on that property.  Wonder what the governor got for kicking him off the land.

 

Does anyone have a story about a lease that worked for the 25 or 50 years it was supposed to go for.  I don`t know of any so its why I am asking.

 

Edit:  Some may ask what`s the point of negative tales like this.  Point is new people need to learn to accept the there is no way for a foreigner to  control a piece of real property in Philippines.  Lots of work arounds that sometimes work and sometimes don`t but there is a foreign mind set about owning property that just does not work here.  When you learn to accept the local mindset you will be much happier.  You learn to do whatever you want to acquire property with the knowledge that there are no guarantees here and you learn that anything you invest in property should be an amount you can afford to walk away from if the worst happens.

Edited June 14, 2013 by Dave Hounddriver

[jon1]

I have a 42 year lease on my house in the Subic Freeport. We will see if it goes well.. There are many foreigners and filipinos living here that own similar leasehold rights. In the Subic Freeport, nobody, filipino or foreigner can own any of the properties/houses.

 

I pay zero property tax, an advantage of a lease vs. ownership. I hold the "leasehold rights" and can either sell them or sublet for rental income if chose to relocate.

 

I also put the lease in mine and my girl's name so when I die, she will have the option to stay on or sell the remaining leasehold rights...

[JJReyes]

Does anyone have a story about a lease that worked for the 25 or 50 years it was supposed to go for.  I don`t know of any so its why I am asking.

 

Yes. Toyota and all those Japanese factories are on leasehold land. The 50 years plus 25 leases is different from rental or long term lease. You pay the full amount, similar to making a property purchase. Subic and Clark are good examples. The land is owned by the Philippine government and available only through leases.

 

I am only speculating, but the American mindset about owning the land free and clear may date from the European period when all the land was owned either by the nobility or the church. The landlords then charged exorbitant rents to the tenants. The ability to own land in the United States was a powerful incentive to emigrate. For some reason, this is seldom emphasized in the history books. What started the Westward expansion was the concept of free land. The government allowed you to stake a claim. Of course, you had to kill the true owners, the Native Americans. To make the killing more palatable, they were called, "Savages."

 

I thought leasehold was in Hawaii only because a large chunk of the land was formerly under the control of the Hawaiian monarchs. It turns out there are other places in the US Mainland. Pebble Beach is one example of an exclusive residential complex that's all leasehold land. Another are all the Indian reservations. It's all federal land held in a trust. Individuals and corporations cannot claim land ownership, including Native Americans. American Samoa is also a leasehold system.

Edited June 14, 2013 by JJReyes

[JJReyes]

I have a 42 year lease on my house in the Subic Freeport. We will see if it goes well.. There are many foreigners and filipinos living here that own similar leasehold rights. In the Subic Freeport, nobody, filipino or foreigner can own any of the properties/houses.   I pay zero property tax, an advantage of a lease vs. ownership. I hold the "leasehold rights" and can either sell them or sublet for rental income if chose to relocate.   I also put the lease in mine and my girl's name so when I die, she will have the option to stay on or sell the remaining leasehold rights...

 

Jon1, Did you pay a lump sum for the 42 year lease on your house to either the Subic Metropolitan Authority or to a leasee?

[jon1]

 

I have a 42 year lease on my house in the Subic Freeport. We will see if it goes well.. There are many foreigners and filipinos living here that own similar leasehold rights. In the Subic Freeport, nobody, filipino or foreigner can own any of the properties/houses.   I pay zero property tax, an advantage of a lease vs. ownership. I hold the "leasehold rights" and can either sell them or sublet for rental income if chose to relocate.   I also put the lease in mine and my girl's name so when I die, she will have the option to stay on or sell the remaining leasehold rights...

 

Jon1, Did you pay a lump sum for the 42 year lease on your house to either the Subic Metropolitan Authority or to a leasee?

 

I paid the lump sum (which included 5% tax for SBMA). I am the 3rd leaseholder. I have been told that if you want additional years, that you can purchase in 10 year increments (never more than 50 years).

 

I agree with your speculation comment.

[Thomas]

Leasing is legal, I suppose.  I know 2 people who tried it and 2 people who failed.  `A` paid 6 months of the lease to the owner who took off to Manila and her children would not let Tom in the house unless he paid more money.

So better pay only week by week  :)

 

The problem is the damn law preventing foreigners to own land :(

Well. There are some solutions besides the long time lease told above by others. 

Legaly long times leases follows the LAND, so the lease is legal UNDEPENDING of if it's sold. 

(A Filipino outside Davao had signed a long time lease with a big fruit producing foreign company, but found out later he didn't found the yearly lease pay any fun, and tried to sell it. I don't believe he will succeed, at least not even close to normal land price.)

/If the owner want to sell the land, because he need money, it can be solved by COMBINE long time lease with a loan with the land as security. (Disadvantage: Your will not get the value raise. But perhaps it can be solved too by a paragraph giving option you can decide who to sell it too and the option tell at which price.)

/If you have/get a child, which has Filipin citizenship, then he/she can own the land as a small child too. (A friend of mine have done it 30 years ago, when his first child was a baby, and it functions still.)

/If you have/start a company, which need land for it's business, then it's allowed for foreigners to own 40% of the land by owning 40% of that company.  (Some make solutions with dummies, but there is a anti-dummy law, so I doubt it would succeed if testing such solutions in court, so I surely DON'T recomend such solutions. But relatives can have the rest. OR perhaps more secure in CONTROL point of view, spread the rest of the ownership between many, who don't know each other.)

[Call me bubba]

The problem is the damn law preventing foreigners to own land :(

yes thats true. yet by knowing what the laws are before you move you will be aware,

 no one is forcing you to buy the land or come(move)here. by knowing what LIMITED RIGHTS you have you may prevent yourself from going into a "break down" like john pope/