Guide to Owning Property in the Philippines as a NRF or Dual Citizen

The law of property determines who owns something, but the market determines how it will be used.”

– Ronald Coase, British Economist & Noble Laureate

By Realttorney^®
 
If you’re a Filipino-American, a dual citizen, or a non-resident Filipino (NRF), owning property in the Philippines might feel like coming home – literally and emotionally. But as with anything involving real estate and international ownership, you’ve got to understand the legal and tax rules that come with the territory.
 
First of all, let’s define: Who is a Non-Resident Filipino or Dual Citizen? Understanding your legal identity is the first crucial step in the process of desiring to buy real estate in the Philippines.
 
✅ Dual Citizen
 
How do you become a dual citizen? Rep. Act No. 9225, known as the “Citizenship Retention and Re-acquisition Act of 2003,” allows natural-born Filipino citizens who have lost their Philippine citizenship because of their naturalization as citizens of a foreign country to be deemed to have re-acquired Philippine citizenship upon taking the oath of allegiance to the Republic specified in the said law.
 
👉 So, if you are a former natural-born Filipino who has already re-acquired Philippine citizenship, then you retain your U.S. citizenship. As such, in the eyes of the law, you’re now 100% Filipino with all the rights and responsibilities of any other citizen, including ownership of real estate without restrictions.
 
✅ Non-Resident Filipino (NRF)
 
This group includes (1) OFWs; (2) Filipino immigrants who retained Philippine citizenship; and (3) Filipino citizens who live abroad for long periods (but haven’t renounced their citizenship).
 
👉 The key for this group is that as long as you retain Philippine citizenship, you’re allowed to own land, condominium units, house and lot, and townhouses, etc. – even if you live abroad.
 
✅ Former Filipinos
 
As a side note, former natural-born Filipinos who do not wish to apply for dual citizenship or are not qualified to re-acquire Filipino citizenship according to Rep. Act No. 9225 may still acquire land under the provisions of Batas Pambansa Bilang 185.
 
Under this law, former natural-born Filipinos can be a transferee of a private land up to one thousand (1,000) square meters, in the case of urban land. But, a former natural-born Filipino may be a transferee of a private land up to an area of one (1) hectare in the case of rural land. The final restriction here is that the private land to be purchased (whether urban or rural land) should be used by the transferee as his residence and not for business purposes.
 
🏠 What Are Your Property Ownership Rights?
 
Here’s the good news: if you’re a dual citizen or an NRF, you enjoy full rights to own real estate in the Philippines.
 
You can legally acquire:
✅ Residential lots
✅ House-and-lot properties
✅ Condominiums
✅ Agricultural land
✅ Commercial property (with necessary business permits from the LGU)
 
Just like any Filipino citizen, you can:
 ✅ Buy, sell, or inherit real estate
✅ Transfer property to heirs or family
✅ Register the title in your name
✅ Use the property as rental income, a vacation home, or a retirement residence
 
📌 Reminder: Foreigners are prohibited from owning land. They may only own condo units or lease land for the long term. Read here if you want to learn more about this topic.
 
⚖️ Legal Considerations for Overseas Buyers
 
Here are some legal factors you must stay on top of as an overseas property owner:
 
1. Special Power of Attorney (SPA)
 
Since you’re not physically present in the Philippines, any legal transactions (e.g., signing contracts, submitting documents, paying taxes) will require an SPA authorizing someone in the Philippines to act on your behalf.
 
✔️ The SPA must be notarized by the Philippine Consulate in your country.
✔️ It should specify exact powers (e.g., to sign, sell, lease, or mortgage property).
✔️ Submit this SPA to the Register of Deeds and BIR for proper recognition.
 
2. Title Registration
 
Make sure that:
✔️ The property is titled under your legal name, and it matches your government ID or Philippine passport.
✔️ If the property is inherited or gifted, go through the legal process of estate settlement and register the transfer accordingly.
 
⚠️Don’t leave land titles under the names of deceased relatives or informal agreements. This can lead to legal disputes or costly litigation later on.
 
3. Zoning and Land Use
 
Some land types (e.g., agricultural, residential, or commercial) have restrictions on what you can build or do with the property.

✔️ You may need a conversion certificate if you plan to create a farm tourism business.
✔️ Check with the LGU (Local Government Unit) for zoning laws, building permits, and usage rules.
 
💸 Tax Implications for Dual Citizens and Non-Resident Filipinos
 
Now, let’s talk about everyone’s favorite topic: taxes. As a property owner in the Philippines, even if you live abroad, you’re still liable for certain taxes.
 
📌 1. Real Property Tax (RPT)
✅Paid annually to the LGU.
✅Based on the assessed value of your property.
✅Ranges between 1%–2% depending on the classification and assessment level of the property.
 
💡 Pay before January 31 each year to avoid penalties. Or better yet, you can pay the RPT in advance and get a twenty percent (20%) discount for the incoming full year’s RPT. You can assign this task to a representative in the Philippines.
 
📌 2. Capital Gains Tax (CGT)
✅Applicable when you sell a property, whether you incur an actual gain or not.
✅The rate is 6% of the gross selling price or the current schedule of market value (whichever is higher).
✅Paid by the seller (but often negotiated).
 
📍Even if you’re a non-resident, you must file and pay CGT through the Bureau of Internal Revenue (BIR) before title transfer.
 
📌 3. Documentary Stamp Tax (DST)
✅Paid by the buyer at a rate of 1.5%.
✅Applies when executing a Deed of Absolute Sale, Donation, or Mortgage Agreement, among other documents.
 
📌 4. Donor’s Tax
✅Applicable when gifting property to another person.
✅Taxed at 6% of the current schedule of market value of the donated property.
✅Exemptions apply for gifts up to P250,000 in value, annually.
 
📌 5. Estate Tax
When the owner passes away, the heirs must pay estate tax before they can legally transfer ownership.
✅Rate: 6% of the net estate (after deductions).
✅Heirs must file within 1 year from the date of death.
 
✔️ Pro Tip: Create an Estate Plan if you own real property here in the Philippines. It will make estate settlement easier for your immediate family later on.
 
🌐 Do You Need to File Income Taxes in the Philippines?
 
It depends on whether your property is income-generating.
 
✔️ If You Lease or Rent Out Your Property:
✅You are considered to be earning income in the Philippines.
✅You must register with the BIR and pay:
✅Income tax (depending on rental income)
✅Value-added tax (VAT) or percentage tax, if applicable
 
You may hire a Philippine accountant to help you file the necessary returns annually. Failure to register and pay taxes can result in penalties.
 
❌ If You Do Not Earn Any Philippine-Sourced Income:
 
You are not required to file income taxes in the Philippines. But you’re still responsible for property taxes, and you must properly report any sale or transfer of property.
 
💼 Can You Open a Bank Account or Get a Loan as a Dual Citizen?
 
Yes. In fact, most banks in the Philippines allow dual citizens and non-resident Filipinos to:
✅ Open peso or dollar accounts
✅ Apply for housing loans, auto loans, and even investment loans
 
However, most banks will require:
✅ Proof of income (COE or payslips)
✅ TIN and government-issued ID
✅ Dual citizenship certificate (if applicable)
 
Some banks have special programs tailored for OFWs and overseas buyers — check out BDO, BPI, Security Bank, or RCBC for their “home loan for foreigners or overseas Filipinos” programs.
 
✈️ Key Takeaways
 
Owning property in the Philippines as a non-resident or dual citizen isn’t just a dream — it’s a well-supported legal right. But to make it stress-free and financially sound, you need to:
 
✅ Know your rights under Philippine laws
✅ Register everything properly with the Registry of Deeds and BIR
✅ Keep up with annual tax obligations
✅ Avoid common legal mistakes by hiring licensed professionals
 
And always — always — leave a clear paper trail for your heirs or representatives, especially if your property is meant to be passed on.
 
📚 BONUS: Quick Checklist
 
Here’s your quick reference guide:
 
✅ Dual citizenship certificate or proof of Filipino citizenship
✅ Valid Philippine Tax Identification Number (TIN)
✅ Annual RPT payment receipt
✅ SPA (if managing from abroad)
✅ Legal ownership documents (TCT/CCT, tax dec, etc.)
✅ Draft or notarized Philippine will (if applicable)
✅ Hire a PRC-licensed real estate broker and a real estate attorney
✅ Consult a CPA, if earning rental income
 
📞 Need Help with Your Property Taxes or Legal Setup?
 
If you’re based in the U.S. and need help:
 
✅Filing your Philippine taxes
✅Drafting a Special Power of Attorney
✅Reviewing a Deed of Sale or Title
✅Creating an estate plan for your properties – real and personal – in the Philippines
 
📩 Reach out to a licensed Philippine real estate lawyer or estate planning expert who specializes in overseas Filipino clients.
 
——-
 
Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.