© Copyright Lex Mundi Ltd.

2008

ISSUES IN OWNERSHIP OF REAL ESTATE

PHILIPPINES
Romulo Mabanta Buenaventura Sayoc & de los Angeles
CONTACT INFORMATION:
V. Johann Espiritu
Romulo Mabanta Buenaventura Sayoc & de los Angeles
30th Floor Citibank Tower
8741 Paseo de Roxas
Makati City, Philippines
Tel: 63.2.848.0114 / Fax: 63.2.810.3110
Email: Johann.Espiritu@Romulo.com
Web Site: www.romulo.com

1. Is perpetual fee simple ownership of real property permitted? If not, what are the
principal forms of ownership, or other principal form of ownership, of real property?

Yes, fee simple absolute property ownership is permitted in the Philippines.

2. What instruments are used to convey fee simple ownership, or other principal form of
ownership, of real estate?

A deed is used to convey ownership of real estate. In addition, if the land is registered, the
vendor's certificate of title must be cancelled and a new one registered in favor of the buyer.

3. How in this jurisdiction is the ownership of real property recorded or searched? Who
generally performs the search?

Real property is recorded by the Register of Deeds who has geographical jurisdiction over
the property. Only the Register of Deed may perform a search.

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 © Copyright Lex Mundi Ltd. 2008

4. What assurances of ownership are available to purchasers of real property (e.g., title
insurance or title opinions)? What is the cost of obtaining such assurances?

Title insurance is not available in the Philippines.

5. What are the most common forms of investment vehicles? What are the most common
entities employed to own investment real estate in a tax efficient manner?

In the Philippines, corporations are the most common form of entities used for investment.
However, to hold real property, at least 60% of such corporation's capital stock must be
owned by Filipino persons.

6. Has this jurisdiction adopted, or is it considering, legislation permitting the creation of

real estate investment trusts or similar entities?

There is no specific legislation governing real estate investment trusts.

7. What state or local transfer, stamp or similar taxes are levied generally on sellers or
buyers upon the direct transfer of real estate?

Capital gains, transfer and documentary stamp taxes are levied on transfers of real estate.

8. What state or local transfer, stamp or similar taxes are levied generally on sellers or
buyers upon the transfer of interests in entities which own real estate?

Capital gains taxes apply in the case of sale of stock of a corporation that owns real estate.

9. How significant is local regulation and taxation of real estate? How significant is the
variation of real estate law among political subdivisions of this jurisdiction?

Transfer taxes range from ½ to ¾ of 1% of the zonal, market or actual selling price of the
property (which ever is highest) with higher rates usually applying for properties inside
chartered cities. A documentary stamp of 1.5% is also levied, in addition to a capital gains
tax of 6%.

The Register of Deeds also collects a Registration Fee, computed as follows: PHP20,000.00
for the first PHP2,000,000.00 of the property value, plus PHP90.00 for every PHP20,000.00
thereafter.

10. Must ultimate beneficial owners of entities which own real estate be disclosed as a
matter of public record?

No.