Business Opportunities in the PH
Real Property - Raw Land
Raw or vacant land represents the most basic form of property and can be seen as the foundation for all other property types, including residential, commercial, and agricultural. While not all raw or vacant land is immediately developed, it is recognized for its potential to appreciate over time, making it the ideal passive/idle investment.
The Philippines continues to improve urban to rural linkages through transportation development projects such as the LRT 1 Extension Project, the Metro Manila Skyway Stage 3, and the MRT 7 line. (Photos from Moldex Realty, Spin.ph, and Alberto Alcain – Presidential Communications Office via Wikimedia Commons)
Things to keep in mind when
purchasing raw/vacant land
Location and accessibility are the key features of a good raw/vacant land investment, especially for residential projects. Prior area history research and ocular inspections are recommended to ensure that a potential purchase would be of good value.
It is important to note that the Philippines constantly experiences inevitable events such as flooding and land subsidence. Despite this, the country still boasts an array of prime locations where state-driven transportation development projects further link the regions. Potential central business districts (CBDs) also started to emerge outside metropolitan areas such as Manila and Cebu.
While other factors may be considered—often varying and depending on geographical location—checking the zonal value of land via the Bureau of Internal Revenue (BIR) is crucial to ensure that selling prices are fair and just.
Detailed information regarding zonal values of land can be accessed via the BIR’s website: https://www.bir.gov.ph/zonal-values
Recommended Steps in Acquiring Raw/Vacant Land
[Disclaimer: Please still seek the expertise and guidance of a licensed broker/agent and/or lawyer.] While the process for acquiring land in the Philippines may vary per geographic location, the steps listed below may serve as an auxiliary guide. Seeking the assistance and expertise of a licensed broker or agent—and lawyer in some cases—is a better option for smoother transactions. Please note that the rates mentioned below may change over time.
1
After doing area history research (and ideally, ocular inspection) of a potential raw/vacant land acquisition, verify if the seller is the real proprietor. This can be done by requesting a copy of the Title Certificate (aka Titulo) from the Registry of Deeds.
- A directory of the different Registry of Deeds offices can be found here: https://lra.gov.ph/registry-of-deeds/
Photo from Baguio Property Finder
2
Check significant documents for due diligence that prove the raw/vacant land’s technical descriptions and specifications, namely the following (may vary):
- Right of way: This is only applicable if the raw/vacant land is isolated or has far access to public roads.
- Tax declaration: This document proves the previous proprietor diligently paid all real property tax (aka amilyar) due. Specific penalties may apply if missed dues exist, further delaying the process.
Photo from UNA Tax & Accounting Services
3
Depending on the purpose, continuously check the accessibility and overall viability of the land. Road access, sewage, and electrical access are some of the many necessities that need to be considered.
Photo from International Climate Initiative
4
If the land is inherited by a sole proprietorship without a will or may have possibilities that disputes from certain heirs may arise in the future, be sure that a published Deed of Adjudication with Sale/Deed of Self-Adjudication exists on the seller’s side to prevent disputes from happening.
- In the case of multiple heirs, the seller should have a published Deed of Extrajudicial Settlement of Estate/with Sale. This just proves that ALL heirs are of legal age and agreed on the distribution of land. A sample template of this document may be accessed via the Land Registration Authority’s website here: https://lra.gov.ph/wp-content/uploads/2022/10/TEMPALTE-EJS.pdf.
- By ‘published,’ the deeds must have undergone three consecutive weeks of general circulation in a newspaper.
Photo from FCB Law Office
5
Once those mentioned above have become sufficient on the purchasing party’s side and payment has been received by the selling party, a Contract to Sell, followed by a notarized Absolute Deed of Sale must be signed and secured by both parties. The responsibility for taxing the sale must be indicated in the deed.
- A documentary stamp tax of 1.5% and a local transfer tax of 0.5% of the purchase price may be charged.
Photo from The LawPhil Project
6
Suppose the purchasing party cannot be present in most of the acquisition process. In that case, a Special Power of Attorney must be secured for the trusted representative to gain authority on behalf of the buyer—e.g., a relative, friend, etc.
Taken from the Land Registration Authority
7
The notarized Absolute Deed of Sale, along with other documents, must be submitted to the Bureau of Internal Revenue (BIR) for further process, and payments due:
- Capital Gains Tax (BIR Form 1706) must be settled within 30 days of signing the Absolute Deed of Sale, along with Creditable Withholding Tax (BIR Form 1606)
- Documentary Stamp Tax of 1.5% of the purchase price will also be charged
Photo from the Philippine News Agency
8
The Electronic Certificate Authorizing Registration (eCAR) will also be necessary before payment of the Transfer Tax. The following prerequisite documents will be needed for the eCAR processing:
- Deed of Absolute Sale
- Duplicate copy of either Original/Transfer Certificate of Title (whichever is applicable)
- Form 2000 (Documentary Stamp Tax and BIR Form 1706 CGT)
- Tax Clearance Certificate
- Tax Declaration
Photo from Radyo Pilipinas
9
Once the eCAR has been secured, the Local Treasurer’s Office will process the Transfer Tax (which may be equivalent to 0.5% of the purchase price). This must be paid within 60 days after the notarization of the Deed of Conveyance (this may be in the form of a Deed of Absolute Sale, Deed of Donation, and/or Extrajudicial Settlement of Estate).
- The BIR must stamp the Deed of Conveyance
Photo from Radio Philippines Network
10
The Registry of Deeds would be the next step after those mentioned above, wherein the Registration Fee (approximately 0.25% of the purchase price) would be settled. Once accomplished, a new Transfer Certificate of Title will be issued in the buyer’s name. The following prerequisite documents are needed in this stage:
- Deed of Conveyance (8 copies)
- Valid IDs of all signatories
- Notary Public Receipt
- Certified true copy of Original Land Title (3 copies)
- Tax Clearance
- Tax Declaration
- Birth Certificates
- Certificate of No Marriage OR Marriage Certificate
- eCAR
- Original Owner’s copy of Title
- Transfer Tax Official Receipt
Photo from City of Dumaguete
11
Once the new Transfer Certificate of Title has been issued, proceed to the Local Assessor’s Office to update tax declaration information to the buyer’s name. The following documents are needed for such an update:
- Certified true copy of the new and old Title
- Photocopy of the old Title
- Deed of Conveyance
- Certified true copy of Tax Declaration
- Transfer Tax Receipt (present original and 2 photocopies)
- Business Tax Receipt and Business Permit (present original and 2 photocopies, only if applicable in the former owner’s case)
- BIR Certificate Authorizing Registration (present duplicate and photocopy)
- Tax Clearance (present original and photocopy)
- Photos of the property
- Subdivision plan (only if applicable)
Photo from City of Tayabas
In the Case of Filipinos with Dual Citizenship
Photo from the Philippine Consulate General in Vancouver, Canada
Article XII, Section 7 of the Philippine 1987 Constitution prohibits the full ownership of land for foreigners; in the case of corporations, 60% must be Filipino-owned, while 40% belongs to the latter; there are specific laws that offer flexible options. Republic Act 7652 provisions include the possibility of obtaining leases on private lands—especially those whose functions are for productive cases—ranging from 25 to 50 years, alongside obtaining a ‘license to do business’ from the Securities and Exchange Commission, as long as it adheres to the mentioned 60-40 rule on proprietorship. In the case of residential and commercial leases, the Civil Code allows leases ranging from 1 to 5 years.
For those with dual citizenship, provisions of Republic Act 9225 allow the full and direct ownership of land in the Philippines as long as Philippine citizenship is reacquired. For those who opt not to reacquire, land ownership is still possible but highly limited: 1,000 square meters for residential and 5,000 square meters for commercial in the urban setting, and 1 hectare for residential and 3 hectares for business/investment in the provincial setting—these are limited only for residential purposes. Those other than such have further limitations. If a foreigner happens to inherit land—provided that their parents were Filipino citizens at the time of death—they are exempted from the limitations of acquisition.
In cases where documents related to land acquisition in the Philippines are done outside its jurisdiction—on foreign soil—all executed and acknowledged paperwork must be presented to the Philippine embassy for authentication. This is necessary to obtain a BIR Certificate Authorizing Registration and issue a new Transfer Certificate of Title from the Land Registration Authority. Seeking the guidance and expertise of legal and property advisors is highly recommended in such pursuits by expatriates.
The Philippine Embassy in Berlin, Germany is one of many foreign posts where authentication of documents can be done. (Photo from the Department of Foreign Affairs)
Government and Non-Government Support in Acquiring Land
Here are the existing multi-purpose loan programs that can be fully or partially utilized by interested individuals:
Pag-IBIG/Home Development Mutual Fund
Active Overseas Filipino members—workers and expatriates alike—of the Pag-IBIG/HDMF can avail of the different programs that can be utilized in the acquisition/purchase of residential lots in the Philippines.
To access their savings and loan programs, click here: https://www.pagibigfundservices.com/Views/HomePage.aspx
For more information and/or detailed clarifications, you may contact/visit a Pag-IBIG representative, should there be one, in the nearest Migrant Workers Office in Philippine embassies: https://owwamember.com/polo-owwa-offices-abroad/.
Land Bank of the Philippines (LandBank)
LandBank provides a specialized loan program for Overseas Filipino Workers, known as the Bahay para sa Bagong Bayani (3B) program. This program can be used for a myriad of residential property acquisition purposes, including land/lots.
More information about the 3B Program can be accessed here: https://www.landbank.com/loans/personal-loan/housing-and-mortgage-loan-program/bahay-para-sa-bagong-bayani-3b
To gauge the surrounding benefits (RE), possible challenges (A), and future possibilities (L) of investing in real property, just remember that it must be REAL:
Philippine National Bank (PNB)
While the PNB offers a general housing loan program, there is a specialized loan catering to overseas Filipinos and non-Filipinos (for condominiums only) who want to own residential property in the Philippines. The Own a Philippine Home Loan (OPHL) provides a maximum of 80% of the appraised property/contract price value. While the program’s name focuses on home acquisition, it also covers the purchase of residential lots.
The OPHL can be availed whilst overseas via the PNB’s overseas offices/branches in Los Angeles, New York, Singapore, Hong Kong, Japan, the Middle East, Guam, and Europe.
For more information about the OPHL, please refer to the following links:
- https://www.pnb.com.ph/index.php/eu-ophl?tpl=revamp#faqs-eu
- https://www.pnb.com.ph/index.php/loans-and-investments/own-a-philippine-home-loan
- https://www.pnb.com.ph/wp-content/uploads/docs/FAQs_OPHL.pdf
Benefits, Challenges, Possibilities
To make the most out of an investment in raw/vacant land, keep in mind its benefit (R), challenge (A), and possible opportunity (W):
R
RISING AND APPRECIATING PRICES ARE HIGHLY EVIDENT AMONG RAW LAND INVESTMENTS
Though undeveloped, it holds strong potential in return of investment rates—often depending on what kind of development it will give way to.
A
ALL LAND INVESTMENTS TAKE TIME
Higher returns on investment rates mainly depend on accessibility and strong transportation linkages with neighboring provinces, regions, and/or cities. A recommendation would be to follow government-led transportation development projects.
W
WITHSTANDING AND HIGHLY RESILIENT INVESTMENTS SUCH AS LAND WILL ALWAYS ADDRESS CHANGING NEEDS
Whether in residential, retail, commercial, or any other form of socio-economic need, land proves to be a worthy investment that stands the test of time.
Information Source
- Affidavit of Self-Adjudication, Deeds of Donation, and Publication Requirements Under Philippine Law: A Comprehensive Legal Guide. (2024, December 20). Respicio & Co. Law Firm. https://www.respicio.ph/dear-attorney/affidavit-of-self-adjudication-deeds-of-donation-and-publication-requirements-under-philippine-law-a-comprehensive-legal-guide.
- 5 Documents You Need When Buying a Lot in the Philippines. (n.d.). Bilkenn Corporation. https://bilkenn.com/documents-needed-buying-lot-philippines/.
- Foreign Land Ownership in the Philippines: Legal Options and Restrictions. (2025, February 5). Respicio & Co. Law Firm. https://www.respicio.ph/commentaries/foreign-land-ownership-in-the-philippines-legal-options-and-restrictions#:~:text=Article%20XII%2C%20Section%207%20of,restrictions%20on%20foreign%20land%20ownership.
- Foreign Ownership of Land Philippines. (2023, October 6). Respicio & Co. Law Firm. https://www.respicio.ph/features/foreign-ownership-of-land-philippines.
- Owning Land/Real Estate in the Philippines – Philippine Consulate General Los Angeles California. (n.d.). Philippine Consulate General in Los Angeles. https://losangelespcg.org/useful-links/owning-real-property-in-the-philippines/.
- Republic Act No. 7652. (n.d.). Supreme Court E-Library. https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/2008.
- Right of Way Philippines. (2023, October 12). Respicio & Co. Law Firm. https://www.respicio.ph/features/right-of-way-philippines.
- Selling Inherited Land with Multiple Heirs in the Philippines. (2025, March 14). Respicio & Co. Law Firm. https://www.respicio.ph/commentaries/selling-inherited-land-with-multiple-heirs-in-the-philippines#:~:text=All%20heirs%20must%20sign%20off,action%20to%20force%20a%20partition.
- Transfer Land Title in the Philippines: 2024 Complete Guide. (2024, November 24). FileDocsPhil. https://www.filedocsphil.com/transfer-land-title-in-the-philippines-a-complete-guide/.
Photo Sources
- https://www.spin.ph/life/guide/smc-plans-bus-service-on-skyway-from-susana-heights-to-balintawak-a1373-20210426
- https://commons.wikimedia.org/wiki/File:MRT-7_trains_2021.png
- https://www.moldexrealty.ph/lrt-1-cavite-extension-to-make-moldex-land-heritage-homes-affordable-communities-in-cavite-ideal-real-estate-investments-for-first-time-homebuyers/
- https://baguiopropertyfinder.com/how-to-transfer-land-title-in-the-philippines-2024-guide/
- https://www.international-climate-initiative.com/en/iki-media/news/urban-planning-for-climate-change/
- https://lawyerphilippines.org/deed-of-sole-adjudication/
- https://tayabas.gov.ph/governance/departments-and-units/
- https://lra.gov.ph/wp-content/uploads/2022/07/specialpowerofattorney1.pdf
- https://una-acctg.com/understanding-dst-or-documentary-stamp-tax-in-philippine-transactions/
- https://www.pna.gov.ph/articles/1120524
- https://dumaguetecity.gov.ph/2022/08/30/registry-of-deeds-inaugurates-new-office/
- https://rpnradio.com/davao-city-optomistic-to-hit-tax-collection-target-amid-covid-19-pandemic/
- https://radyopilipinas.ph/2024/06/bir-ipinaliwanag-ang-validity-ng-electronic-certificate-authorizing-registration/
- https://www.vancouverpcg.org/philippine-consulate-general-in-vancouver-provides-consular-services-to-filipinos-in-delta-british-columbia/
- https://dfa.gov.ph/about/dfa-directory/index.php?option=com_content&view=article&id=12087&Itemid=932
- https://philippinelawfirm.com/property/titling-unregistered-lands/
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