Philippines: condos attract foreign retirees

The Philippine Constitution reserves land ownership to Philippine citizens and to companies majority-owned by them. A foreigner therefore cannot acquire land.

They can, however, acquire a condominium unit, within a quota set for each building: the share held by foreigners cannot exceed a fraction of all units.

This explains why the market aimed at foreigners is oriented towards residential towers in Manila, Cebu and beach areas: it is the only segment open to them in full ownership.

Arrangements designed to circumvent this rule, through an intermediary company or a nominee, are unlawful and expose the buyer to losing the property. Philippine case law penalises them.

A house with land can therefore only be obtained through a long-term lease, whose remaining term determines its value, or through a Filipino spouse — which raises other issues in the event of separation or inheritance.

This structure has a direct economic consequence on the market. Since the supply open to foreigners is limited by design, it is concentrated in new developments sold by a small number of developers, and its liquidity depends on a narrow pool of buyers — mainly other foreigners and affluent local buyers.

A buyer must therefore examine the condominium as much as the apartment: occupancy rate, quality of management, level of service charges, and share already held by foreigners. A condominium whose quota is close to the limit will be hard to resell to a buyer with the same profile.

The sale of real estate bears a levy of 6%¹, based on the sale price or on the reference value if higher.

It is therefore a tax on the price, not on the gain realised. A seller who sold at a loss would still pay it, which is a fundamental difference from European property taxation.

Estate tax, for its part, is 6%² of the net value of the estate, with no progressive scale.

Gains on the sale of shares not traded on the stock exchange are taxed at 15%³, and dividends bear a final tax of 10%⁴.

The Philippine tax scale for earned income starts at 0%⁵ on its first bracket and peaks at 35%⁶ at its top marginal rate.

Corporate income tax for domestic companies is 25%⁷.

The Philippines does not tax foreign residents' foreign-source income, which is the main advantage for a retiree living on a French pension.

We do not publish the conditions of the Philippine retirement visa, the deposit thresholds required, or the tax residency criteria used in Philippine law: they do not appear in the official sources we were able to verify.

1. Buy in a condominium and check that the building's foreign quota has not been reached.
2. Never use a nominee or a front company to acquire land.
3. Factor the 6%¹ levy into the resale: it is charged on the price, not on the gain.
4. Have your pension classified under the France–Philippines tax treaty.
5. Handle the departure from France according to its own criteria.

Finally, two practical constraints deserve to be raised. The Philippine healthcare system often requires evacuation to Singapore or Bangkok for major procedures, which calls for insurance covering this risk. And the archipelago is among the territories most exposed in the world to typhoons as well as to seismic and volcanic activity: insurance for the property and the quality of its construction must be examined before buying, not discovered afterwards.