Property Sale Legal Requirements in the Philippines for Foreign Residents

This guide explains, end-to-end, how a foreign resident in the Philippines can legally sell real property (or related rights), what they can and cannot sell, the documents you’ll need, how taxes and registration work, and the frequent traps to avoid. Laws and rates change; treat this as general information and consult a Philippine lawyer or tax professional for your specific deal.

1) First principles: what foreigners may legally sell

Under the 1987 Philippine Constitution and related statutes:

Land Foreign individuals cannot own land in the Philippines; therefore, as a rule, they cannot sell land they hold in their own name. The lone constitutional carve-out is hereditary succession: a foreigner may inherit land. If you inherited land, you may sell it only to persons/entities qualified to own land (e.g., Filipino citizens or Philippine corporations with at least 60% Filipino ownership).
Condominium units Foreigners may own and sell condominium units, provided foreign ownership within the project does not exceed 40% of the condominium corporation’s capital/ownership. A resale to another foreigner is allowed only if the building’s 40% cap will still be met after the transfer.
Buildings/house on leased land A foreigner may own and sell improvements (e.g., a house) standing on land they do not own, if they have a valid land lease. The sale typically transfers the building plus the leasehold rights (assignment of lease), subject to the lessor’s consent.
Corporate ownership A Philippine corporation that owns land must be at least 60% Filipino-owned. A corporation that’s more than 40% foreign-owned cannot own land, but it can own condominium units. Shares in land-owning corporations may be sold subject to corporate, securities, and anti-dummy rules.
Former natural-born Filipinos and dual citizens
- Former natural-born Filipinos who lost PH citizenship can own land within statutory area limits (for residential and business). They may sell within those limits.
- Dual citizens (who reacquired/retained Philippine citizenship) are treated as Filipinos for land ownership and may sell without the “former Filipino” limits.
Spouses of Filipinos A foreign spouse cannot co-own land by title; land is typically registered solely under the Filipino spouse. Any attempt to place land in a foreigner’s name (or to use a Filipino “dummy”) risks nullity and penal liability. Proceeds claims by the foreign spouse are complex and fact-specific.

2) What exactly can you put on the market?

Condominium unit (CCT) — including parking if titled; ensure 40% foreign cap compliance.
Improvements + leasehold rights — house/townhouse on leased land (assignment requires lessor consent).
Inheritances of land — sale must be to a qualified buyer only.
Former Filipino land — within statutory size limits.
Corporate interests — shares in a land-owning company (respect 60/40 rule; anti-dummy compliance).

3) Pre-sale checklist (foreign sellers)

Identity & status

Passport; if resident, ACR I-Card.
Tax Identification Number (TIN) — mandatory for tax payments and BIR clearances (foreigners can obtain under E.O. 98).

Property papers

Owner’s duplicate title (TCT for land, CCT for condo).
Latest Tax Declaration (land and/or improvements).
Real Property Tax (RPT) clearance and proof of no arrears.
Certificates from the condo/subdivision:
- Statement of Account / Clearance (no unpaid dues).
- Certification on foreign ownership ratio (condo 40% rule) for sales to foreigners.
If subject to mortgage, Cancellation/Release from the bank (or payoff statement).
If leased land, Lease Agreement and lessor’s written consent to assignment (as required by the lease).
If inherited: New title in heirs’ names (after estate settlement) or complete estate documents and Estate Tax proof of payment.

Transaction documents (to be prepared)

Offer to Buy/Accept or Contract to Sell (if staged payments).
Deed of Absolute Sale (DOAS) for full transfer on closing; or Deed of Assignment for leasehold rights.
Special Power of Attorney (SPA) if you’ll sign through an attorney-in-fact. If executed abroad, SPA must be apostilled (or consularized) before it can be used in the Philippines.

Due diligence (buyer and seller should both do)

Certified True Copy of title from the Registry of Deeds; verify liens/encumbrances, adverse claims.
Confirm zonal values/FMV implications for taxes.
For condos, review Master Deed, By-laws, house rules, and any special assessments.
Check actual possession (tenants/occupants) and utilities arrears.

4) Executing the sale: formalities & signing

Written deed is required. Use the proper instrument (Deed of Absolute Sale, or Deed of Assignment for lease rights, or Deed of Conditional Sale).
Notarization in the Philippines by a duly commissioned notary makes the deed a public document suitable for registration.
Signing abroad? Execute before a competent notary and apostille it (or consularize at a Philippine Embassy/Consulate) so it can be recognized and recorded locally.
Marital status matters: if seller is married, many Registries of Deeds require the spouse’s signature or proof of property regime to avoid future title issues.

5) Taxes and fees on sale: who typically pays what

Parties may reallocate by contract, but BIR will still look to the proper taxpayer for each tax. Always reflect any reallocation in the price and closing statements.

On the seller (typical):

Capital Gains Tax (CGT) — 6% of the higher of (a) gross selling price, (b) BIR zonal value, or (c) Fair Market Value per Tax Declaration — if the property is a capital asset (commonly, a personal condo not used in business).
- Deadline: generally 30 days from notarization/execution of the deed.
- Principal residence relief exists for individuals (one sale every 10 years if you reinvest full proceeds in a new principal residence within the statutory period), subject to strict BIR procedures/notice.
Value-Added Tax (VAT) — only if the property is an ordinary asset sold in the course of trade or business by a VAT-registered seller (e.g., developers; some lessors). Thresholds and exemptions vary by property type and may change over time.
Income Tax — If the property is an ordinary asset (e.g., used in rental business), gains are generally subject to regular income tax instead of CGT; creditable withholding tax (CWT) by the buyer may apply.
Broker’s commission (if engaged).
Notarial fees (often seller or shared).

On the buyer (typical):

Documentary Stamp Tax (DST) — 1.5% of the higher of gross selling price or FMV.
Transfer Tax — imposed by LGU (province/city); typical range ~0.5%–0.75% of the tax base.
Registration Fees — Land Registration Authority (LRA) schedule, tiered by property value.
CWT (if property is an ordinary asset of the seller) — withheld and remitted by the buyer.
Condo/subdivision transfer charges — per project rules.

Important: Tax bases often use the highest among contract price, zonal value, or tax declaration FMV. Pricing below those values will not reduce taxes.

6) The BIR Certificate Authorizing Registration (CAR)

No title transfer happens without the CAR (or eCAR). Typical flow:

File and pay applicable taxes (CGT or income tax, DST, VAT/CWT as applicable) with the BIR Revenue District Office (RDO) that has jurisdiction over the property.
Submit: notarized deed, IDs/TINs of both parties, title (owner’s duplicate), tax declaration(s), RPT receipts/clearance, and other supporting papers (condo clearances, corporate board resolutions, SPA, lease and consent if assigning, etc.).
BIR reviews, may require supplemental docs.
BIR issues CAR once satisfied all taxes are paid.

TINs of both seller and buyer are mandatory. Foreign sellers without a TIN must secure one (E.O. 98 registration).

7) Title transfer with the Registry of Deeds (after CAR)

Bring to the Registry of Deeds:

Owner’s duplicate title (TCT/CCT).
Original notarized deed (Deed of Sale/Assignment).
CAR and tax payment proofs.
Real property tax clearance and latest tax declarations.
Transfer Tax receipt (from City/Municipality Treasurer).
Other clearances (condo/subdivision, mortgage releases).
IDs and SPA, if applicable.

Upon registration, the old title is cancelled and a new title (TCT/CCT) is issued in the buyer’s name. The buyer then updates the Tax Declaration at the local Assessor’s Office.

8) Special scenarios for foreign residents

A) Selling a condominium (foreign owner)

Confirm foreign ownership ratio is ≤40% after your sale.
Secure condo admin clearances (no arrears; move-out/turnover requirements).
If selling to a foreign buyer, condo management may require a Foreign Ownership Compliance Certificate or similar document.

B) Selling a house on leased land

Review the lease for assignment/transfer clauses, consent requirements, and any transfer fees to the lessor.
Execute a Deed of Assignment of Leasehold Rights along with the Deed of Sale of Improvements.
Ensure taxes are computed properly: the improvements and the leasehold may have different tax treatments.

C) Selling inherited land as a foreigner

Before any sale, settle the estate and pay Estate Tax; the Registry issues a new title in the heir’s name(s).
You may then sell only to qualified transferees (Filipinos/qualified corporations).
A sale to a foreign individual is not allowed if it would result in foreign land ownership.

D) Selling while abroad

Sign the deed (and/or SPA) before a notary, then apostille (or consularize) it.
Courier originals; electronic copies aren’t enough for registration.

E) Existing tenants

Honor the lease; disclose tenancy to the buyer.
If early termination is needed, address it contractually (e.g., seller to deliver vacant possession).

F) Property under mortgage

Coordinate for simultaneous release: bank provides Cancellation of Mortgage upon payoff; include in closing mechanics.
If buyer assumes the loan, obtain bank consent and execute assumption documents.

G) Corporate seller/buyer

Prepare board approvals, secretary’s certificate, and confirm compliance with foreign equity limits and anti-dummy law.
Additional tax and bookkeeping implications apply.

9) Anti-Dummy and circumvention risks

Using a Filipino “dummy” to hold land for a foreigner’s benefit is illegal (criminal and administrative penalties; contracts may be void).
Sham donations to a Filipino partner/spouse to skirt the prohibition are routinely invalidated.
Keep your documentation substantive and genuine; avoid side letters that reveal prohibited beneficial ownership.

10) Banking, remittances, and AML/KYC

Philippine banks will conduct KYC under the Anti-Money Laundering framework. Be ready with passport/ACR, proof of address, and source of funds.
To repatriate sale proceeds, banks typically require the Deed of Sale, CAR, and proof of taxes paid. If your original purchase funds were inwardly remitted, keep those records—they support repatriation.

11) Practical timelines & sequencing (typical)

Offer/Contract to Sell →
Due diligence & clearances →
Deed signing & notarization →
BIR filing & taxes paid → CAR issued →
Transfer Tax paid →
Registry of Deeds (title transfer) →
Assessor (new Tax Declaration) →
Turnover (keys, possession, utilities, HOA/Condo admin).

12) Frequent pitfalls (and how to avoid them)

No TIN for one party → No CAR → No transfer.
Selling a condo without checking the 40% cap → buyer (foreigner) can’t register.
Underpricing below zonal/FMV to “save taxes” → BIR re-bases taxes; penalties may apply.
Unsigned/uncancelled mortgage → title transfer blocked.
Non-compliant SPA (not apostilled/consularized) → deed rejected.
Unpaid HOA/condo dues → delays and additional fees.
Selling inherited land before estate settlement → void/voidable paper trail and registration refusal.
Dummy arrangements → criminal risk; loss of funds without enforceable rights.

13) Document pack: what you’ll likely need

From the seller (foreign resident)

Passport; ACR I-Card (if applicable).
TIN and BIR registration record.
Owner’s duplicate TCT/CCT; Tax Declarations.
RPT receipts/clearance.
Condo admin clearances; foreign ownership ratio cert (if selling to a foreigner).
Lease and lessor consent (if applicable).
Mortgage release/consent (if applicable).
SPA (apostilled/consularized) if using an attorney-in-fact.
Notarized Deed of Sale/Assignment.

From the buyer

Valid ID/passport; TIN.
Payments and receipts for buyer-side taxes/fees (DST, Transfer Tax, registration).
For corporate buyer, SEC docs and board approvals.

14) Taxes: capital vs ordinary asset (why it matters)

Capital asset (typical for a personally held condo not used in business): seller pays 6% CGT; no CWT by buyer.
Ordinary asset (used in trade or business—e.g., regularly rented out, or seller is a real estate dealer): No CGT; seller’s gain is taxed as ordinary income; buyer withholds CWT at prescribed rates; VAT may apply if seller is VAT-registered.
Classification depends on use and facts, not just the title.

15) Special notes for former Filipinos and dual citizens

Former natural-born Filipinos: you may sell properties you own within the allowed area limits. If you wish to exceed those limits or own land without limits, consider reacquiring Philippine citizenship (RA 9225), after which you can own and sell as a Filipino.
Dual citizens: transact as Filipinos; present proof of reacquired/retained citizenship when dealing with registries and the BIR.

16) Quick answers to common questions

Can I, a foreigner, sell land in my name? Only if you inherited it (or hold it via a qualified corporation). You must sell to a qualified buyer (not to a foreign individual).
Can I sell my condo to another foreigner? Yes, if the 40% foreign cap will still be met in the building.
Do I need a TIN to sell? Yes. Without TINs for both parties, the CAR will not be issued.
I’m overseas—can I close remotely? Yes. Use an apostilled (or consularized) SPA and/or sign the deed abroad and apostille/consularize it.
How are sale proceeds taxed and remitted? Taxes (CGT/DST/etc.) must be paid first; banks then allow remittance upon presentation of CAR and closing documents.

17) Professional help you’ll likely need

Real estate lawyer — structure the deal, confirm what you can legally sell, prepare deeds/SPAs, and steer through exceptions (inheritance, corporate ownership, anti-dummy issues).
Tax advisor — classify asset (capital vs ordinary), plan CGT vs income tax/VAT, meet deadlines, and prepare BIR filings.
Licensed broker — market the property and coordinate clearances and building/LGU requirements.
Notary public — for deed execution and SPA authentication.

18) Final takeaways

As a foreign resident, you can sell condos, improvements with lease rights, inherited land (to qualified buyers), and properties owned within the rules for former Filipinos or through qualified corporations.
Proper BIR compliance (CAR), title registration, and respect for ownership limits are the backbone of a valid sale.
Avoid any structure that looks like a dummy arrangement; it risks nullity and criminal penalties.
Start early on TINs, clearances, and apostilles—they’re the most common sources of delay.

If you want, tell me what type of property you’re selling (condo, house on leased land, inherited land, etc.), and I’ll tailor this into a step-by-step closing checklist for your exact situation.