Condominium Ownership Rights for Foreign Spouses in the Philippines
An Overview of Legal Framework, Limitations, and Practical Considerations

1. Introduction

In the Philippines, real property ownership is governed by a combination of constitutional provisions, statutes, and regulations. Generally, the 1987 Philippine Constitution restricts land ownership exclusively to Filipino citizens and to Philippine juridical entities (i.e., companies or corporations) that are at least 60% Filipino-owned. However, condominium ownership offers certain exceptions to these rules, allowing foreigners—under specific conditions—to own condominium units.

When it comes to foreign spouses of Filipino citizens, the interplay between constitutional restrictions, family property regimes under the Family Code, and the Condominium Act (Republic Act No. 4726) can be complex. Below is a comprehensive discussion of the legal framework, limitations, and practical considerations for foreign spouses in acquiring and owning condominium units in the Philippines.

2. Relevant Laws and Constitutional Provisions

1987 Philippine Constitution
- Article XII, Section 7: Prohibits non-Filipino citizens from owning land in the Philippines, subject to specific exceptions (e.g., hereditary succession).
- Article XII, Section 2: States that for corporations to own land, at least 60% of the equity must be owned by Filipino citizens.
Condominium Act (Republic Act No. 4726)
- Defines a “condominium” as an interest in real property consisting of a separate interest in a unit in a residential, industrial, or commercial building and an undivided interest in common areas or the land on which the building stands.
- Allows foreigners to own condominium units, provided that foreign ownership in the condominium project does not exceed 40% of the total and that the controlling interest (at least 60%) remains Filipino-owned.
Family Code of the Philippines (Executive Order No. 209, as amended)
- Governs the property relations between spouses.
- Default property regime for marriages entered into after August 3, 1988, is the Absolute Community of Property, unless the couple agrees otherwise through a prenuptial agreement.
- Under the Absolute Community regime, properties acquired during the marriage generally become part of the community, but constitutional restrictions on foreign ownership of land must still be respected.

3. Basic Rule: Foreigners and Condominium Ownership

Direct ownership of condominium units: Foreign nationals (including foreign spouses) may directly own condominium units in the Philippines if:
1. The project is constituted under the Condominium Act.
2. The majority (at least 60%) of the condominium corporation’s total capital stock is owned by Filipino citizens.
3. The collective foreign ownership does not exceed 40% of the total number of units (or total floor area, depending on how it is structured) in the condominium project.
Nature of ownership: When you purchase a condominium, you essentially own a unit in the building plus a proportionate share in the common areas. You do not own the land underneath in the same way you would with a standalone house and lot. This is why condominium ownership is exempt from the constitutional prohibition on foreign land ownership—the land is owned by the condominium corporation, which must be controlled (60%) by Filipino citizens.

4. Special Considerations for Foreign Spouses

4.1. Property Regimes and Family Code Implications

Absolute Community of Property
- By default, if a Filipino marries a foreigner, all property acquired during the marriage (subject to some exceptions) becomes part of the absolute community.
- However, the Filipino spouse, by virtue of being a Filipino citizen, can own land and real property without restriction.
- The foreign spouse’s name may appear in contracts and titles for condominium units (subject to the 40% foreign ownership limit within the project), but this can be complex in practice if there are uncertainties about the condominium’s foreign ownership share.
Conjugal Partnership of Gains
- For marriages celebrated under the older regime or under certain pre-nuptial agreements, properties acquired during the marriage may fall under the Conjugal Partnership of Gains, where each spouse retains ownership of the properties they brought into the marriage, and only the “fruits” or gains during the marriage become part of the conjugal partnership.
- Again, the constitutional ban on land ownership by foreigners remains. If a condominium unit is purchased during marriage, it may become part of the conjugal partnership, provided it conforms to the Condominium Act’s 40% rule.
Separation of Property
- The spouses may agree in a marriage settlement to keep their properties separate (often done to avoid complications with foreign ownership restrictions).
- Even with a separation of property regime, the foreign spouse is still subject to the same 40% limit if purchasing a condominium individually.

4.2. Succession and Inheritance Issues

If the Filipino spouse passes away, questions may arise about the foreign spouse inheriting real property. Under Philippine law, a foreign spouse cannot inherit land if this would violate constitutional restrictions. However, for a condominium unit (where direct foreign ownership is permissible up to 40%), inheritance is typically allowed.
If the condominium ownership is within the allowed foreign ownership percentage, the foreign spouse generally may inherit and continue owning the condominium unit. However, if the foreign spouse’s inheritance would push the condominium project’s overall foreign equity above 40%, the corporation may require adjustments (e.g., sale or transfer of some units).

4.3. “Dummy” Arrangements

A “dummy arrangement” occurs when a foreigner uses a Filipino citizen (such as a spouse) merely as a proxy or nominal owner to circumvent legal restrictions on ownership. This practice is illegal.
Indicators of dummy arrangements may include:
1. The foreigner pays for everything and exercises full control over the property.
2. The Filipino spouse or partner is not meaningfully involved in the transaction.
Penalties for “dummy arrangements” can be severe, including fines, imprisonment, or the possible forfeiture of the property to the state.

5. Practical Steps for Foreign Spouses Purchasing a Condominium

Check the Project’s Foreign Ownership Cap
- Ensure that the condominium developer or management company can provide documentation affirming that the 40% foreign ownership cap has not been exceeded.
Verify the Condominium’s Legal Status
- Confirm that the building is registered under the Condominium Act (R.A. 4726). If it is not formally a condominium under Philippine law, the ownership structure may not allow foreign ownership.
Conduct Due Diligence
- Work with a reputable real estate broker or attorney.
- Verify the Condominium Certificate of Title (CCT) and the developer’s legitimacy.
Understand Your Property Regime
- If married under Philippine law, clarify whether you are under the Absolute Community of Property, Conjugal Partnership of Gains, or Separation of Property.
- Consult a family law attorney if you have doubts about how your marriage settlement impacts ownership.
Documentation and Title Transfer
- When purchasing a condominium unit, you will receive a CCT (Condominium Certificate of Title) rather than a TCT (Transfer Certificate of Title), which is issued for land.
- Have the contract of sale and deed of sale notarized and registered.
- Pay applicable taxes and fees (e.g., capital gains tax, documentary stamp tax, transfer tax, and registration fees). Usually, for a sale of real property in the Philippines, the seller pays capital gains tax, and the buyer pays documentary stamp tax and transfer fees, but this can vary by agreement.
Inheritance and Succession Planning
- Prepare a last will and testament or other estate planning documents to clarify the disposition of the condominium if one spouse passes away.
- Foreign spouses should be aware of Philippine inheritance laws, which may differ from those in their home countries, especially regarding compulsory heirs and the concept of legitimes.

6. Restrictions Beyond Ownership

Homeowners’ Association and Condominium Corporation Rules
- Even if permitted to own, foreign spouses must abide by association rules and by-laws.
- Participation and voting rights in condominium corporations depend on shareholding. If foreigners collectively hold more than 40%, they lose certain corporate voting rights tied to the excess.
Bank Financing
- Foreign spouses may have more difficulty obtaining real estate loans in the Philippines. Many local banks prefer Filipino borrowers or require a Filipino co-borrower.
- It is possible, however, for foreigners to secure loans from Philippine banks if they meet certain criteria (e.g., permanent residency, stable local income, or significant collateral).
Leasehold Alternatives
- Foreign spouses who cannot purchase under the 40% rule (e.g., the condominium project is already at capacity for foreign ownership) sometimes pursue long-term leases of condominium units or other real property.
- A lease of private land can extend up to 50 years, with an option for renewal under specific conditions (though subject to current laws and potential constitutional limitations).

7. Common Myths and Misconceptions

Myth: “A foreign spouse automatically owns half of any property bought by a Filipino spouse.”
- Reality: The Family Code’s default regime (Absolute Community) means that properties acquired during the marriage generally belong to the community; however, the Constitution still prohibits land ownership by foreigners. For condominiums, the 40% foreign ownership limit applies.
Myth: “Placing the title in the Filipino spouse’s name is enough to circumvent constitutional restrictions.”
- Reality: If done solely to hide the foreign spouse’s beneficial ownership, this can be deemed a dummy arrangement, punishable by law.
Myth: “Foreigners cannot inherit any property at all.”
- Reality: Foreigners cannot inherit land if it violates constitutional limits. But condominium units are usually inheritable by foreign nationals, provided the total foreign stake in the condominium corporation does not exceed 40%.

8. Frequently Asked Questions (FAQs)

Can a foreign spouse jointly purchase a condominium with a Filipino spouse?
- Yes, as long as the purchase adheres to the 40% foreign ownership limit for the condominium project.
What if the 40% foreign ownership cap is already reached in a condominium project?
- The developer or condominium corporation may refuse to sell additional units to foreigners. In that scenario, the foreign spouse can purchase in the Filipino spouse’s name, but the arrangement must not constitute a “dummy” setup.
If my Filipino spouse dies, do I lose the condominium?
- Not automatically. If the condominium ownership was lawfully acquired within the 40% limit, you (the foreign spouse) may inherit and keep the condominium. Complications can arise if this inheritance pushes overall foreign ownership beyond 40%.
Does the foreign spouse need a Special Resident Retiree’s Visa (SRRV) or any other special visa to own a condominium?
- There is no absolute requirement for an SRRV or other resident visa to own a condominium. However, having a long-term visa or residency status in the Philippines may facilitate transactions, bank financing, and other legal processes.
Are there restrictions on renting out a condominium owned by a foreign spouse?
- Generally, no. A foreign condominium unit owner may rent out the property, subject to local ordinances, tax obligations, and condominium corporation rules (e.g., restrictions on short-term rentals).

9. Conclusion and Practical Advice

For foreign spouses in the Philippines, condominium ownership remains the most viable path to owning residential real estate, thanks to the Condominium Act and its allowance for foreign ownership (up to 40% of the total condominium project). However, the complexity of Philippine property law—especially in the context of marriage, property regimes, and constitutional restrictions—makes professional legal advice indispensable.

Plan carefully with your Filipino spouse regarding property regimes, financing, and estate planning.
Verify the condominium project’s compliance with the 60-40 rule to avoid legal complications.
Avoid “dummy arrangements”, which are illegal and carry severe penalties.

Understanding these legal nuances will help ensure that your rights as a foreign spouse are protected and that your property investment in the Philippines remains secure and compliant with the law.

Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Foreigners and Filipino spouses are strongly encouraged to consult a qualified Philippine attorney or real estate professional to address specific questions or circumstances related to condominium ownership.