Buying Properties in Boracay

The island of Boracay was declared as a Tourist Zoning and Marine Reserve of the Philippines in 1978. This puts it under the control of the Philippine Tourism Authority. This simply means that the whole island of Boracay is being developed by the Philippine government as a premier tourist destination, equipping it with infrastructures and facilities to support the growing tourism industry in the island. Over the years, there have been a lot of improvements in terms of making Boracay accessible to tourists. For instance, there are 2 airports in Aklan (Kalibo & Caticlan) and more airlines servicing the Manila-Boracay-Manila or Cebu-Boracay-Cebu routes, and the whole island is wired with internet capabilities from broadband to wi-fi connections linking it to the rest of the world. Because of these positive growth in the Tourism industry of Boracay, land appraisal has gone up, and real estate properties have become highly valued commodities in Boracay. Investing in a piece of property in this island is deemed wise as return of investment is guaranteed.

The whole island is approximately 7 kilometers long, has a dumbbell shape, with a total land area of 10.32 sq. kilometers. Of this, only 2-3% is titled and registered at the Registry of Deeds. This means that the remaining lands in Boracay are not titled lots and claim of ownership is only evidenced by the proof of tax declarations for the occupied land. This can be a complication if you are thinking of having a bank finance the purchase of the property you are buying in Boracay. Banks generally do not accept tax declarations for applying mortgage. However, there are still non-bank institutions that permits mortgage by accepting tax declaration only.

If you are thinking of buying real estate properties, it is best to deal with reputable Real estate agents with accreditations from the Philippine Association of Real Estate Brokers (PAREB) or the Chamber of Real Estate and Builder’s Association. Be wary of ‘fixers” who broker deals that promise speedy processing of your documents as this might only complicate your transactions. There are a number of credible Real Estate Companies who have very helpful websites that not only offer property listings in Boracay but other related services as well. They can provide you with land transfers, architects, property management, Brokerage, Landscaping, construction contractors, rentals and even counsel you with legal advice and investment opportunities.

If the buyer is a foreigner, he/she may encounter some limitations in purchasing real estate properties in the Philippines. In Philippines laws, only natural-born or naturalized Filipino citizens are allowed to own property. Foreigners, who wish to do so, should set up a Philippine corporation that is 60% owned by Filipino shareholders. There are, however, a few exceptions to this rule that may be in favor to foreigners with a legal Filipina spouse or children. It is best to study this matter carefully under the guidance of legal counsel.

Who Can Buy Properties in Boracay?

As a rule, only Filipino Citizens and corporations or partnerships of which at least 60% of the capital is owned by Filipinos are entitled to acquire land in the Philippines. Is it possible for a foreigner to buy property in the Philippines? Well, yes and no. For a foreigner to acquire Real property in the Philippines, he must set-up a Philippine corporation which can buy or hold properties. He will need his Filipino partners to gain 60% ownership of the company while the foreigner is entitled to only 40% of the same.

However, there are some exceptions to this rule of not allowing an alien 100% ownership to Real Estate Property in the Philippines. The first is if the property was acquired before the 1935 Constitution when the Philippines was still a Commonwealth government of the United States of America; Secondly, if the Non-Filipino is a legal heir. When for example a Filipino spouse dies, the surviving Non-Filipino spouse as the legal heir may inherit and claim full ownership of the property. Thirdly, if the real property is a condominium project, the foreigner is allowed to purchase not more than 40% of the share. Lastly, if the purchase is made by a former natural-borm Filipino citizens subject to the limitations prescribed by law. This refers to Filipinos born in Philipine soil who have migrated or acquired citizenships abroad thus holding Dual citizenships.

The easiest way for a Foreigner to acquire property is if he/she is married to a Filipino spouse. The Filipino spouse can then acquire the real property under his/her name; but since by virtue of marriage this will be declared as conjugal party, the foreign spouse interests will still be protected. In line with this reasoning, a Filipina who marries an alien will still retain her Philippine citizenship and thus is still able to purchase real property unless she has already renounced her Philippine citizenship.

Although an alien may encounter a lot of restrictions and limitations when purchasing Real Estate Property in Boracay (and elsewhere in the Philippines for that matter), he is free to buy and own a building. This property may be leased up to 25 years with the option of another 25 years, for a total of 50 years.