The 40% Foreign Ownership Limit in Philippine Condominiums Explained

Foreign individuals and foreign-owned entities cannot own more than 40% of the units (or, more precisely, 40% of the value or floor area allocated) in any Philippine condominium project, because Section 5 of the Condominium Act requires the condominium corporation holding the common areas to stay at least 60% Filipino-owned — and that cap is tracked project-wide, not floor-by-floor or building-wing by building-wing. The rule is the reason a foreign buyer can be told a specific tower in a mixed-use development is “full” for foreign buyers while an identical unit in the tower next door is still available. It applies whether you are buying pre-selling, buying resale, or inheriting a unit, and developers and condominium corporations, not any single government registry, are the ones responsible for tracking it (RA 4726, Sec. 5, Supreme Court E-Library).

Decision Snapshot

• What it is: A condominium corporation must keep at least 60% of its capital stock — both voting and non-voting shares — in Filipino hands at all times; in practice this caps total foreign ownership across a condo project at 40% (Condominium Act, RA 4726, Sec. 5).
• Where to check: There is no single public database showing a project’s current foreign-ownership percentage. You request a written certification from the developer (pre-selling) or the condominium corporation’s management/board (resale) before you pay a reservation fee.
• The key qualifying detail: The cap is computed project-wide across the whole condominium corporation, not per floor, per tower, or per building wing in a mixed-use project — though some developers voluntarily manage allocation by tower for their own marketing purposes.
• The main rule: Individually or combined, foreign nationals and foreign-owned corporations cannot push a project’s foreign-held share past 40%; buying a unit that would cross that line is not a transaction the developer or Register of Deeds can lawfully complete.
• An important caveat: Hereditary succession is the one named exception in Section 5 itself — a foreign heir can end up owning a unit that pushes a project over 40% simply because the law passed it to them, not because they bought it. Separately, Congress has had condominium law under active review in 2026, but that activity concerns redevelopment and dissolution voting thresholds, not the foreign-ownership cap itself.
• Next step: Get the developer’s or condominium corporation’s foreign-ownership allocation confirmed in writing before you commit money beyond a token reservation fee, especially for an in-demand tower or an older, fully sold-out resale project.

Why Condos Get an Exception the Constitution Otherwise Refuses

The starting point for every foreign-ownership question in Philippine real estate is Article XII, Section 7 of the 1987 Constitution: “Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain” (1987 Constitution, Art. XII, Sec. 7). Read together with Section 2’s 60% Filipino-ownership test for corporations, this reserves land ownership to Filipino citizens and to Filipino-controlled entities, with no ordinary statute able to override it — only a constitutional amendment can.

A condominium unit gets around this cleanly, not by exempting foreigners from the land rule, but by changing what is actually being sold. Under the Condominium Act, a unit is a distinct interest in real property, separate from the undivided land and common areas beneath the whole project (RA 4726, Sec. 2). The land and common areas stay owned collectively through the condominium corporation — and as long as that corporation itself stays at least 60% Filipino-owned, individual units can be conveyed to foreign buyers without anyone individually violating the constitutional land rule. This is the only mechanism under Philippine law that lets a foreign national hold a clean, fee-simple-equivalent title to real property in their own name, which is also why the 40% cap that makes it possible gets scrutinized so closely on both sides of a sale. Our guide to the Condominium Act (RA 4726) covers the master deed and condominium corporation mechanics that sit behind this structure in full; this guide focuses specifically on the foreign-ownership ceiling itself.

What Section 5 Actually Requires

Section 5 of RA 4726 states that “no condominium unit therein shall be conveyed or transferred to persons other than Filipino citizens, or corporations at least sixty percent of the capital stock of which belong to Filipino citizens, except in cases of hereditary succession” (RA 4726, Sec. 5). Two things in that sentence do most of the practical work:

• The rule is framed as a limit on the condominium corporation’s capital stock, not on any individual unit. A specific unit is not itself “40% foreign” or “Filipino-owned” — what matters is whether the project’s condominium corporation, taken as a whole, stays at least 60% Filipino in its capital stock. Buying a unit typically makes you a shareholder of that corporation in proportion to your unit’s participation interest, so every sale to a foreign buyer moves that ratio.
• Hereditary succession is the only exception written into the statute itself. No other carve-out — marriage to a Filipino citizen, long residency, or a pending investment — exempts a transfer from the cap. A foreign spouse buying a unit is treated the same as any other foreign buyer for purposes of the 40% ceiling.

The Securities and Exchange Commission, which registers every condominium corporation as a stock corporation under the Corporation Code, applies its general rules on nationality compliance to condominium corporations the same way it does to any other partly nationalized entity. Under SEC Memorandum Circular No. 8, Series of 2013, a covered corporation must meet the Filipino-ownership threshold on both of two measures at once: the shares entitled to vote for directors, and the total outstanding shares, voting or not (SEC Memorandum Circular No. 8, s. 2013). In practice, that means a condominium corporation cannot satisfy the 60% Filipino requirement on paper through non-voting shares alone while foreign shareholders hold effective voting control — both counts have to clear 60% Filipino ownership, and the corporate secretary is responsible for continuously monitoring compliance.

How the 40% Ceiling Is Actually Computed and Tracked

There is no government portal a buyer can check the way they can pull a Certified True Copy of a title from the LRA eSerbisyo system. Compliance monitoring sits with the developer during pre-selling and with the condominium corporation’s board and management once turnover happens, and in practice this works out to a few consistent patterns:

• Project-wide, not per floor or tower. The 60/40 test applies to the condominium corporation’s capital stock as a whole. A mixed-use development with several towers under one condominium corporation applies the cap across the entire project’s share register, even though many developers choose, as an internal sales-management decision rather than a legal requirement, to allocate a rough foreign-buyer quota tower by tower so no single building fills up disproportionately.
• Measured by ownership share, which usually tracks unit participation interest. Because a buyer’s shareholding in the condominium corporation is typically proportional to their unit’s percentage interest in the common areas (set out in the Master Deed), the 40% ceiling functions in practice as roughly 40% of the project’s total saleable area or unit count going to foreign buyers, though the technically controlling figure is always the capital-stock ratio itself.
• Developers track a running foreign-allocation tally during pre-selling and will typically disclose, on request, how much room remains before accepting a foreign buyer’s reservation. Once a tower or project is fully sold out to its foreign quota, developers commonly hold a waitlist or simply decline further foreign reservations for that project.
• Resale transfers are checked the same way as new sales. A resale unit already carries a Condominium Certificate of Title (CCT), but transferring it to a foreign buyer still has to pass the same 60/40 test at the time of transfer — a project that has since filled its foreign quota (for example, because other owners sold to foreign buyers after the original unit was first sold) can make a resale to a foreign buyer legally impossible even though the unit itself is perfectly clean.

What Happens If a Sale Would Push a Project Over 40%

Section 5’s language is a restriction on the conveyance itself — it says a unit “shall not be conveyed or transferred” to a non-qualifying buyer beyond the ratio, not merely that such a transfer is discouraged. In practical terms, this plays out at two points:

1. Before the sale. A developer or condominium corporation that is tracking its ratio correctly will simply decline to accept a foreign buyer’s reservation or sale once the project’s allocation is full, or will require the buyer to wait for a resale exit from an existing foreign owner instead of a new unit.
2. At registration. Because Section 5 makes the restriction a condition of lawful conveyance, a transfer that would breach the cap is not one the Registry of Deeds should register as a valid transfer of a CCT, and Philippine legal commentary generally treats such a conveyance as legally infirm from the outset rather than merely voidable after the fact (see, for example, the discussion in NDV Law’s overview of foreign condominium ownership). This is a strong reason not to rely on an informal assurance from a broker that “there’s still room” — get it in writing from the developer or the condominium corporation itself, since a broker’s casual assurance carries no legal weight if the numbers turn out to be wrong.

Comparing the Cap to Other Foreign Ownership Paths

The 40% condo cap is the most generous foreign-ownership path in Philippine real estate, but it is easy to conflate with rules that work differently. Our guide on whether foreigners can buy property in the Philippines covers all of these paths in full; here is how the condo-specific rule compares to the alternatives a foreign buyer usually considers next:

Cases That Trip Up Buyers

Condotel and mixed-use units

A condotel unit — sold with a title but operated as part of a hotel pool — is still, legally, a condominium unit issued a CCT under RA 4726, so the same 40% cap applies to it the same way it applies to a purely residential unit in the same corporation. Buyers sometimes assume hotel-branded or income-generating units sit outside the ordinary condominium rules; they generally do not, unless the specific project structures unit ownership differently (for example, through a leasehold or timeshare arrangement rather than a titled unit, which is a different legal product entirely and worth confirming before you buy).

Buying through a Filipino nominee to get around the cap

Once a project’s foreign allocation is full, some buyers are tempted to put a unit in a Filipino relative, friend, or nominee’s name while the foreign buyer actually funds and controls it. This runs into the same Anti-Dummy Law risk that applies to land-holding corporations: using a Filipino citizen as a simulated or “dummy” owner to let a foreigner exercise ownership rights the law reserves to Filipinos is a criminal offense, not a paperwork workaround (Commonwealth Act No. 108, as amended). A condo unit is one of the few assets a foreigner can already own honestly and directly — there is rarely a good reason to trade that clean title for a nominee arrangement that carries criminal exposure for both parties.

Marriage to a Filipino citizen

Unlike land, a condo unit can be bought and titled directly in a foreign spouse’s own name, since RA 4726 does not exempt Filipino spouses’ foreign partners from the ordinary buyer rules — it simply treats them as any other foreign buyer subject to the 40% project cap. Couples sometimes assume a unit must be titled to the Filipino spouse alone the way land has to be; for a condo, that is a choice, not a legal requirement.

A Related 2026 Legislative Note

Condominium law has been under active legislative attention in 2026, with a bill generally described as the Condominium Redevelopment Act moving through Congress to ease the near-unanimous owner-consent threshold RA 4726 currently sets for redeveloping or dissolving aging condominium corporations. That effort is worth watching if you are buying into an older project, but it is a separate track from Section 5’s foreign-ownership rule — nothing in that legislative activity proposes to raise, lower, or otherwise change the 40% cap itself. Treat the redevelopment bill and the foreign-ownership cap as two unrelated questions, and confirm either one’s current status directly with DHSUD, the SEC, or a Philippine real estate lawyer before relying on it for a transaction, since bill status can change quickly once a measure reaches the floor.

Worked Example: Checking a Project’s Room Under the Cap (Hypothetical)

The scenario below is illustrative only — not a real transaction, and not legal or investment advice.

• Setup: A Singaporean buyer is considering a resale unit in a 500-unit Metro Manila condominium project and asks the condominium corporation’s management office for the current foreign-ownership status before making an offer.
• What the corporation reports: Based on its share register, foreign nationals and foreign-owned entities currently hold units representing 38.6% of the condominium corporation’s capital stock.
• What that means for this purchase: The specific unit under consideration represents 0.2% of the project’s total participation interest. Adding it to the existing 38.6% would bring foreign ownership to 38.8% — still under the 40% ceiling, so the transfer can proceed.
• The caveat the buyer is given: The 38.6% figure is a snapshot; other pending foreign sales elsewhere in the same project, not yet reflected in the register, could still push the project over 40% before this transaction is registered, so the corporation recommends completing the transfer promptly rather than treating the confirmation as open-ended.
• Result: The buyer proceeds, but insists the written confirmation of remaining allocation and the transfer date are both on record with the transaction documents, precisely because the ratio is a moving target until each sale actually registers.

What to Verify Before You Rely on This

• Get the current foreign-ownership percentage in writing from the developer (pre-selling) or the condominium corporation’s management/board (resale) before paying beyond a token reservation fee.
• Ask whether the figure you were given is project-wide or tower-specific, and confirm which condominium corporation actually governs the unit you are buying if the development has more than one.
• For a resale unit, request the condominium corporation’s current share register or an equivalent management certification, not just the seller’s own CCT, since the seller’s title alone does not show the project’s aggregate ratio.
• Confirm your own transaction will be registered promptly once cleared, since the ratio can shift with other pending sales in the same project.
• Never rely on a nominee or Filipino-name arrangement to exceed the cap — have any structure you’re unsure about reviewed by a Philippine real estate lawyer before funding it.
• If you are a dual citizen or former natural-born Filipino, confirm your specific citizenship status, since the 40% foreign cap does not apply to Filipino citizens, including those who reacquired citizenship under RA 9225.

Frequently Asked Questions

What is the 40% foreign ownership rule for Philippine condos?

It is the practical effect of Section 5 of the Condominium Act (RA 4726), which requires a condominium corporation to stay at least 60% Filipino-owned in its capital stock. Since buying a unit typically makes you a shareholder of that corporation, foreign buyers collectively cannot hold more than 40% of it.

Is the cap 40% of units, floor area, or something else?

The legally controlling measure is the condominium corporation’s capital stock. Because shareholding is usually proportional to each unit’s participation interest in the common areas, this works out in practice to roughly 40% of the project’s saleable area or unit count, but the number a developer or condominium corporation should ultimately be checking is the capital-stock ratio itself.

Does the cap apply per tower in a mixed-use project?

Legally, the test applies to the condominium corporation as a whole, which can cover multiple towers under one project. Some developers manage foreign-buyer quotas tower by tower as an internal sales practice, but that is a business choice layered on top of the legal requirement, not a separate legal cap.

Can a foreigner buy a condo unit if they are married to a Filipino citizen?

Yes, and the unit can be titled directly in the foreign spouse’s own name. Unlike land, RA 4726 does not exempt a Filipino citizen’s foreign spouse from the ordinary 40% cap that applies to any other foreign buyer.

Does the 40% cap apply to condotel units?

Generally yes. A condotel unit sold with a Condominium Certificate of Title is still a condominium unit under RA 4726, so it is subject to the same foreign-ownership cap as any other unit in the project, unless the specific project uses a different legal structure such as a leasehold or timeshare rather than titled ownership.

What happens if a purchase would push a project over 40% foreign ownership?

The developer or condominium corporation should decline to complete that specific sale, since Section 5 restricts conveyances beyond the ratio. A transfer that did proceed despite breaching the cap would not be a conveyance the Registry of Deeds should lawfully register.

Can a foreigner use a Filipino nominee to buy more than their share allows?

No. Using a Filipino citizen as a simulated owner so a foreigner can exceed the cap is a criminal offense under the Anti-Dummy Law (Commonwealth Act No. 108, as amended), separate from and in addition to the invalidity of the underlying transfer.

How do I check a project’s current foreign-ownership percentage before buying?

There is no public government registry for this. Request written confirmation directly from the developer’s sales office for a pre-selling unit, or from the condominium corporation’s management or board for a resale unit, before committing beyond a reservation fee.

What to Do Next

If you are a foreign buyer evaluating a specific condo unit, do not treat “there’s still room under the cap” as something you can take on a broker’s word. Ask the developer or the condominium corporation’s management for the project’s current foreign-ownership percentage in writing, confirm whether that figure is project-wide or tower-specific, and get your transfer registered promptly once you proceed, since the ratio moves with every other pending sale in the same project. If a structure involving a Filipino nominee or a corporate vehicle comes up as a workaround once a project is full, have it reviewed by a Philippine real estate lawyer before any money changes hands — the Anti-Dummy Law’s exposure applies to both sides of that arrangement.

Figures and legal provisions in this article reflect published statutory text and government sources as of September 24, 2026. RA 4726, related SEC and DHSUD issuances, and any pending condominium legislation can change by further legislation, amendment, or agency issuance. Always confirm a specific project’s current foreign-ownership allocation with the developer or condominium corporation, and confirm current rules with DHSUD, the SEC, or a licensed Philippine real estate lawyer, before relying on this guide for an actual transaction.