Buying in Manila vs the US: condos, land and taxes

An American can own a condo in Makati outright. The house-and-lot in Alabang is another story, because the Philippine Constitution keeps land in Filipino hands.

The short version

Foreigners generally can't own land in the Philippines. The exceptions are narrow: inheritance, and former Filipino citizens [1].
Condos are the open door. Foreigners can own units as long as foreign ownership in the project stays at or under 40% [2].
Selling triggers a 6% Philippine capital gains tax on the higher of the price or the government's zonal or fair market value, paid by the seller, plus a 1.5% documentary stamp tax usually paid by the buyer [3].
The IRS taxes your worldwide gain anyway. Section 121 shelters up to USD 250,000 (USD 500,000 joint) on a main home [4]. Whether the 6% Philippine tax can be credited is a question for a preparer [5].
Keeping a house in Honolulu you've moved out of? The exclusion only lasts while you pass the 2-of-5-years test [4].

USD conversions use the European Central Bank cross rate of October 30, 2026 (USD 1 = PHP 63.68), rounded. Most costs here are percentages, so the math works in any currency.

Can Americans buy in Manila?

Here's how the rules sort out, based on the Constitution, the Condominium Act and Supreme Court case law [1][2]:

What you want to buy	Can an American own it?
A condo unit in Makati, BGC, Ortigas or Rockwell	Yes, if foreign owners hold no more than 40% of the project. The land belongs to the condominium corporation, not to you [2]
A house and lot, or a vacant lot	Generally no. Foreigners can't own land [1]
Land you inherit from a Filipino relative by law	Yes, inheritance is an exception [1]
Land if you're a former natural-born Filipino who became a US citizen	Yes, within area limits set by law; reacquiring Philippine citizenship removes the limits
A house on land your Filipino spouse owns	Your spouse owns the land; you can't. Get a lawyer's advice on how the house and any money you put in are protected
A long-term lease of land	Yes. Long leases are allowed and are how many foreigners build or occupy houses

Two warnings. Don't buy land through a Filipino "dummy" nominee or a company you secretly control. That violates the law and the courts can unwind the deal, leaving you with no title and a fight to get your money back [1][2]. And before you buy a condo, ask the developer or the condo corporation to confirm in writing that the 40% foreign cap hasn't been reached, because title can't be transferred to you if it has [2].

Much of what foreigners buy in Manila is preselling, meaning it's not built yet. You pay in installments to the developer during construction, and delivery dates can slip. Check that the developer holds a license to sell for that project from the Department of Human Settlements and Urban Development (DHSUD) and keep every receipt.

Getting a loan: Philippine bank or US lender?

In Manila. Philippine bank mortgages for foreigners are rare and tied to local residency and income. Most Americans pay cash, use a developer's in-house installment plan during construction, or pay a large lump sum at turnover. In-house financing after turnover is usually priced well above bank rates. Rates move more than you're used to, and long fixed periods like a US 30-year fixed aren't the norm.

Back home. Many Americans buy in Manila with US money: savings, a cash-out refinance or a home equity line on a US home. US lenders are cautious with borrowers abroad and foreign income, so line up the loan before you move if you can. Our guide to US mortgages for Americans living abroad explains what lenders ask for.

The currency trap. If you do borrow in pesos, the IRS measures that loan in dollars. A weaker peso while you owe it can create a taxable US currency gain when you pay it off, even though you repaid exactly what you borrowed. Our guide to currency gains on a foreign mortgage explains it.

Costs side by side

Rates as of November 2026.

	Manila	Honolulu (the US example)
Can you buy?	Condo units only, within the 40% foreign cap; no land [1][2]	Yes, no restrictions on US citizens
Documentary stamp tax	1.5% of the higher of price or fair market value; usually the buyer [3]	Hawaii conveyance tax on a sliding scale, customarily paid by the seller
Local transfer tax	A fraction of a percent, set by the city; buyer pays within 60 days [3]	None separate from the state conveyance tax
Registration	Registry of Deeds fees and issuance of a new condo title	Escrow, title insurance and recording fees
Agent fees	Usually paid by the seller	Commission usually paid by the seller; negotiable
Annual property tax	Real property tax on the assessed value, which is a fraction of market value; Metro Manila cities add a special education fund levy	City and county property tax; owner-occupiers can claim a home exemption
Monthly dues	Condo association dues, often significant in the newer towers	HOA or condo fees, depending on the building
Tax on selling	6% capital gains tax on the higher of price or zonal/fair market value, paid by the seller, whether you made a profit or not [3]	Federal tax after Section 121; Hawaii income tax and HARPTA withholding for sellers who aren't Hawaii residents
US tax on the gain	Yes, worldwide, in dollars [4][5]	Yes, with Section 121 if you pass 2 of 5 years [4]

Illustration only. On a condo sold for 10 million pesos (about USD 157,000), the seller's capital gains tax is 600,000 pesos (about USD 9,400; 6%) if the government's zonal value isn't higher, and the buyer's documentary stamp tax is 150,000 pesos (about USD 2,360; 1.5%), before the city transfer tax and registration fees [3]. That 6% is due even if you sell at a loss, which surprises many Americans.

Tax when you sell

The Philippine side

The Philippines taxes a sale of real property held as a capital asset at a single 6% rate on the gross selling price or the fair market value or zonal value, whichever is higher. It isn't a tax on your profit. The seller files BIR Form 1706 within 30 days of the sale [3]. If the home is your principal residence and you reinvest the proceeds in a new principal residence within 18 months, the tax can be exempt, after you notify the BIR and escrow the tax. This works once every 10 years [3].

The US side

Uncle Sam taxes your worldwide gain, in dollars:

Section 121 can cover a Manila condo. Own it and live in it as your main home for at least 24 months of the 5 years before the sale, and up to USD 250,000 of gain (USD 500,000 for most joint filers) is excluded [4]. The rules don't limit it to US homes.
The credit is the tricky part. The foreign tax credit covers foreign income taxes [5]. The Philippine 6% tax falls on the gross price, not on your gain, so whether and how much of it you can credit against US tax needs a careful look. A US expat tax preparer can check your situation.
Currency counts. Your dollar cost uses the exchange rate when you bought and your proceeds the rate when you sell. A peso that slid over the years can wipe out a peso gain in dollar terms, and a stronger peso can do the opposite.

Your old house in Honolulu

The 2-of-5-years clock keeps ticking after you move. Once you've been gone more than three years, the exclusion is usually lost, and depreciation from renting the house out is taxed on sale either way. Hawaii also taxes gains on Hawaii property and requires withholding when a seller isn't a Hawaii resident. Our guide to selling your US home after moving abroad walks through it.

Renting it out

The Philippine side. Rent from a Manila condo is Philippine-source income, and you'll need a taxpayer identification number (TIN) and BIR registration to report it. The rate depends on whether you live in the Philippines: residents generally pay graduated income tax on net rent, while nonresident foreigners face a fixed-rate tax on the gross rent. Many condo buildings restrict short-term rentals, so read the house rules before you count on vacation-rental income.

The US side. Report the rent on Schedule E. A Manila condo is used predominantly outside the United States, so you must depreciate it under the Alternative Depreciation System over 30 years, not the 27.5 years you'd use for a Honolulu rental [6][7]. Philippine income tax on the rent can go on Form 1116.

If it's the Honolulu house you're renting out, see our guide to rental income from a US property.

Which makes sense for whom

Retiring in Manila on an SRRV. A condo you live in can make sense, especially in a walkable area like BGC or Rockwell. Just know the land is never yours, and plan who inherits the unit under both systems. See wills and estate planning across two countries.
Married to a Filipino. Your spouse can own a house and lot; you can't. Talk to a lawyer about how the property is titled and what happens if your spouse dies first.
Former Filipino, now a US citizen. Dual citizenship can restore your right to own land without the area limits, which changes the math entirely.
Moving back in a few years. Renting in Manila is usually the simpler choice. Resale condos can take a long time to sell, the 6% tax applies at any price, and a weaker peso can leave you with less in dollars than you put in.

Want to compare notes with people who've bought? Ask in our community group for Americans in the Philippines. A US expat tax preparer (or a Philippine lawyer) can check your situation before you sign a reservation agreement.

Buying in Manila vs back home: condos yes, land no