Asked how many islands there were in the Philippines at the 1994 Miss Universe pageant, Miss Philippines shot back: “High tide or low tide?”
Had Twitter or Facebook existed in 1994, the phrase would likely have caught on, and US President-elect Donald Trump, who bought the pageant two years later, would have most certainly had some 140 characters to spare.
The correct answer of course was 7,107 — 7,500 according to this recent study — and dozens of these are for sale. An American billionaire even anonymously bought one for USD2 billion a few years back.
Having a Philippine island for your personal hideaway is truly the pinnacle of exclusivity, but it is hardly a Moses-parted walk in the sea, especially for foreigners. When it comes to purchasing private islands in the Philippines, knowledge of local regulations will mean the difference between basking in paradise and getting beached.
Sea’s the limit
Call it a hangover from centuries of foreign occupation, but the sale of freehold land to non-citizens is constitutional taboo in the Philippines. All the foreign ownership limits that govern the bigger islands apply to the panoply of isles, islets, and keys that dot this part of Asia.
Foreigners can always purchase the leasehold on an island though. Lease terms are available to prospective foreign land buyers for up to 50 years, with opportunities for a 25-year renewal.
Say ‘I do’
Leasing a private island is a viable option if you’re not thinking of passing down the property to an heir anyway. However, you can buy land in your Filipino spouse’s name.
To the courts, your wife or husband owns the property, but you are entitled to inherit it in the event of his or her death. (Don’t get any ideas.)
Incorporation
Foreigners can also gain control of a Philippine island via incorporation. A corporation, partnership, or association that is duly constituted under Philippine laws may serve as a landholding company, as long as a Filipino citizen has at least 60 percent of the equity.
Verify the title
You’ll be confronted with plenty of island properties for sale in the Philippines, but it’s essential to check with the local registry of deeds to verify the island title’s authenticity. Many islands are deemed tax declaration properties, i.e. land parcels with no titles but are salable anyway because the owner has declared the land for tax purposes.
Beware of getting embroiled in disputes and claims over islands, especially those that have been with a family for generations. Take care to look up the chain of ownership.
Beaches are still public domain
Shorelines and riverbanks are considered public property in the Philippines. If you plan on developing the island as an exclusive resort, you may need what is known as a foreshore lease, usually procured from the Department of the Environment and Natural Resources.
This government concession gives you control over the foreshore, defined as the strip of the coast covered by the ebb and flow of the tide, for 25 years, with possibility of an extension for another 25.
Right of way
Know that everyone still has the inherent right of access to beaches — even if that beach is on another island such as yours. Current public easement laws forbid permanent structures on the beach or within 20 metres of the high tide mark.
In beaches designated as ‘forest areas,’ this setback zone could extend up to 40 metres. Liaise with a qualified real estate broker on how to navigate such particulars, as well as the local building and construction codes in the area, before you finalise the sale.
Inspect the island
Google images are not the entire picture. You need to fly to the island and see it in all its paradisiac glory, flaws and all. Some islands may have marshy conditions and require filling with silt or sediment, or may be lined with mangrove forests, which have come under conservation status.
Like many tropical areas in the world, the Philippines is known for being crisscrossed by typhoon belts, so time your on-site viewing accordingly.
Get the proper appraisal
Sales of private islands in the same area, let alone those of similar sizes, can be infrequent, making island real estate a truly rarefied, niche market even for an archipelago like the Philippines.
Due to the rarity of island real estate transactions, proper valuation could be troublesome. Keep this in mind when negotiating with a real estate broker. Your legal counsel will have the last word on your island purchase.
If you set out to make time for your island for more than just two weekends in a year, then an island purchase may yet be a sensible one. Surround yourself with contacts as fluent in your language as they are with the lay of the land, and your island purchase will go swimmingly well.
This story was originally published on www.property-report.com on 6 December 2016.
