Condo Investment for Foreigners in the Philippines: the Math

Condo investment for foreigners in the Philippines rests on one legal fact and three numbers. The legal fact is that a condominium unit is the only form of real property a foreign individual can hold in his or her own name. The numbers are the rent the unit earns, the tax the Philippines takes from a non resident landlord, and the price per square meter going in. Most of what is written for foreign buyers covers the first point and stops. This guide does the arithmetic: gross yields by city from our own price index, what is left after tax and costs, how the 40% foreign cap works in practice, and which cities make sense for which investor.

What you can buy, and the 40% line

The Condominium Act, Republic Act 4726, allows units to be transferred to foreigners so long as Filipino citizens, or corporations at least 60% Filipino owned, hold at least 60% of the project. In practice that means foreign ownership in any one condominium corporation is capped at 40%. Land, houses with their lots and townhouses with land titles remain closed, a line we trace in detail in our guide to what foreigners can and cannot own.

The cap matters when you buy a resale unit in a building popular with foreign buyers, in parts of BGC, Makati and Mactan in particular. Before you pay a reservation, ask the property management office or the condominium corporation for a written certification of the current foreign ownership percentage, and make the sale conditional on the transfer being allowed. A developer selling new units tracks the quota itself and will tell you whether the foreign allocation in a tower is still open. The step by step purchase, from reservation to title, is in our foreign buyer's guide.

Gross yields by city, from our price index

Our quarterly price index takes the median asking price per square meter to buy and to rent in each city. Dividing twelve months of rent by the purchase price gives a gross yield, before tax, dues and vacancy. For the third quarter of 2026:

Two cautions before you book a flight to Davao. The samples outside Metro Manila are small, 11 to 15 price points each against 45 to 57 rentals in Taguig and Makati, and the units for rent are not the same units that are for sale, so the provincial figures flatter the yield. And asking rents are not achieved rents. Read the table as a ranking: the business districts of the capital pay the least for every peso invested, the regional cities pay the most, and the gap is wide enough to survive the statistical noise. The live figures are on the price index report.

What is left after tax

The tax on rental income depends on your status, and the difference is large. A non resident alien who is not engaged in trade or business in the Philippines, which describes most foreign owners who visit for less than 180 days a year, pays a final withholding tax of 25% on the gross rent, with no deductions for dues, repairs or agent fees. A foreigner who is resident, or treated as engaged in business here, is taxed like a Filipino landlord: graduated rates on net income, or the optional 8% on gross receipts when they do not exceed ₱3 million (about $47,800 / €41,700) a year. The rules are summarized in a Respicio & Co. commentary on rental income tax, and a Philippine accountant should confirm which status applies to you before you sign a lease.

Run it on a real unit. The median one bedroom among the condos for sale in Makati in our sample asks ₱10 million (about $159,000 / €139,000) and the median one bedroom rent is ₱35,000 (about $557 / €486) a month, or ₱420,000 (about $6,690 / €5,840) a year: a gross yield of 4.2%. At 25% on the gross, the tax is ₱105,000 (about $1,670 / €1,460) and the yield drops to about 3.2%, before association dues, which the owner usually pays, and before any vacancy. The same arithmetic on Cebu City's 7.2% index yield leaves about 5.4% after the 25% tax, and on Lapu-Lapu's 10.8% about 8.1%.

Other taxes are smaller. Residential units rented at ₱15,000 (about $239 / €208) a month or less are exempt from value added tax, and a landlord whose gross receipts stay under ₱3 million (about $47,800 / €41,700) a year pays 3% percentage tax instead of 12% VAT. When the tenant is a company, it withholds 5% of the rent as a creditable tax and gives you a certificate for it. On the way in, budget about 3% of the price for the buyer's closing costs; on the way out the seller pays 6% capital gains tax. Our closing costs guide has the full split.

Which city for which investor

BGC and Makati are liquidity, not yield. Units rent in days to expatriates and corporate tenants at ₱35,000 to ₱40,000 (about $557 to $637 / €486 to €556) for a one bedroom, and resell to the deepest buyer pool in the country, but at ₱195,000 to ₱200,000 (about $3,110 to $3,180 / €2,710 to €2,780) per square meter the net return after a 25% tax is around 3% to 4.5%. They suit the investor whose first aim is to hold value in a hard asset; the price bands inside each district are in our guides to condo prices per square meter in Taguig and BGC and in Makati.

Quezon City and Cebu City are the middle: ₱100,000 to ₱110,000 (about $1,590 to $1,750 / €1,390 to €1,530) per square meter, yields of 7% to 8% gross, tenants who are students, BPO staff and young families, and a resale market that is slower but real. Cebu adds an international airport and a tourism economy, and our Cebu area guide sets out its districts.

Mactan and Davao top the table because prices are still near ₱65,000 to ₱68,000 (about $1,040 to $1,080 / €903 to €945) per square meter. In Mactan the rent comes from resort workers, aviation staff and short stay guests, and the question to settle first is whether the building allows short term letting; the hotel operated version of the same idea is covered in our piece on condotel investment. Davao rents to locals and regional professionals, with little foreign demand, which makes resale to another foreigner harder.

The costs that do not show in the yield

Association dues, real property tax, insurance, a property manager if you live abroad, furniture for the expatriate market, and the months between tenants. Together they take a visible slice of the gross rent before tax, which is why the comparison that matters is net yield, and why our plain guide to rental yields across Philippine cities insists on it. If you will manage from overseas, read the landlord's guide to renting out a condo before you choose a building, because a good management office is worth more than half a point of yield.

Bring the money in through a bank and keep the inward remittance records, since you will need them to send the proceeds home when you sell. And buy in your own name only what the law lets you own; arrangements that put land in a Filipino partner's name are gifts in the eyes of the courts.

This article is general information, not investment, legal or tax advice. Yields are computed from BalayHub's listing price sample and are asking figures, not achieved returns; confirm your tax status with a Philippine accountant before you invest.

Dollar and euro figures are approximate conversions at ₱62.8 per US dollar and ₱72.0 per euro (ECB reference rates, 2026-09-18).