Land is such a scarce resource, and a finite one at that.
And given our growing population, I believe that legislators should carefully rethink any proposal to allow foreign ownership of land. To date, foreigners can buy and own condominium units, but not land. Foreign corporations can lease land, such as those in economic zones, but not purchase them.
On one hand, allowing foreign ownership of land may lead to more foreign investments. Some quarters insist that ownership can be a major incentive. And more foreign investments will help address the need for more capital to pay for all the needed infrastructure as well as to put up all the big industries that can make the Philippines a wealthy economy.
On the other hand, considering the prices of land today, wealthy foreigners may very well crowd out Filipinos striving to buy and own land for themselves. And business and industrial needs, which tend to be more profitable, may then be prioritized over farming, food production, and housing particularly for the poor.
One argument in favor of allowing foreign ownership is, if foreigners are allowed to buy and own land, they can never take the land back home, anyway. At the same time, to make their Philippine property productive and profitable, they will have to make additional investments either in development or production. In turn, the investments will create jobs, wages, and taxes.
My counter to this: even without land ownership, foreign investors are already doing the same thing. Even if they just lease lands in economic zones, long term, they still invest in production, and thus create jobs, wages, and taxes. Many opt to partner with local companies in real estate development. In short, even without owning land, they still put money in.
In China, I believe, both locals and foreigners cannot own land. The State owns all the land, but it allows locals the privilege to use land through lease. Maximum lease is 70 years for residences, 50 years for industries, 40 years for commercial purposes and recreation and tourism, and 50 years for schools and hospitals and the like. Lease renewal is at the government’s discretion. In addition, I believe there are no property taxes in China.
I can appreciate the logic in doing things this way, especially in a country where the population is incredibly large while land area is limited. In addition to housing, a big chunk of land should also be dedicated to agriculture. The government must ensure that the country can produce enough food to feed the population. Otherwise, problems will surely arise.
India, a country similar to China with respect to having a large population, also prohibits foreigners from buying land. According to India’s Ministry of External Affairs, a foreign national of non-Indian origin, and a resident outside India, cannot purchase any immovable property in India unless such property is acquired by way of inheritance from a person who was resident in India. India allows foreigners to lease, but not exceeding five years. Foreign residents, however, may purchase land but under certain conditions only.
On the other hand, in Japan, foreigners can buy land as long as they can afford it. Real estate brokerage firm Japan Property Central claims there are currently no laws or regulations in Japan that prohibit or control the purchase of Japanese real estate by foreigners. There are no restrictions with respect to residency or visa status.
The broker even claims that foreigners can buy and own Japanese real estate without ever having visited the country, and that property titles can be registered to a foreign address no matter where the buyer resides. Foreigners can buy and sell land, homes, apartments, golf courses, private islands, apartments, or entire buildings in Japan. However, purchasing and owning real estate in Japan will not make one eligible for a residency permit.
In Malaysia, foreigners can fully own any type of property except those valued below one million Malaysian Ringgit (or $250,000), or roughly $13 million. In Thailand, foreigners cannot own land, but can opt for a 30-year leasehold through a limited company. Apartments or condominiums can be purchased by foreigners as long as at least 51% of the building is owned by Thais.
Singapore, despite having a very small territory, is not insecure about foreign ownership. On the island-state, foreigners can buy property, but with certain restrictions. They can also own private apartments or condominiums, if they can afford them. But, only Singapore nationals and permanent residents can avail units in developments up by the state-run Housing & Development Board (HBD).
And in the United States, as many Filipinos already now, even nonresident foreigners can buy property. In fact, many wealthy Filipinos own houses or apartments or condominium units in either the East Coast or the West Coast, with some owning properties on both coasts. Most of these houses are occupied by their owners only during spring or fall-winter.
To date, an overwhelming majority of the over 100 million Filipinos do not have land of their own: either farms or homes. New housing developments as well as condominium units particularly in highly urbanized areas have become very expensive. Our population is growing. Our land resource is limited. Given such, should we still consider allowing foreign ownership of land?
Marvin A. Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.