Republic Act No. 12252, approved on 3 September 2025, lets a foreign investor with an approved and registered investment lease private land for up to 99 years in total — up from the old “50 years plus one 25-year renewal” under the Investors’ Lease Act. It is a tool for factories, industrial estates, tourism projects of at least US$5 million and similar enterprises; it does not let foreigners lease a lot for a private house for 99 years, and it does not change the rule that foreigners cannot own land. The REIT changes that followed came from the Securities and Exchange Commission’s amended rules in January 2026, not from a new law. Neither change has a measurable, immediate effect on condo prices, so treat claims that they will lift residential values with caution.
Key points
- RA 12252 sets a 99-year maximum aggregate term. Renewals require mutual agreement and proof of social and economic contributions.
- The land must be used solely for the registered investment, and the lease must be registered and annotated on the title.
- Foreigners leasing land without a registered investment remain under PD 471: 25 years, renewable once for 25.
- The REIT Act (RA 9856) was not amended by Congress in 2025, as far as we could find. The SEC widened REIT-eligible assets, including infrastructure, through Memorandum Circular No. 1, s. 2026.
- For individual buyers, both changes are background policy: useful context, not a reason to buy any specific property.
What RA 12252 changed in the Investors’ Lease Act
| Item | RA 7652 as enacted (1993) | RA 7652 as amended by RA 12252 (2025) |
|---|---|---|
| Maximum term | 50 years, renewable once for up to 25 years | Aggregate period not exceeding 99 years; the President may impose a shorter term for critical infrastructure, national security or national-development priorities |
| Renewal | On proof of social and economic contributions | Only by mutual agreement (a lessee-option clause is read that way), plus proof of social and economic contributions |
| Who qualifies | Foreign investors investing in the Philippines | Foreign investors with an approved and registered investment under the Foreign Investments Act, CREATE/CREATE MORE, other applicable laws, or an investment promotion agency’s requirements |
| Registration | — | Lease must be registered with the Registry of Deeds and annotated on the title; registration is the act that binds third parties, and a registered lease cannot be attacked collaterally |
| Transfers and subleases | — | Leasehold may be sold, assigned or used as loan security; subleases need the lessor’s consent and must be registered; use conditions continue to apply |
| Tourism projects | — | Only projects with at least US$5 million of investment, 70% infused within three years of signing |
| Penalties | Void contract plus penalties | Void contract; fine of ₱1 million to ₱10 million or six months to six years’ imprisonment for terms beyond 99 years, unlawful use or excess area |
Summarised from the text of RA 12252 and the original RA 7652 on LawPhil. Read the full provisions with a lawyer before relying on any of them.
Who actually qualifies
The implementing rules (IRR), issued by the Department of Trade and Industry through the Board of Investments together with the Land Registration Authority, give the key definitions:
- Foreign investor: an individual or entity that is not a “Philippine national” — that is, not a Filipino citizen or a corporation at least 60% owned and controlled by Filipinos, with full beneficial ownership of the shares.
- Investing in the Philippines: an equity investment made through an actual remittance of foreign exchange or a transfer of assets, registered with the SEC or the DTI.
- Approved and registered investment: evidenced by documents such as a certificate of registration for an export enterprise or a certificate of incorporation or licence to do business for a domestic-market enterprise under the Foreign Investments Act, or a certificate of registration as a registered business enterprise of an investment promotion agency under CREATE as amended by CREATE MORE.
The leased area must be what the investment reasonably needs, subject to the agrarian reform law and the Local Government Code, and it must be used solely for the registered investment. The policy section of the law lists the intended uses: industrial estates, factories, assembly or processing plants, agro-industrial enterprises, land development for industrial or commercial use, tourism, agriculture, agro-forestry, ecological conservation and similar productive activities.
Rule II, Section 1 of the IRR: a lease of land by a foreign investor not investing in the Philippines as defined “shall continue to be covered by PD No. 471.” For a foreigner who simply wants a home, that means a lease of up to 25 years, renewable once for another 25 years by mutual agreement — or a condominium unit, which foreigners can own outright within the 40% foreign-interest limit. Our foreign buyer’s guide covers those options.
How a 99-year lease is registered
The IRR assigns screening to the agency that registered the investment:
- the BOI, for investments outside economic zones and freeports;
- the investment promotion agency administering the zone, for investments inside an economic zone or freeport;
- the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), for investments inside a tourism enterprise zone;
- the Fiscal Incentives Review Board, for CREATE-registered investments above ₱15 billion, on the investment promotion agency’s recommendation.
- Application: the investor files the prescribed form, the notarised lease and supporting documents with the agency.
- Screening: within 15 days the agency either flags deficiencies or notifies the Registry of Deeds that the lease qualifies.
- Registration: the Register of Deeds annotates the lease on the title within seven working days of complete submission and payment. For untitled land, the lease is recorded in the Primary Entry Book and annotated on the tax declaration.
- Reporting: within five days of annotation, the lessee submits proof of the investment, the lease and the annotated title to the agency, which keeps a masterlist and monitors compliance.
The notarised lease must contain mandatory provisions: the term with inclusive dates (no more than 99 years), the leased area, the purpose of the investment, a clause recognising the agency’s authority to terminate the lease if conditions are breached, and the lessee’s undertaking to make social and economic contributions if the lease is renewed.
When a lease can end early
- Withdrawal of the investment terminates the lease automatically. The IRR defines withdrawal as failing to operate the project for three consecutive years, or abandoning it; three consecutive months of unpaid rent combined with no operations counts as abandonment.
- Unauthorised use of the land also terminates the lease, without prejudice to the lessor’s claim for damages.
- Failure to start the project within three years of signing leads to an order to explain; if the project still does not start within the period given, the lease can be terminated after notice and hearing.
Older leases: leases approved under the original RA 7652 stay valid until their approved term ends. Renewal is allowed only if the lease meets the new conditions, and the total period including renewal cannot exceed 99 years. Leases within the law’s scope signed between 1 October 2025 and the IRR’s effectivity are allowed but must comply with the new requirements within one year of the IRR taking effect.
What the lease reform means for Cebu property buyers
The direct effect on someone buying a condo or a house and lot is limited. The law is aimed at enterprise land use, and its tourism threshold of US$5 million rules out small resort or rental projects. Any indirect effect — more foreign-backed industrial or tourism projects creating jobs and housing demand near them — would depend on investments actually being registered and built, and it is too early to see that in price or rent data. We are not aware of any official dataset that measures RA 12252’s effect on residential prices as of 3 October 2026.
For landowners, the law creates a clearer framework for long leases to qualifying foreign enterprises. A landowner approached about a long lease should check the investor’s registration documents, insist on the mandatory clauses and registration, and get independent legal advice on rent, improvements and what happens if the investment is withdrawn.
REITs: what they are, and what changed in 2026
A real estate investment trust under the REIT Act of 2009 (RA 9856) is a listed company that owns income-generating real estate. Among the Act’s core requirements:
- at least 75% of the REIT’s deposited property must be invested in, or consist of, income-generating real estate (Section 8.5);
- it must distribute at least 90% of its distributable income as dividends each year (Section 7);
- it must stay listed and have at least 1,000 public shareholders, each holding at least 50 shares, who together own at least one-third of the outstanding capital stock (Section 8.1).
REIT changes are sometimes described as having been “signed into law in 2025”. We could not find any such law: RA 9856 has not been amended by Congress as far as we found, and the Capital Markets Efficiency Promotion Act (RA 12214, approved 29 May 2025) contains no REIT-specific provisions. What did change is the SEC’s implementing rules. According to published legal alerts, SEC Memorandum Circular No. 1, Series of 2026, issued on 8 January 2026 and effective 25 January 2026:
- expands what counts as income-generating real estate to assets that produce recurring and predictable cash flows, expressly including infrastructure (transportation, telecommunications, energy), data centres, parking facilities and warehouses;
- allows these assets to be held through special purpose vehicles or joint ventures in which the REIT owns at least two-thirds of the voting stock, with at least 90% of their distributable income passed up to the REIT;
- extends the period for sponsors to reinvest the proceeds they receive from REIT transactions to up to two years, and allows reinvestment through equity, loans or debt instruments in Philippine real estate or infrastructure;
- caps management fees at 1% of the REIT’s net asset value.
We could not open the circular on the SEC website directly (automated access is blocked); the points above come from a law firm’s alert and a news report on it. Check the circular itself before relying on any detail.
REIT shares versus owning a unit
| Question | Owning a condo unit | Holding REIT shares |
|---|---|---|
| What you own | A specific unit with a title in your name | Shares in a listed company that owns a portfolio of assets |
| Use | You can live in it or rent it out | No use of the property |
| Income | Rent, minus dues, tax, repairs and vacancy — your responsibility | Dividends declared by the REIT, which can rise or fall |
| Selling | A property sale with taxes, fees and time to find a buyer | Shares traded on the stock exchange; prices move daily |
| Main risks | Vacancy, building management, resale price, financing costs | Share-price falls, dividend cuts, interest-rate sensitivity |
These are different products for different goals. If you are comparing them, the useful exercise is to calculate a condo’s net return honestly — rent after every expense, divided by the full acquisition cost — and to get advice on securities from someone licensed to give it. Our rental-yield guide walks through the condo side of that calculation.
Frequently asked questions
Can a foreign retiree use RA 12252 to lease a lot for a house for 99 years?
No. The 99-year term is available only to a foreign investor with an approved and registered investment, and the land must be used solely for that investment. The implementing rules say that a foreigner who is not investing in that sense stays under PD 471: 25 years, renewable once for 25 years by mutual agreement.
Does a 99-year lease renew automatically?
No. The law says the aggregate period of the lease cannot exceed 99 years, and any clause making the lease renewable at the lessee’s option is read as renewable only by mutual agreement. On renewal, the foreign lessee must also show social and economic contributions to the country.
What happens to leases signed under the old Investors’ Lease Act?
Under the IRR’s transitory rules, leases approved under the old RA 7652 stay valid until their approved term ends. A renewal is allowed only if the lease meets the new conditions, and the total period, including the renewal, cannot exceed 99 years.
Did Congress amend the REIT Act in 2025?
We found no amendment to RA 9856 by Congress as of 3 October 2026. The changes in this period came through SEC Memorandum Circular No. 1, Series of 2026, which amended the REIT implementing rules. It was issued on 8 January 2026 and took effect on 25 January 2026, according to published legal alerts.
Is buying REIT shares the same as owning property?
No. A REIT shareholder owns shares in a listed company that owns income-producing assets. You do not own a specific unit, cannot use or lease out the property, and the share price and dividends can fall. PropertEase is a real estate brokerage, not a licensed securities adviser, so speak to a licensed investment professional before buying shares.
Buying a condo as a foreigner or for income?
If you are weighing a condo purchase against other ways of investing in property, send us your budget and goal. We will show you the dated figures for specific Cebu projects — price, payment schedule and the charges on top — so you can compare like with like.
Ask for project figures WhatsApp +63 917 550 8229Sources and notes
- Republic Act No. 12252 (LawPhil) — approved 3 September 2025; amends Sections 2, 4, 5, 6 and 7 of RA 7652 and adds Sections 4-A, 5-A and 5-B
- Implementing Rules and Regulations of RA 12252 (DTI–BOI and LRA) — definitions, coverage, jurisdiction, registration procedure, mandatory contract provisions, termination and transitory rules; posted by the BOI in December 2025
- Republic Act No. 7652, Investors’ Lease Act, as originally enacted (LawPhil) — former limit of 50 years, renewable once for up to 25 years
- Presidential Decree No. 471 (LawPhil) — maximum lease of private land to aliens: 25 years, renewable for 25 years
- Republic Act No. 9856, Real Estate Investment Trust Act of 2009 (LawPhil) — lapsed into law 17 December 2009; Section 7 (90% dividend distribution), Section 8.1 (minimum public ownership), Section 8.5 (75% income-generating real estate)
- Cruz Marcelo & Tenefrancia — SEC amends REIT rules (legal alert) — summary of SEC MC No. 1, s. 2026: issued 8 January 2026, effective 25 January 2026; eligible assets, SPVs, reinvestment, fee cap
- Manila Bulletin — SEC expands REIT rules (9 January 2026) — news report on the same circular
- Republic Act No. 12214, Capital Markets Efficiency Promotion Act (LawPhil) — approved 29 May 2025; checked — contains no REIT-specific provisions