Ask the Pros: Can I Build a House on Agricultural Land?
If you're buying land, it's best to know its classification first
With many homeowners looking to invest in properties outside the Metro, you might be wondering about the processes involved in securing land where you can build your future home. Just because the land is for sale doesn’t mean you can just schedule construction as soon as possible.
According to the lawyers we talked to, lands may be classified as agricultural, residential, and commercial/industrial. Any prospective buyer of a lot must be aware of the classification of the land that he or she is planning to purchase.
Atty. Steffi Banaag, a practicing lawyer for seven years now, discusses the classifications of lands below and how the land can be re-classified according to the use you have in mind.
READ: Ask the Pros: What Taxes Do I Need to Pay if I Want to Buy or Sell Property?
Why is it important to know the classification of land before purchasing it?
You need to make sure that it’s safe and legal to build a house on the land you’re planning to buy. Depending on the purpose for which land is to be acquired, the buyer must first conduct an assessment as to the land classification of a property.
If what you’re eyeing is classified as agricultural land, note that titles to agricultural lands may not be transferred unless you secure the requisite Land Transfer Certificate or more commonly known as the DAR Clearance.
READ: Ask the Pros: How Do You Transfer a Land Title in the Philippines?
Can agricultural lands be reclassified?
According to Section 3, Article XII of the 1987 Constitution, agricultural lands may be further classified by law according to the uses which they may be devoted. Given this, lands must first be classified by law before there can be any land use conversion from agricultural to other uses.
Under Section 20 of the Local Government Code, the LGU, through its Sanggunian, has the power to classify lands into residential, industrial, or commercial by enacting a zoning ordinance.
For your reference and guidance, Section 20. Reclassification of Lands states that:
a. A city or municipality may, through an ordinance passed by the Sanggunian after conducting public hearings for the purpose, authorize the reclassification of agricultural lands and provide for the manner of their utilization or disposition in the following cases:
1. When the land ceases to be economically feasible and sound for agricultural purposes as determined by the Department of Agriculture
2. Where the land shall have substantially greater economic value for residential, commercial, or industrial purposes, as determined by the Sanggunian
Given this provision of the law, the Sangguniang Bayan may reclassify agricultural land for residential, commercial, or industrial purposes.
If you already have land in mind, coordinate closely with the seller so you can proceed with the assessment of the land to identify its classification. You can also visit the city hall to inquire about the next steps involved if you’ve decided to purchase the land.
Frequently Asked Questions on Building House on Agricultural Land in the Philippines
Can I build a house on agricultural land without reclassification?
In most cases, you cannot build a house on agricultural land without going through a reclassification process. Agricultural lands are typically intended for farming purposes, and converting them for residential use requires reclassification, which involves legal procedures and approvals.
What is the DAR Clearance?
DAR stands for the Department of Agrarian Reform. The DAR clearance, also known as the Land Transfer Certificate, is a document required when transferring titles of agricultural lands in the Philippines. It is necessary to show that the land has complied with agrarian reform laws and can be legally transferred.
How can I check the classification of a piece of land I want to buy?
You can check the classification of a land parcel by contacting the local government unit (LGU) or visiting the city hall where the land is located. They should have records of land classifications and can guide you through the process of determining the current status of the land.
What are the steps involved in reclassifying agricultural land for residential or other purposes?
Reclassifying agricultural land typically involves the following steps:
- Contact the Sanggunian (Local Government Unit) and inquire about the reclassification process.
- Attend public hearings to discuss the reclassification proposal.
The Sanggunian, based on expert and multiple evaluations, will determine whether the land is no longer economically feasible for agriculture or has greater economic value for other purposes. If approved, the land is reclassified for residential, commercial, or industrial use.
How long does the reclassification process usually take?
The duration of the reclassification process can vary depending on the local government's efficiency and the complexity of the case. It may take several months to a year or more to complete the entire process, from proposal to approval.
Is it essential to hire a lawyer when dealing with land reclassification?
While it's not mandatory, having legal representation can be beneficial, especially if you encounter any legal challenges during the reclassification process. A lawyer can provide guidance, ensure you follow all legal requirements, and help protect your interests.
Are there any additional costs associated with land reclassification?
Yes, there may be additional costs such as application fees, expert evaluations, and legal fees (if ever you decide to go the legal counsel route). It's essential to budget for these expenses when considering land reclassification.
What happens if the reclassification request is denied?
If the reclassification request is denied, you may not be able to proceed with building on the land for the intended purpose. In such cases, it's advisable to consult with a lawyer to explore alternative options or potential appeals.
Can I purchase agricultural land and use it for non-agricultural purposes without reclassification?
No, you generally cannot use agricultural land for non-agricultural purposes without reclassification. Agricultural land is intended for farming, and changing its use requires legal approval and reclassification.
Are there any restrictions on what type of structures can be built on reclassified agricultural land?
The specific restrictions on structures can vary depending on local zoning regulations. Once land is reclassified, it is typically subject to zoning ordinances that dictate the type of structures that can be built, including residential, commercial, or industrial developments. It's crucial to understand these regulations before proceeding with construction.
Do land reclassification rules vary from one municipality or city to another in the Philippines?
Yes, land reclassification rules and processes can vary from one municipality or city to another in the Philippines. Local government units have some discretion in how they handle land reclassification, so it's essential to check with the specific LGU where the land is located for their requirements and procedures.
Can I buy agricultural land and continue farming on it even after reclassification?
Yes, you can continue farming on reclassified agricultural land if the new classification permits agricultural activities. However, you should be aware that reclassification may bring changes in land use and property values that could affect your farming operations.
What is the role of the Department of Agriculture in the land reclassification process?
The Department of Agriculture plays a role in assessing whether agricultural land is economically feasible for agricultural purposes. Their determination can influence the reclassification process, especially in cases where the land is no longer suitable for farming.
How can I find out if the land I want to buy has any pending reclassification applications or issues?
To determine if the land you're interested in has any pending reclassification applications or issues, you can inquire with the local government unit, specifically the Sanggunian or the city/municipal planning and development office. They should have records of such applications.
Are there any tax implications related to land reclassification in the Philippines?
Yes, there can be tax implications related to land reclassification. When land is reclassified for a different purpose (from agricultural to residential, for example), it may impact property taxes and other tax obligations. It's advisable to consult with a tax expert or the local revenue office to understand these implications.
Can I appeal a reclassification decision if it doesn't align with my plans for the land?
Yes, you can appeal a reclassification decision if it doesn't align with your plans for the land. The appeal process typically involves addressing concerns with the relevant local authorities or pursuing legal action. Consulting with a lawyer is often recommended for this purpose.
Have you experienced processing a reclassification of land before? Remember that the information shared in this article is for general knowledge only. For specific legal advice and consultation, get in touch with your lawyer.
Special thanks to Attorneys Nikki Cortina, Steffi Banaag, Mhealler Ycong, Aila May Alvarez, and Christopher Linag. With reports from Nica Jose.
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