Subletting & Leasing for Foreigners in the Philippines

Yes, but with limitations and tax obligations.

✅ Allowed

• Subletting a property you legally rent, with owner’s consent
• Leasing out property owned by a corporation (you’re a shareholder)
• Renting a condo unit or house and subletting to cover costs or profit

❌ Not Allowed / Risky

• Subletting without written consent from the owner/landlord
• Acting as a “silent landlord” for property not in your name without a corporate/legal structure
• Receiving income without declaring it for tax purposes

💰 Income Tax Obligations

Any rental or sublet income earned in the Philippines by a foreigner is subject to Philippine income tax, regardless of visa status.

Tax Types Depending on Residency

1. Non-Resident Alien Not Engaged in Trade or Business (NRANETB)

• Example: tourist visa, no registered business
• Flat tax rate: 25% on gross income
• No deductions allowed
• Must file via BIR Form 1702Q / 1702-RT

2. Resident Alien or Registered Business (with Mayor’s Permit, BIR)

• Example: SRRV, AEP, or through a domestic corporation
• Graduated tax system (20–35%) or optional 8% flat rate on gross
• Can deduct expenses (repairs, utilities) if properly documented
• Must register with BIR and issue official receipts

📑 Legal Requirements to Sublet Properly

• Written Sublease Agreement
• Must state term, rent, and conditions
• Ideally notarized
• Consent from Property Owner
• Required to avoid eviction or disputes
• BIR Registration (if regular activity)
• Register for income tax
• File quarterly & annual returns
• If income exceeds ₱250,000/year → taxes apply
• LGU Clearance (optional)
• If operating on a larger scale (e.g. Airbnb), get barangay & mayor’s permit

📊 Example Calculation (NRANETB Subletter)

• Monthly rental income: ₱25,000
• Annual gross: ₱300,000
• Tax (25%): ₱75,000 (no deductions)
• Net income: ₱225,000

⚠️ Penalties for Non-Declaration

• 20% interest + up to 50% surcharge
• Risk of blacklisting or visa refusal
• Forced closure if done via platforms (Airbnb, Booking) without permits
• 
  

🏁 Conclusion: Yes, You Can — But Declare It Right

Subletting as a foreigner in the Philippines is legal if done transparently.
But the Bureau of Internal Revenue (BIR) expects full compliance, especially as online platforms increasingly report earnings.

✅ To stay secure:

• Get written permissions
• Register income sources
• File taxes properly
• Consider operating through a corporation or resident status for better flexibility