Many Filipinos experience problems in transferring a land title in the Philippines from a property that is inherited once the owner is deceased. Most of the scenarios handled by our local government offices start with the deceased not being able to make a last will that will show proof of the inheritance to the rightful heirs of the real property.
When Can Transfer of Land Ownership Happen?
How can I transfer ownership if my parent is still alive? Is it legal? In the Philippines, we are almost always used to the fact that the transfer of ownership is dealt with by hiring the services of a real estate professional (Seller or Broker) to go through the process of application and payment. But in terms of how the process is done, we are lost to the hundreds of process that needs to be done first and in succession, to avoid the complication the problems can give.
When purchasing land from a property developer, the process of transferring ownership to their buyers is the easiest way for us to get the title of the land. Since the process is handled in totality by the professionals in the company, all that you need to do is submit the documents and payments they require. Once everything is done and submitted, what you need to do next is just make sure that the payments will be sent on time and that all documents that needs your signature are signed.
This is a different story for when you are processing the transfer of title on your own and you need to know the process of the transfer, including the fact that you need to go to the local government offices and handle the processing yourself. This is the reason why most of us hire the services of a real estate professional to handle these processes without having to personally go to different locations just to pay a fee.
The process of transferring ownership of inherited land starts with declaring that you are the heir in writing or through an oral will or providing a document called Extrajudicial Settlement that proves that the property of the deceased person is legally settled.
How to Transfer Ownership of Inherited Land in the Philippines?
In the Philippines, when a person dies, their property is typically transferred to their nearest relatives when that person leaves a will. This is what the Philippine inheritance law will say. However, there are some situations where the property owner may have named a different individual in their will to inherit the property.
The Processes Involved in Taking Ownership of the Inherited Land in the Philippines
When you take ownership of inherited land in the Philippines, there are a few different processes that you may need to go through in order to make the transfer official. You may also need to file a deed with the local registry of deeds in order to make the transfer of ownership official.
If you’re not sure what steps you need to take in order to take ownership of inherited land, it’s best to consult with an attorney or real estate professional who can guide you through the process. Taking ownership of inherited land can be a complicated process, but with the help of a professional, it can be done smoothly and efficiently. To help you further in your journey to transfer the ownership of inherited land in the Philippines, here are the steps that we have managed to get so that you can be guided in this long and tedious process.
1. Extrajudicial Settlement of Estate
The real estate property of a relative who have passed on and failed to leave a will cannot be transferred until the property has been legally settled. This means that the person processing the transfer will have to undergo a process of extrajudicial settlement of estate. This document called Deed of Extrajudicial Settlement of Estate and Adjudication of Estate should be submitted to the Registry of Deeds (RD). This deed should indicate that the deceased owner left no will and also has no debt. The heirs should also be indicated in the deed and the relationship of the owner to them. In the case where the heirs are of minor age, a legal representative should be present.
The detailed description of the property should also be included in the deed along with the posting of a bond fixed by the court if there is personal property included. This deed should then be notarized with the signatures of all the heirs stated in the document and should be published in a newspaper of a general circulation for a minimum of three consecutive weeks. Once the estate taxes have been paid, the notarized document can now be sent to the Registry of Deeds for filing and registration.
If you’ve inherited land in the Philippines, here’s what you need to know about how to transfer land title if owner is deceased in the Philippines so you can make sure that issues will be avoided in the future:
A. Obtaining the Will of the Deceased
The first step is to obtain a copy of the death certificate and the will if there is one. Then, you’ll need to go to the local assessor’s office to get a tax declaration for the property.
Once you have these documents, you can then go to the registry of deeds and register the property in your name.
B. What if the Owner of the Land did Not Leave a Last Will and Testament?
There are some scenarios where the deceased may not have left a will or named an heir. In these cases, the property will be distributed among the rightful heirs according to the law as long as they have accomplished the document called Extrajudicial Settlement.
This document must be signed by all heirs before notarizing it and should be published in a newspaper for a minimum time of three consecutive weeks.
If you’re not sure if you’re the rightful heir, you can consult with a lawyer to help determine your rights and ensure that all legal processes are met. Knowledge about your rights and limitations will help you further down the road once the process of transferring ownership of real estate property has started.
C. Settlement of Taxes and Fees
Once you’ve taken care of the legalities, it’s important to keep up with the maintenance of the property. This includes paying any taxes or fees associated with it.
If you neglect to do so, you may eventually lose ownership of the land. The consequences of not paying tax will ultimately lead to losing the property itself and the government auctioning it to the public.
According to the Local Government Code of the Philippines, under section 255, failure to pay the real property tax “shall subject the taxpayer to the payment of interest at the rate of two percent (2%) per month on the unpaid amount or a fraction thereof, until the delinquent tax shall have been fully paid.
Provided, however, that in no case shall the total interest on the unpaid tax or portion thereof exceed thirty-six (36) months.” This real property tax or what is also called the “Amilyar” will be the basis of the government to assess the property if they can take the property away from the registered owner or not. And then, after 36 months has passed and the owner still failed to pay the real property tax, and the maximum interest had accrued on top of it totaling to 72 percent, according to section 258, “real property subject to such tax may be levied upon through the issuance of a warrant on or before, or simultaneously with, the institution of the civil action for the collection of the delinquent tax.” This will in turn give the government the power to auction the property as a whole, or a portion of it, to satisfy the taxes accumulated by the failure to submit the annual real property tax.
2. Application of BIR Form 1904 – Application for Registration
The person filing for transfer should accomplish this form from the Bureau of Internal Revenue (BIR) and should note that all parties should have a valid Tax Identification Number (TIN) as well as the owner. Accomplish all the required fields making sure that the information on the death certificate of the original owner should be the same. You will also have to attach the Certified True Copy of the death certificate of the original owner for this. When filing this document, the BIR will also provide a checklist to the applicant of the required documents and all of them are mandatory.
• TIN of Estate
• Proof of Payment (if applicable)
• Photocopy of the death certificate subject to the submission/presentation of the original
• One of the following documents – Affidavit of Self Adjudication, Deed of Extrajudicial Settlement of Estate (if the estate has been settled extra-judicially), Court Order, Sworn declaration of all properties of the estate.
3. BIR Form 1801 – Estate Tax Return
The authorized personnel from BIR will help the applicant in completing this form as this will be the computation of the taxes based on the requirements submitted by the person applying for transfer. After all the taxes have been computed and accounted for, the BIR will then inform you of the places where the payments can be processed. This can either be at the nearest authorized bank by the office, to the revenue collection officer, to the treasurer of the city or municipality in the revenue district office where the residence of the deceased is located at the time of death.
4. Certificate of Authorizing Registration (CAR)
The certificate of authorizing registration will be released once all documents and payments have been done in the government offices. According to RMO No. 15-2003, this document should be released within 5 days from the date of receipt of tax returns with the complete documentary requirements. According to the Land Registration Authority, the following documents are required to register the sale of an inherited property:
• Deed of Extrajudicial Settlement of Estate
• Deed of Sale (if the property has been sold to a third party)
• BIR CAR/tax clearance certificate
• Owner’s Duplicate Copy of Title
• Realty Tax Clearance
• Tax Declaration (Certified Copy)
• Transfer Tax Receipt/Clearance
• Affidavit of Publication of Settlement
There are a few key things to keep in mind when you’re transferring land through inheritance:
1. Land Registration
First, you’ll need to have the deed to the property in hand. This is the legal document that proves you own the land. Without it, you won’t be able to transfer ownership.
Read Also: How to Ensure That Transfer Certificate of Title Is Clean in the Philippines?
2. Property Survey
You’ll also need to have a current survey of the property. This will help show potential buyers what they’re getting, and will make sure there are no surprises when it comes time to transfer ownership.
3. Zoning Laws
Finally, make sure you understand the local zoning laws and regulations. These can vary depending on where the property is located, so it’s important to be aware of them before you start trying to sell the land.