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  • From Forebears to Heirs: Bequeathing Property in the Philippines

    “…but in this world, nothing can be said to be certain, except death and taxes.”

    – Benjamin Franklin, in a letter to Jean-Baptiste Leroy, 1789

    By Realttorney®

    This article was written for Filipino-Americans and other Filipinos who are dual citizens and have inheritance in the Philippines from deceased relatives. It is also for Filipino-Americans or non-resident Filipinos who own real estate in the Philippines. This is your guide to heirs, wills or no wills, and estate taxes in the Philippines.

    So, let us begin.

    Whether you own one or several real estates, or have an inheritance here in the Philippines, you’ve probably thought about what will happen to the parcel of land, house, or condominium unit when you or your close relative passes away. How can you secure your rights to the inheritance? How can you make sure that your properties in the Philippines end up in the right hands, without creating family conflict and needless litigation?

    In all parts of the world, transferring real estate to the heirs of property owners is not as simple as writing their names on a piece of paper. There’s a legal process, documentary requirements need to be prepared, and yes, estate taxes must be paid before you or your loved ones can truly claim ownership.

    Now let us start to detail everything you need to know about how to pass on property in the Philippines from the registered owner, especially if you’re living abroad. Whether you’re an heir who is a co-owner of properties in the motherland or a property owner planning for the inevitable, this guide will walk you through the process, clearly and confidently.

    🧬 Who Can Inherit Property in the Philippines?

    Let’s learn the basics first: Under Philippine law, real estate can pass to a select few, if the decedent passed away with or without a will.

    ✅ Compulsory Heirs Include: (1) Your legitimate children or descendants; (2) Your parents or ascendants, if you have no children; (3) In some cases, illegitimate children are also entitled; and (4) Your spouse.

    ✳️ These heirs are entitled to a “legitime”, a portion of your estate that the law reserves for them. You cannot freely dispose of this portion if a will has been executed by the testator. However, if you die without a will, your estate will be distributed based on intestate succession rules under the Civil Code. It is up to the property owner to make a last will and testament. But seek competent legal advice for this. And, if you get word that you have an inheritance from a relative in the Philippines, then you have to determine whether your relative passed with or without a will.

    🪪 Step-by-Step: Legal Process for Transferring Property to Heirs

    When a person passes away, the property does not automatically pass to the heirs. Here’s the process that must be followed:

    Step 1: Determine If There’s a Will.

    With a will (testate succession): The will must be probated in court. You need to contact the Executor of the will to determine what is to be bequeathed to you.

    Without a will (intestate succession): The estate will be divided among the legal heirs as per the provisions of the law on intestate succession – the default estate plan of the State in the Philippines.

    📌Note: Even if the will was executed abroad (e.g., in the U.S.), it must still be “probated” in a Philippine court if it involves property in the Philippines. The process involves the filing of a Petition for Recognition of Foreign Judgment in the trial court where the property is situated. The foreign judgment here is the Order of the Probate Court in the United States.

    Step 2: Prepare and Settle the Estate.

    What needs to be prepared? Before collating all the required documents for the processing of the settlement of the estate, whether via will or not, one must first identify all properties, both personal and/or real. Next is to determine the value of each property in the name of the registered owner.

    After this, if the estate is liquid, then paying the debts and liabilities of the deceased person is in order. However, if the estate is illiquid, then the heirs should agree to sell the property to pay for all the debts and liabilities that are outstanding.

    These steps will be hassle-free if all the heirs agree to be civil and amicably discuss anything and everything about settling the estate. However, disputes among the heirs are not uncommon, especially when the value of the estate is enormous, or there is an unresolved family issue from the past.

    When all heirs are in unison, they can execute an Extrajudicial Settlement of Estate to be used as the transferring document at the settlement of the estate before various government agencies in the Philippines. Collate the documents that are needed for submission to the Bureau of Internal Revenue, the Local Government Unit, and the Registry of Deeds.

    💡Tip: Engage an experienced estate attorney in the Philippines to guide you and avoid costly errors or delays.

    Step 3: Pay the Estate Tax.

    📉 In May 2025, I lectured on the settlement of estates (entitled “From Forebears to Heirs”), including the estate tax amnesty that was then still available. That amnesty expired on June 14, 2025. For estates settled now, the following points apply.

    1. The estate tax rate is 6% based on the value of the net estate.
    2. The standard deduction is PhP 5 million for citizens in the Philippines.
    3. The standard deduction for a non-resident not a citizen of the Philippines is PhP 500,000.00.
    4. The deduction on the market value of the decedent’s family home is now PhP 10 million.
    5. The Estate Tax Return (BIR Form 1801) should be filed within 1 year from the date of death. Any filing passed this period will merit penalties, surcharges, and interest on the estate tax due.
    6. The estate tax return showing a gross value exceeding PhP 5 million shall be supported with a statement duly certified by a CPA.
    7. Payment by installment shall be allowed within 2 years from the statutory date of its payment without civil penalty and interest.

    ✅ Kindly note that the share of the decedent in the Family Home is only half of the total allowable amount since he or she is merely a co-owner of the house and lot that is identified as a conjugal or community property. And, finally, if the net value of the estate is under PhP 5 million and you claim the full standard deduction, you may not owe any estate tax.

    Once the net estate has been determined based on the documentary requirements submitted to BIR, the payment of the estate tax is now in order at the Authorized Agent Banks (AABs) or the Revenue Collection Officer at the Revenue District Office (RDO).

    Step 4: Transfer Title to Heirs. Once the estate tax is paid and the documents submitted at the BIR, the Certificate Authorizing Registration (CAR) shall be forthwith issued. Along with the (1) CAR, you need to prepare these documents: (2) the original copy of the transferring document – will or EJS – that was processed by the BIR; (3) original owner’s duplicate copy of the Torrens title; (4) certified electronic copy of the existing land title; (5) certified true copy of the tax declarations; (6) tax clearance; (7) Heir’s Bond and (8) the valid IDs of all the heirs, among others.

    📌 These documents will be submitted to the Registry of Deeds in order to cancel the old land title and eventually issue a new Transfer of Certificate of Title. The registration fee for the transfer of the land title in the name of the new owner is the final expense that will be paid by the heirs.

    ⚠️ Only after this step can the property be legally owned by the heirs in the eyes of the Philippine government. Heirs cannot transfer, sell, or mortgage the property until the estate tax is paid.

    🔑 Options for the Settlement of Estate. There are two primary ways to settle an estate in the Philippines:

    1. Judicial Settlement. This is the option when there is a Last Will and Testament that was executed by the testator before his or her death. But, if there is no will and the Heirs are in conflict with each other, then there is no other option but to go to court to settle the dispute between the heirs.

    Finally, if one or more heirs is a minor and the property belonging to the estate will be sold to a prospective buyer, then the portion of the minor to be sold should be confirmed by the Family Court to make it legal and valid.

    The Court proceeds with the probate and oversees the distribution of the properties owned by the testator and the payment of all outstanding debts and liabilities to the creditors of the testator.

    2. Extrajudicial Settlement (EJS) of Estate. This option is often used when the deceased left no will. It should be noted that the execution of the EJS is not under any provision of the law on succession. It is based on the Law on Contracts.

    The EJS is a document where all the heirs of the deceased agree to adjudicate and partition among themselves the entire estate of the deceased relative. The heirs should be of legal age. But, if some are not of legal age or an incapacitated to sign a contract, then they should be adequately represented by an Attorney-in-Fact or a duly appointed Legal Guardian by a Family Court.

    This document should be notarized and must be published in a newspaper of general circulation once a week for 3 consecutive weeks. An Affidavit of Publication will be given at the end of 3 weeks of publication. Then this Affidavit should be submitted to the Registry of Deeds, as part of the documentary requirement for the transfer of the Torrens title to the names of the Heirs.

    💡 You can also opt to partition the estate via waiver of rights, donation, or sale among heirs simultaneously with the settlement of the estate of the deceased relative.

    📄 Important Documents You Need to Prepare

    Whether you’re in the U.S. or any country in the world, make sure to prepare the following for submission to the BIR:

    1. Death certificate (issued by PSA or foreign equivalent).
    2. Birth certificate (issued by PSA or foreign equivalent).
    3. Marriage certificate (issued by PSA or foreign equivalent).
    4. Deed of Extrajudicial Settlement or probate documents.
    5. Original owner’s duplicate copy of the land title (OCT/TCT/CCT).
    6. Tax Declaration from the local assessor’s office.
    7. Tax Clearance for the current year.
    8. Valid IDs of all heirs.

    The BIR Certificate Authorizing Registration (CAR) is the proof of estate tax payment and any other taxes paid as a result of the settlement of the estate of the deceased.

    🗺 What If the Heirs Are Overseas?

    If heirs are in the U.S. or any other country in the world, here are some tips:

    Sign SPAs abroad and have them authenticated by the Philippine Consulate, or an Apostille Certification has been issued by the foreign ministry of the host country, whichever is applicable.

    Coordinate with an experienced estate lawyer in the Philippines to process probate, tax filing, and title transfer.

    Ensure you have TINs (Tax Identification Numbers) issued by the BIR—required for all heirs, even if abroad.

    Consider setting up a family corporation or trust to manage the property, especially for large estates or multiple heirs. For complex estate planning issues, it is best to consult an estate planning professional in the Philippines. Apart from setting up a family corporation or trust, consider other Estate Planning Tools like life insurance that can help preserve wealth and reduce tax exposure.

    📣 Final Thoughts

    Transferring property to your heirs in the Philippines can be smooth and rewarding, but only if you plan ahead. As a Filipino-American or overseas Filipino, you’re already navigating two legal systems—so don’t leave it to chance.

    Get the documents ready, talk to a licensed estate lawyer, pay the necessary taxes, and, most importantly, make sure your wishes are clear and legally valid.

    That way, when the time comes, your loved ones can focus on remembering you, not struggling through bureaucracy.

    ——-

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.

  • Buying Real Estate in the Philippines While Living Abroad: A Filipino-American’s Step-by-Step Guide

    “Buying real estate today is a complex process, and that is why buyers are obliged to conduct legal due diligence as a first step.”

    – Ernesto C. Perez II, CTEP, REB, Attorney, and PRC-Accredited Speaker

    By Realttorney®

    If you’re a Filipino-American or someone living in the U.S. with roots in the Philippines, chances are you’ve dreamed about owning a piece of land or real estate in your home country. Maybe it’s a future retirement home in the Metro Tagaytay area. Maybe you want to invest in a condo in Bonifacio Global City. Or perhaps, it’s simply about staying connected to your roots by owning something tangible in the place where your story began.

    Whatever your motivation, buying real estate in the Philippines while abroad is very doable – but it does come with some unique challenges. This guide will walk you through everything you need to know: your rights as a Filipino-American buyer, the legalities, the practical steps, and the common pitfalls to avoid.

    This article was inspired by the story of RM, who is Mexican-American and married to a Filipina-American. RM reached out to me to inquire about estate planning. But his story is quite inspiring. He and his wife liquidated most of their assets in California and purchased real estate in San Pedro, Laguna while still in the United States. They manage to build a multi-door apartment structure that they plan to rent out. Of course, this was all done with the able assistance of a trusted individual residing near their property.

    So, you know that RM’s wife bought real estate in the Philippines while in the United States. But make no mistake, it is a complex process that needs your utmost attention and focus. Hence, let’s start with the basics.

    As a Filipino-American, how much you can buy and what type of real estate depends on your citizenship status.

    If you are a dual citizen, you are in the best position to buy. Thanks to Republic Act No. 9225, also known as the Citizenship Retention and Re-acquisition Act of 2003, you can re-acquire your Philippine citizenship while retaining your U.S. citizenship.

    As a dual citizen, you regain the full rights of a Filipino citizen, which means:

    • ✅ You can own land, condos, and build homes without restrictions, except when buying into a gated community.
    • ✅ You can buy and sell property just like any other Filipino.

    To re-acquire citizenship, you must apply through the Philippine Embassy or Consulate in your area. The process typically involves submitting documents like your birth certificate, U.S. passport, and proof of former natural-born citizenship, i.e., your expired Philippine passport.

    👉 Pro Tip: Apply for dual citizenship before buying property. It makes the legal process of purchasing real estate much smoother.

    If You’re a U.S. Citizen with No Dual Citizenship then your options are more limited, but you’re not shut out.

    You can:

    • ✅ Buy a condominium unit, but only in buildings where foreign ownership doesn’t exceed 40%.
    • ❌ You cannot own land, house-and-lot units, or agricultural property.

    You can, however, lease land for up to 50 years (renewable for another 25 years) under certain conditions, especially if the lease is tied to business use. If you want to read about the proposed amendments to the law allowing a lease period from 50 years to 99 years, click here.

    📝 Step-by-Step: How to Buy Property in the Philippines While Abroad

    Now that we’ve cleared up who can buy what, let’s break down the process into 7 simple steps:

    Step 1: Know What You’re Buying

    Are you looking at:

    • A condo in the National Capital Region (composed of 16 cities and 1 municipality) or in other major urban centers in different provinces in the Philippines)?
    • A house and lot in the province?
    • Agricultural land to build a farm or resort?

    Your type of property will determine your ownership options and the paperwork needed. Do a bit of homework first on what aligns with your long-term goals – retirement, income generation, or family legacy.

    Step 2: Do Your Legal Due Diligence

    This is where many overseas buyers run into problems. Before you send money or sign anything, it is required to do the following:

    🔍 Verify the land title if there is one, or the condominium certificate of title (CCT).

    • Ask for a Certified Electronic Copy of the land title or CCT from the Registry of Deeds having jurisdiction over the location of the real estate.
    • Check for encumbrances (loans, liens, or pending disputes).
    • Match the name on the land title with the government-issued ID of the seller.

    🛑 Red flags to watch out for:

    • “Tax Declaration” only [A tax declaration of real estate does not prove ownership, but merely serves as an indicium of possession in the concept of ownership.]
    • Promises of “soon-to-be-titled land” or a “portion of the titled land”.
    • Sellers who ask for earnest money payment with photocopies of ownership documents.

    Step 3: Hire a PRC-Licensed Real Estate Broker and a Real Estate Attorney

    This cannot be stressed enough.

    • A real estate broker (licensed by the Professional Regulation Commission in accordance with Rep. Act No. 9646) will help find properties, negotiate prices, and guide the sales process.
    • A real estate attorney ensures all documents are legal and properly notarized, and helps you navigate special requirements like taxes, estate issues, or buyer representation.

    Never rely solely on relatives or unlicensed agents – even if they mean well. Protect yourself with professionals who are legally accountable.

    Step 4: Prepare Your Documents

    Here’s a checklist of what you’ll need:

    For the Buyer:

    • A photocopy of a Valid ID or passport, with 3 signatures of the buyer.
    • If dual citizen: Dual Citizenship Certificate or Identification Certificate from the Bureau of Immigration.
    • A notarized Special Power of Attorney (SPA) in favor of an attorney-in-fact residing in the Philippines. This SPA should be accompanied by an Apostille Certificate issued by the Secretary of State where the buyer in the United States resides.
    • Set up an bank account where you will remit the funds to purchase the real estate and pay internal revenue taxes, etc.

    For the Property:

    • Certified Electronic Copy of the Land Title or the Condominium Certificate of Title;
    • Certified True Copy of the latest tax declaration and the real property tax receipt of the current year;
    • Certificate of No Improvement, if a vacant lot is being purchased;
    • Updated payment of Homeowners’ Association dues (if purchasing a house and lot in a gated community) or condominium dues (if purchasing a condominium unit);

    If you’re buying remotely and not physically in the Philippines, you’ll need an SPA. This authorizes a trusted person (usually a family member or your licensed REB) to sign documents and act on your behalf.

    📝 The SPA must be:

    • Notarized by a Philippine Consulate (if the Filipino-American is currently residing in a country that has not acceded to the Apostille Convention);
    • Specific in what powers are granted;
    • Accompanied by your valid ID;

    Step 5: Sign the Deed of Absolute Sale

    Once everything checks out, the seller and buyer will execute a Deed of Absolute Sale (DOAS). This document finalizes the transfer of ownership.

    The DOAS must be:

    • Signed by both parties;
    • Notarized by a notary public in the Philippine [Personal appearance of the seller before the notary public is required by the Notarial Act of 2004]; and
    • Registered with the Registry of Deeds, after the payment of the internal revenue taxes with the BIR and transfer tax with the Local Government Unit where the real estate is located.

    Step 6: Pay the Required Taxes and Fees

    The buyer typically shoulders the Documentary Stamp Tax and Transfer Tax, while the seller pays the Capital Gains Tax. However, the payment of these taxes depends on the mutual agreement between seller and buyer. Why? Because some sellers want all taxes to be paid by the buyer. Legally, payment of capital gains tax is the seller’s obligation. Therefore, clarify the payment of taxes and expenses in the contract.

    Here’s a quick breakdown:

    TaxesRateWho Normally Pays
    Capital Gains Tax (for capital assets)6% of selling price or SMVSeller
    Creditable Withholding Tax (for ordinary asset)1.5% to 6% depending on the status of the sellerSeller
    Value Added Tax (for ordinary asset)12% of selling price or Schedule of Market ValueSeller
    Documentary Stamp Tax (for any asset)1.5% of selling price or Schedule of Market ValueBuyer
    Transfer Tax0.5% – 0.75% depending on the class of the LGUBuyer
    Registration Fee to the Registry of Deeds~0.25% of selling priceBuyer

    Step 7: Register the Property Under Your Name – Both Title and Tax Declaration

    Submit the notarized DOAS, certificate authorizing registration (CAR), transfer tax receipt, and required documents to the Registry of Deeds to get the land title or CCT transferred.

    After that, see to it that the tax declaration must also be transferred in the name of the buyer as well. Oftentimes, this last step is forgotten as everything is focused on the transfer of the title and the CCT. A tax declaration is an equally important ownership document. Hence, its transfer to the new owner is also crucial to end the process.

    At the end of the buying process, you should receive the following:

    • A new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) registered in your name at the Registry of Deeds; and
    • A new Tax Declaration from the local assessor’s office, registered in your name as well.

    🏦 How to Send Money from the U.S. Safely

    Here are some trusted ways Filipino-Americans send money for property purchases:

    • Bank-to-bank remittance (BDO, BPI, Metrobank, RCBC, Security Bank, etc.)
    • Money transfer operators (Remitly, Wise, Xoom)
    • Direct remittance to seller’s bank (ensure due diligence first)

    💡 Always keep official receipts and bank records of all transfers. Avoid sending large amounts in cash or through informal channels.

    ⚠️ Common Mistakes to Avoid

    1. Skipping dual citizenship and rushing into a land purchase.
    • Relying solely on a family member to handle everything without legal oversight.
    • Not checking the TCT or CCT and the seller’s legitimacy.
    • Buying properties without on-ground inspection or proper documentation.
    • Under declaring the selling price to save on taxes (this is illegal and risky).

    💬 Real Talk: Is Buying Property in the Philippines Worth It?

    Of course, Yes – but only if it aligns with your long-term goals. Don’t buy for reason of speculating on the perceived rising prices of real estate in the next few years. Owning real estate in the Philippines gives you:

    • A future home base;
    • Rental income opportunities;
    • Security for aging parents or returning home; and
    • A legacy for your children.

    However, purchasing real estate in the Philippines while in the United States requires careful preparation and planning, conduct of property legal due diligence, and the right legal safeguards. You should conduct your own research in each and every step of the process.

    🧾 Checklist: What You Should Have Before You Buy

    ✅ Dual Citizenship papers (if applicable)

    ✅ PRC-licensed real estate broker and attorney

    ✅ TIN in the Philippines

    ✅ SPA if buying remotely

    ✅ Proof of funds or remittance record

    ✅ Clean title and updated taxes

    ✅ Signed and notarized DOAS

    ✅ Official receipts of all payments

    ✅ Registered title and tax declarations in your name

    🛠 Ready to Start?

    If you’re thinking about buying property in the Philippines from the U.S., don’t rush. Start with research, talk to professionals, and make sure the property matches your purpose—whether it’s for retirement, investment, or simply staying connected to your roots.

    Need help figuring out your next step? You can:

    📩 Contact a licensed Philippine attorney or real estate broker.

    📑 Download our FREE documentary checklist for buying property while abroad.

    📺 Watch our upcoming YouTube episode on this very topic!

    —–

    Atty. Jojo is a real estate attorney, an estate planning attorney, a licensed real estate broker, and a PRC-accredited Lecturer/ Speaker for Training Programs in Real Estate. He is committed to helping new and veteran real estate service practitioners be well-informed of the latest laws, rules, regulations, and information relevant to the real estate service sector.