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MANILA, Philippines – Have you ever experienced difficulties in transferring ownership of inherited land?
The process can be confusing, as one netizen pointed out in a complaint submitted to Rappler’s #NotOnMyWatch platform.
The netizen, along with his siblings, inherited property from their parents. They later decided to sell the inherited property to a third party. While trying to transfer the property deed to the buyer, they encountered problems processing their application for extrajudicial settlement of property with the Register of Deeds in Tanauan City. The application was filed almost two years ago. To date, the property deed has not yet been released.
Instructions given were not clear, the informant said. An ordinary citizen will have to scour websites and memorandum circulars to be able to know the correct process. There were some requirements that were not specified early on.
To address the complaint, Rappler tried to reach the Register of Deeds in Tanauan City but the number posted on their website is incorrect.
We called the Bureau of Internal Revenue (BIR) in Lipa City instead and was able to talk to the Officer of the Day who explained the procedure.
Properties of a deceased person cannot be transferred to anyone until it has been legally settled. This process is called extrajudicial settlement of estate.
Under Rule 74, Section 1 of the Rules of Court, a Deed of Extrajudicial Settlement of Estate and Adjudication of Estate should be submitted to the Register of Deeds.
This deed of settlement should indicate the following information:
- That the deceased owner has left no will.
- That the deceased owner has left no debt.
- The name and relationship of the heirs to the deceased. The heirs should be of legal age. Minors should be legally represented.
- A brief description of the properties which will be divided among the parties.
- Posting of a bond fixed by the court if there is personal property included.
The deed should be notarized before a Notary Public after all heirs have signed the document. According to the Rules of Court, the document must be published in a newspaper of a general circulation for 3 consecutive weeks.
Once estate taxes have been paid to the BIR, only then can the notarized deed be registered with the Register of Deeds.
Following the Rules of Court, below is a step by step guide to transferring ownership among heirs. If the heirs have decided to sell the property, the same process also applies.
- Step 1: Fill out BIR Form 1904 (Application for Registration). In filling out the form, note that all parties should have a valid Tax Identification Number (TIN), even the deceased. Some things to note:
- On the space provided for the taxpayer’s name, the name of the deceased should be written.
- The local address of the deceased should be the same as indicated on his or her death certificate.
- If the person died abroad and has no official residence in the Philippines, fill out the foreign address as indicated on the death certificate.
- Attach a photocopy of the Certified True Copy of the death certificate
- Step 2: Prepare mandatory documents to be submitted to the BIR. The BIR should give a checklist of the documentary requirements to the applicant. Among the mandatory requirements are:
- TIN of Estate
- Photocopy of the death certificate, subject to the presentation of the original
- Official Receipt/Deposit Slip and duly validated return as proof of payment
- Any of the following:
- Affidavit of Self Adjudication
- Deed of Extrajudicial Settlement of the Estate (if the estate had been settled extrajudicially)
- Court Order (if settled judicially)
- Sworn declaration of all properties of the estate
- Step 3: Prepare BIR Form 1801 (Estate Tax Return). The Officer of the Day at the BIR should assist in filling out the form as they will be the one computing the taxes based on the documents submitted.
- Step 4: Pay the computed estate tax. According to Revenue Memorandum Order (RMO) No. 15-2003, it can be paid at:
- An authorized agent bank (AAB) by the BIR;
- To the Revenue Collection Officer;
- To a duly authorized Treasurer of the city or municipality in the Revenue District Office where the residence of the deceased at the time of death is located;
- If the person died abroad and cannot be represented in the Philippines, the estate tax can be settled through an AAB under RDO No. 39 South Quezon City
- Step 5: Submit all documentary requirements and proof of payment to the RDO. Once all requirements have been submitted, a claim stub with a reference number will be given. A Certificate Authorizing Registration document will be released once the processing is done.
- Step 6: Release of Certificate of Authorizing Registration (CAR). According to RMO No. 15-2003, CARs should be released for all one-time transactions within 5 days from the date of receipt of tax returns with complete documentary requirements.
Registering the land
Once the CAR is released, it is then possible to transfer the registration of the land title either to the heirs or a third party.
According to the Land Registration Authority’s website, the following documents are required to register the sale of an inherited property:
- Main Document:
- Deed of Extrajudicial Settlement of Estate
- Deed of Sale (if the property has been sold to a third party)
- Supporting Documents:
- 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
When all the necessary documents have been submitted, fees can then be paid.
The Register of Deeds will issue the Transfer Certificate of Title either to the heir or the new owners if the property has been sold to a third party.
According to the LRA’s Citizen’s Charter, the entire process – once all documents have been submitted – should not take more than 10 days unless:
- The titled property is not on the database;
- There are multiple titles in one transaction;
- Multiple transactions;
- There are technical problems in the system;
- Transactions with incomplete documents;
- Other conditions beyond the control of the Registry.
Reporting on #NotOnMyWatch
Do you have any similar experience? Are you confused about how to go through certain transactions with government?
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