If you inherited a real estate property in the Philippines, such as a land, and would like to sell it instead of keeping it, there are important things to know to ensure the sale goes smoothly and legally.
First, the inherited property cannot be sold right away without settling the estate of the person (who can be your parents, grandparents or other relative) from whom the property was inherited. In the Philippines, no properties left behind by a deceased person can pass on to his/her heirs unless the deceased’s estate is settled, either judicially or extrajudicially.
Estate is the collective term for all the properties and assets left by a deceased person at the time of death. The estate is usually settled by identifying and gathering all the properties and assets left by the deceased, paying off all debts and liabilities that the deceased may owe, paying the property and estate taxes due, and distributing the remaining properties to the lawful heirs.
Second, after the estate is settled, each heir is only entitled to a portion of the property left by the deceased unless the other heirs waived or sold their shares to one or some of their co-heirs. Thus, an heir can only sell his/her share of the inherited property and such parts as are transferred to him/her, if that is the case.
Normally, however, a buyer would not want to become a co-owner with other people so most likely the buyer will offer to buy the whole property. In this case, all the heirs must agree to sell their respective shares and sign a joint deed of sale.
It is also possible to physically divide the property so that individual titles may issue in the name of each heir, thereby making it easy for each heir to sell his/her share without the buyer becoming a co-owner of the non-selling heirs. This would only be practical if the divided properties would still be left with substantial value and size.
Finally, in addition to the estate tax that must be paid in the settlement of the estate, the selling heir must pay capital gains tax due from the sale of the property.
Most importantly, you must ensure that you will receive the payment through your authorized and trusted representative in the Philippines or the payment will be deposited or wired to your bank account, whether in the Philippines or in your country of residence.
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