Selling inherited property involves a series of legal and tax requirements to ensure rightful ownership, tax compliance, and avoid future disputes. This guide provides a complete roadmap—from estate settlement to final sale.

1. Settlement of the Estate

To begin selling inherited property, heirs must first settle the estate through:

• Extrajudicial Settlement – Applicable when the decedent had no will, no debts, and all heirs agree. Requires a notarized Deed, publication in a general circulation newspaper for three consecutive weeks, and the posting of a bond in an amount equal to personal property value. :contentReference[oaicite:0]{index=0}
• Judicial Settlement (Probate) – Required if:
  • The decedent left a will
  • There are unresolved debts
  • There is disagreement among heirs or involvement of minors/legally incapacitated persons :contentReference[oaicite:1]{index=1}

Supporting documents include: certified true copy of the death certificate, titles, tax declarations, TINs for decedent and heirs, and the newspaper affidavit of publication.

2. Estate Tax and Amnesty Option

Estate tax is computed at a flat 6% of the net estate value under TRAIN (RA 10963) for decedents from January 1, 2018 :contentReference[oaicite:2]{index=2}. Filing must be within one year of death, or within two years with BIR approval. Penalties include 25% surcharge and up to 20% annual interest on late payments :contentReference[oaicite:3]{index=3}.

An estate tax amnesty (RA 11213, RA 11569, RA 11956) is available until June 14, 2025, allowing heirs to pay tax at 6% without penalties, with installment payments up to two years :contentReference[oaicite:4]{index=4}.

3. Securing the Certificate Authorizing Registration (CAR/eCAR)

After paying estate tax (or securing amnesty), heirs can obtain the CAR/eCAR from the BIR without submitting estate settlement documents first—though proof is required eventually :contentReference[oaicite:5]{index=5}.

4. Transfer of Title to Heirs

Submit the following to the Registry of Deeds (RD):

• Notarized Deed of Extrajudicial Settlement
• CAR/eCAR
• Proof of publication and bond
• Death certificate, title, and tax declaration

The RD will issue a new Transfer Certificate of Title (TCT) or Condominium Certificate of Title (CCT) under the heirs’ names after compliance :contentReference[oaicite:6]{index=6}.

5. Preparing to Sell

Before selling:

• Ensure a clear, updated title free of encumbrances or unpaid taxes
• Secure a Joint Deed of Sale signed by all heirs
• Consider professional assistance from a licensed broker or real estate lawyer

6. Taxes and Fees on Sale

Taxes on sale are computed based on the highest of selling price, zonal value, or fair market value:

• Capital Gains Tax (CGT): 6% of the base
• Documentary Stamp Tax (DST): 1.5%
• Local Transfer Tax: 0.5%–0.75%
• Registry of Deeds Fees, Notary Fees, Tax Clearance

7. Timeline Overview

• Extrajudicial Settlement & Publication: 3–4 weeks
• Estate tax filing and clearance: 2–4 weeks
• CAR/eCAR issuance: 1–2 weeks
• Title transfer and registration: 3–6 weeks

8. Common Pitfalls & Expert Tips

• Failing to publish your Extrajudicial Settlement of Estate (EJS) in a newspaper of general circulation for three consecutive weeks can invalidate the settlement against third parties and delay registration with the Registry of Deeds.

• Missing the one‑year deadline to pay estate tax (from the date of death) triggers compounded penalties—25% annual interest and a 20% surcharge on the amount due.

• Estates qualifying for the Estate Tax Amnesty must apply before June 14, 2025, to benefit from the fixed 6% rate with full waiver of penalties and interest.

• Heirs may combine the EJS with a deed of sale to a third party, facilitating smoother title transfers while optimizing transfer taxes.

• It’s best to consult a licensed broker or estate lawyer early, especially when valuing a property or preparing documentation—this helps avoid missteps, missed requirements, and unnecessary delays.

9. Why This Matters

Proper estate settlement, tax compliance, and title transfer protect heirs from future liability, ensure smooth sales, and preserve the full value of inherited property.

Conclusion

Selling inherited property involves legal, financial, and procedural steps that must be followed meticulously. Completing estate settlement, title transfer, and tax requirements is essential to avoid penalties, disputes, or failed transactions. Seek professional guidance, use available amnesty, and time your sale strategically.

Need help? Connect with licensed experts at BuySellLease.ph.

Related Guides

• Legal Documents Needed to Sell Property in the Philippines
• How to Pay Capital Gains Tax in the Philippines
• Understanding CGT vs. CWT in Real Estate Transactions