DAR Involvement After Estate Tax Clearance in the Philippines
(A practitioner‑oriented explainer, current to July 2025. This is general information, not a substitute for legal advice.)
1. Why the Department of Agrarian Reform (DAR) still matters after you pay estate tax
Securing a Certificate Authorizing Registration (CAR) from the Bureau of Internal Revenue (BIR) and paying the estate tax only satisfies tax law requirements. For agricultural land, the government also enforces the agrarian‑reform laws—principally:
| Key statute | Core rule that survives succession |
|---|---|
| Constitution, Art. XIII, §4 | Agricultural land is subject to redistribution to farmers. |
| Comprehensive Agrarian Reform Program (CARP) – R.A. 6657 (1988), as amended by R.A. 9700 (2009) | Transfers of agricultural land must respect the 5‑hectare retention limit and the rights of agrarian‑reform beneficiaries (ARBs). |
| Land Registration Authority (LRA) Circular No. 54‑2014 | The Register of Deeds (ROD) must refuse registration of any deed covering agricultural land unless accompanied by a DAR Agrarian‑Law Implementation (ALI) Clearance or equivalent DAR certification. |
| DAR Administrative Orders (AOs) – e.g., AO 1‑1989 (Retention), AO 1‑2002 & AO 6‑2019 (ALI Clearance), AO 1‑2019 (Land‑use conversion) | Detail when and how DAR issues clearances, exemptions, or conversions. |
Bottom line: After the BIR issues the CAR, DAR must decide whether the land (or portions of it) can lawfully be transferred to the heirs, and under what conditions.
2. Post‑estate‑tax workflow at a glance
graph TD
A[Estate tax return filed] --> B[BIR issues CAR]
B --> C((Agricultural land?))
C -- No --> ROD[Register deed directly]
C -- Yes --> D[DAR application ➔ • ALI Clearance or • Certificate of Exemption/Non‑Coverage (CNC) or • Conversion Clearance]
D --> E[Approval/Denial; conditions imposed]
E --> F[ROD registers deed(s) per DAR clearance]3. The three DAR “gatekeeping” documents
| DAR document | When used | Practical effect |
|---|---|---|
| ALI Clearance (sometimes called “DAR Clearance”) | For ordinary agricultural land that is covered or coverable under CARP | Confirms: (1) each heir’s share ≤ 5 ha; (2) tenancy/leasehold rights are protected; (3) no pending acquisition proceedings; (4) heirs agree to continue agricultural use unless DAR authorizes conversion. |
| Certificate of Non‑Coverage (CNC) | Land clearly never coverable (e.g., fishponds, livestock‑ and poultry‑raising areas, government forest land, or land already reclassified to residential/commercial before June 15 1988) | Exempts the parcel from further DAR control; the ROD may register directly once the CNC is annotated. |
| Conversion Clearance | Heirs intend to change land use (e.g., residential subdivision, industrial estate) | DAR evaluates agro‑economic impact, local land‑use plan, and imposes conversion fees and production‑loss recovery payments before title transfer. |
Note: For land already distributed under CARP with a Certificate of Land Ownership Award (CLOA), only hereditary succession is allowed within 10 years of award; heirs must also be qualified ARBs and must register the transfer with the DAR regional office.
4. Common scenarios and DAR treatment
| Scenario | DAR stance | Heirs’ compliance tips |
|---|---|---|
| Parent dies owning 12 ha of riceland, 3 heirs | Each heir may receive ≤ 5 ha; surplus must be offered to ARBs or the government. DAR will require a subdivision survey reflecting allowable shares before issuing ALI Clearance. | Present proof of actual cultivation by heirs (or intent to lease to tillers), and a sworn Heirs’ Affidavit of Aggregate Landholdings. |
| Estate comprises 2 ha of coconut land inside a city’s reclassified residential zone (reclassified 1990) | Land already reclassified post‑CARP; ALI Clearance still required because reclassification occurred after June 15 1988. DAR will likely approve a Conversion Clearance. | Secure city zoning certification; pay conversion fees (currently 2‑6 % of zonal value). |
| CLOA property (awarded 2015) passes to children in 2024 | Transfer allowed by succession, but DAR validates heirs’ farmer qualification and prohibits mortgage/sale for remaining retention period. | Lodge a Petition for Annotation of Heirship with DAR; continue to cultivate or face cancellation. |
5. Step‑by‑step: Obtaining an ALI Clearance
File application at the DAR Provincial Office (DARPO) covering the land.
- Forms: DAR Form ALI–01, Sworn Affidavit of Heirs, Lot Plan and Technical Description, BIR CAR.
Submit supporting proof:
- Death certificate, extrajudicial settlement or court‑approved partition, tax declarations, zoning certificate, barangay certification on actual tillage, list of tenants.
DAR Field Validation (site inspection & farmer interviews).
Report & recommendation by DAR Municipal Agrarian Reform Officer (MARO), then review by Provincial Agrarian Reform Officer (PARO).
Provincial DAR Adjudication Board or Regional Director issues Clearance (or denial with grounds) within 60–90 days.
Pay clearance fee (₱2,000 + ₁/₁₀ of 1 % of assessed value, per AO 6‑2019).
Annotate Clearance & CAR on the original title at the ROD; secure new Transfer Certificate/s of Title (TCT) in heirs’ names.
A denied application may be appealed to the DAR Secretary within 15 days; further judicial review lies with the Court of Appeals via Rule 43.
6. Interaction with the Estate Tax Amnesty laws
- R.A. 11213 (2019) created a tax amnesty window (Feb 14 2019 – June 14 2023) for estates of decedents who died on or before Dec 31 2017.
- R.A. 11956 (2023) extended the deadline to June 14 2025 and simplified filing.
- Availing of the amnesty still produces a CAR, but it does not waive DAR clearance requirements.
- Many heirs discover DAR issues after paying the amnesty tax; budget time (often 3–6 months) and funds for DAR processing before the ROD can issue new titles.
7. Penalties and pitfalls
| Misstep | Legal consequence |
|---|---|
| Registering a deed for agricultural land without DAR clearance | ROD must refuse; if mistakenly registered, title is voidable and DAR may initiate cancellation. |
| Over‑retention (an heir ends up with > 5 ha of agricultural land nationwide) | DAR may order reconveyance/expropriation of excess and impose administrative fines (₱1,000 – ₱15,000 per hectare). |
| Unauthorized conversion (cultivated rice land turned into a resort without DAR approval) | Reversion of land to agricultural use, forfeiture of improvements, criminal liability under §73 (b) of R.A. 6657 (penalty: up to 6 years’ imprisonment). |
| Premature sale of CLOA land within the 10‑year prohibitory period | DAR cancellation of CLOA, forfeiture in favor of the government. |
8. Practical checklist for executors & heirs
Map the estate—identify which parcels are agricultural, residential, industrial, or mixed‑use.
Compile land‑use history—find zoning ordinances or zoning certificates to see if land was reclassified before June 15 1988 (CNC) or after (Conversion Clearance).
Compute aggregate landholdings of each heir nationwide; plan subdivisions to observe the 5‑ha cap.
Engage a licensed geodetic engineer early for subdivision surveys; DAR will not act on paper subdivision alone.
Preserve tenancy relationships—obtain tenants’ conformity or compensate them per §36 of R.A. 3844.
Track timelines—BIR CAR validity (usually 1 year), DAR clearance processing (2–4 months typical, longer if conversion).
Budget for fees:
- BIR estate tax (or amnesty rate of 6 % of net estate)
- Documentary stamp tax (DST) on transfer
- DAR clearance fee and, if applicable, conversion fees (2 – 6 % of zonal value)
- ROD registration fee and transfer tax (0.5 – 0.75 % of zonal value depending on LGU).
9. Frequently asked questions
| Question | Short answer |
|---|---|
| Q: Is DAR clearance needed if the land is already “inside town proper”? | Yes, if the title is still classified as agricultural and the reclassification ordinance took effect after June 15 1988. |
| Q: We will not farm the land; can we lease it to a third party? | Yes, but lease must honor existing tenants’ rights and the 5‑ha retention rule; long‑term leases (over 10 years) of CLOA land need DAR approval. |
| Q: Does DAR clearance expire? | Generally no, but if the facts change (e.g., new acquisition proceedings), DAR may recall the clearance. |
| Q: What if heirs disagree on subdivision? | DAR clearance can proceed on the basis of undivided shares; partition disputes must be settled in court, not in DAR. |
| Q: Are non‑Filipino heirs allowed to inherit agricultural land? | Only if they were Filipino citizens at the time of the decedent’s death; otherwise the share passes to qualified Filipino heirs under the Constitution’s nationality restriction on land ownership. |
10. Take‑aways
- The BIR’s CAR ends your tax obligations; the DAR clearance ensures you meet agrarian‑reform rules.
- Always treat DAR processing as integral to estate settlement when any parcel is—or might still be—classified as agricultural.
- Early due‑diligence on land classification, retention limits, and tenancy saves months of delay and avoids void transfers.
Need professional help?
Consult a Philippine lawyer specializing in agrarian‑reform and land registration for tailored advice and representation before DAR, especially when landholdings exceed 5 hectares, involve tenants, or require land‑use conversion.