Inherited Property Sale Rights: Children vs. Nephew in the Philippines
1. Governing Sources of Law
| Sphere | Main Authorities |
|---|---|
| Substantive succession rules | Civil Code of the Philippines (Book III, Arts. 960-1105) |
| Family relationships & filiation | Family Code, Arts. 173-182, 887-908 |
| Settlement procedure | Rules of Court, Rule 73 – 90 (judicial); Rule 74 (extrajudicial) |
| Property transfer & registration | Property Title Registration Decree (P.D. 1529); Land Registration Act |
| Taxation | NIRC, Title III (“Estate Tax”), Title VI (“DST”); BIR Revenue Regs. |
| Case law (illustrative) | Spouses Abalos v. Heirs of Gomez (G.R. 150955, Sept 3 , 2008); Heirs of Malate v. Gamboa (G.R. 181913, Jan 22 , 2018); Cua Chun v. De la Victoria (G.R. L-14986, Jan 30 , 1961) |
2. Who Qualifies as an Heir?
| Rank in Intestate Succession | Compulsory? | Right of Representation? | Typical Examples |
|---|---|---|---|
| Legitimate children & other descendants (Arts. 979-980) | Yes – enjoy a legitime that cannot be impaired (Arts. 886, 887) | Yes, downward line | Son, daughter, grandchild |
| Legitimate parents & ascendants | Yes, if no descendants | No | Father, grandmother |
| Illegitimate children | Yes (legitime = ½ of a legitimate child, Art. 895) | Yes | Child born out of wedlock |
| Surviving spouse | Yes | N/A | Widow or widower |
| Collaterals up to fifth degree (Arts. 1003-1009) | No (merely voluntary or legal heirs if prior classes absent) | Yes only for nephews/nieces when they step into a pre-deceased parent’s place (Art. 970) | Brother, sister, nephew, niece |
Key take-away: A nephew is never a compulsory heir. He is a collateral relative who inherits only (a) when there are no descendants, ascendants, spouse, or illegitimate children, and (b) by representation if his own parent (the decedent’s sibling) should have inherited but pre-deceased, repudiated, or is disqualified.
3. The Children’s Edge
Legitime is guaranteed. At least ½ of the net estate (after obligations & taxes) is reserved for legitimate children; their shares are equal (Arts. 888, 895).
They exclude collaterals. Existence of a single legitimate child totally bars nephews from intestate succession (Art. 1009).
They can attack dispositions. If testamentary gifts or inter vivos donations impair their legitime, children may bring an action for reduction or collation (Arts. 909-915). A nephew cannot do so because he has no legitime.
4. When a Nephew Does Inherit
| Scenario | Inheritance Basis | Typical Share |
|---|---|---|
| Representation of a pre-deceased child’s line | Art. 970: “right of representation takes place in the direct descending line…” | Nephew’s branch divides the share allotted to his deceased parent |
| No compulsory heirs survive | Art. 1003: Collateral relatives succeed only in default of descendants, ascendants, spouse | Entire estate divided per capita among siblings and their children by degree |
| Instituted in a will | Testator may leave nephew any portion of the free part | Up to full free portion (½ if children exist; entire estate if no compulsory heirs) |
5. Co-Ownership Before Partition
Upon death, the estate becomes a transitory co-ownership among heirs (Art. 493). Until partition:
- Each heir owns an undivided ideal share.
- Acts of administration (paying taxes, preserving property) need a simple majority of shares.
- Acts of strict ownership (sale, mortgage, lease > one year) need unanimous consent.
- Any heir may sell or assign his own undivided share without others’ consent, but the buyer steps into the co-ownership (Art. 493, ¶ 2).
6. Sale Rights Compared
| Item | Legitimate Child (Heir) | Nephew ( ✔ if heir ✖ if not) |
|---|---|---|
| Authority to sell specific parcel pre-partition | Needs consent of all co-owners or judicial approval | Same rule if he is a co-owner; ✖ no right if he is not an heir |
| Authority to sell / assign own ideal share | ✔ Yes; deed must describe it as “x% undivided hereditary share” | ✔ Yes if heir; ✖ none if not heir |
| Power of estate administrator | Court-appointed or extrajudicially appointed admin may sell entire estate with court approval | Same |
| Right to enforce legal redemption (pre-emption) if another heir sells to outsider | ✔ (Arts. 1620-1623) | ✔ if co-owner; ✖ if not heir |
| Right to question sale by executor impairing legitime | ✔ Action to annul or reduce | ✖ no legitime – may only contest if sale violates will or procedural rules |
7. Typical Sale Scenarios
Decedent leaves children + nephew (collateral). Nephew is not an heir. Any sale without children’s consent is void with respect to their legitime. Nephew cannot validly convey anything.
Only siblings & nephew (parent pre-deceased). Estate is co-owned by surviving siblings and the representing nephews. A nephew may sell his undivided share, but other co-owners have 30 days from written notice to redeem (Art. 1623).
Testate succession: Will leaves free portion to nephew. Children retain legitime; nephew’s devise is valid up to the free portion. Sale by nephew of that devise before probate is void; title transfers only after (a) probate, (b) issuance of partition, and (c) registration.
8. Procedural Paths to a Valid Sale
| Step | Extrajudicial (Rule 74) | Judicial (Rules 73-90) |
|---|---|---|
| Conditions | No will, no debts —or debts paid; all heirs are of age & agree | Required if (a) minors, (b) contest, (c) unpayable debts |
| Document | Deed of Extrajudicial Settlement with Sale + SPA if through representative | Court-approved Project of Partition or Order to Sell |
| Taxes & fees | Estate tax within 1 yr of death; CGT/creditable WHT, DST, IT fees; updated Real Property Tax | Same |
| Title transfer | BIR Clearance → Registry of Deeds issues new TCTs | After court order & tax compliance |
Minor or incapacitated heir? Sale of his share needs court approval (Rule 96) and appointment of a guardian ad litem.
9. Tax Snapshot (as of 2025)
| Tax | Basis | Notes |
|---|---|---|
| Estate tax | 6 % of net estate > ₱ 5 million (NIRC §84) | Paid by estate before distribution |
| Capital Gains / Creditable WHT | Sale of land: 6 % of gross price or zonal value | Waived on partition; applies on subsequent sale |
| Documentary Stamp | ₱ 15/₱ 20 per ₱ 1,000 of consideration; exempt on pure partition | |
| Local Transfer / IT Fees | Ord. rates 0.5 %-0.75 % |
10. Frequently Litigated Pitfalls
- Partial-consent deeds – Void pro-ratâ against non-signing heirs (Abalos case).
- Implied Renunciations – A nephew who signs an extrajudicial settlement excluding himself cannot later claim unless vitiated by fraud (Rule 74, §4).
- Hidden heirs – Sale may be annulled within 2 years if an heir was omitted and property remains intact (Rule 74, §4).
- Simulated sales to defeat legitime – Children may sue for collation/reduction (Arts. 1061-1062).
11. Practical Checklist Before Selling
- Confirm heirship. Secure PSA-issued birth/marriage/death certificates; prepare a succession tree.
- Secure tax clearance. File BIR Form 1801 and pay estate tax.
- Settle debts first. Personal and estate obligations have priority over distribution (Art. 1101).
- Choose settlement track. Extrajudicial if unanimous and no minors; else probate or intestate proceeding.
- Draft deed carefully. Describe undivided shares, cite Civil Code Arts. 493 & 1620-1623, attach approved Lot Plan.
- Give written notice to co-owners. Start the 30-day redemption clock (Art. 1623).
- Register promptly. Unregistered deeds bind only the parties; registration protects against subsequent buyers in good faith.
12. Bottom Line
- Children’s status as compulsory heirs is unassailable; nephews participate only in highly specific circumstances.
- Sale of inherited property hinges on (a) valid succession, (b) proper settlement, and (c) consent of all co-owners—or, at minimum, clarity that what is conveyed is an undivided hereditary share.
- Due-diligence documents—from family records down to tax clearances—are as vital as the deed itself.
Understanding these distinctions shields heirs and buyers alike from costly litigation and ensures that the transfer of family property is both legally sound and fiscally efficient.