Selling Inherited Real Property Still Titled in the Deceased Owner’s Name
Procedural Requirements for Heirs in the Philippines
(Everything you need to know—law, taxes, documents, risks, and best-practice workflow, current as of 18 June 2025)
1. Why the Title Is “Stuck” in the Decedent’s Name
A Torrens title does not pass by itself when the owner dies. Under Article 777 of the Civil Code, ownership is transmitted “the moment of death” but only in a purely civil sense. To make that transmission opposable to third persons you must:
- Settle the estate (judicially or extrajudicially); and
- Register the settlement and the eventual conveyance with the Registry of Deeds (RD).
Until both happen, the title on file at the RD—and in the electronic database (LRA e-Torrens)—remains in the deceased owner’s name.
2. Overview of Permissible Work-Flows for Selling Without a Prior Title Transfer
| Workflow | When used | Key Instruments | Resulting Chain of Title |
|---|---|---|---|
| A. “Double-deed” (Extrajudicial Settlement with Absolute Sale, or EJS-AS) | Decedent left no will, no outstanding debts, and all heirs are of age (or duly represented). | • Deed of Extrajudicial Settlement and Absolute Sale (single notarised deed) • Publication for 3 weeks • Estate Tax Return & eCAR |
Title leaps directly from the decedent to the buyer in one registration track. |
| B. Sequential – EJS then Deed of Sale | Heirs intend to sell but prefer two separate instruments (useful if sale occurs later). | • Deed of Extrajudicial Settlement (EJS) • After buyer is found: Deed of Absolute Sale (DAS) |
Title is first transferred to the heirs, then to the buyer. |
| C. Judicial Settlement with Court-approved Sale | There is a will, a minor heir, a dispute, unpaid debts, or any heir refuses to sign. | • Petition for Probate/Letters of Administration • Motion to Sell Estate Asset (Rule 89, Rules of Court) |
Title passes pursuant to court order; sale proceeds go to the estate. |
| D. Sale by an Administrator or Executor | Estate is under court-supervised administration and the buyer is ready before partition. | • Petition and Court Order authorising sale • Deed of Absolute Sale executed by the administrator/executor |
Title transfers from the decedent to the buyer based on the court order and DAS. |
In every scenario the tax and registration steps below are non-negotiable.
3. Step-by-Step Requirements (Extrajudicial Route A or B)
| Stage | Documents | Agencies / Fees |
|---|---|---|
| I. Estate Settlement | 1. PSA-issued Death Certificate 2. TCT/OCT & latest Tax Declaration 3. Certified list of heirs with their government IDs 4. EJS (or EJS-AS) notarised |
• Notary: ₱ 1,500 – 5,000 • Publication: 3 consecutive weeks in a newspaper of general circulation (Rule 74 §1) |
| II. Estate Tax Compliance | 1. BIR Form 1801 (Estate Tax Return) 2. Sworn Declaration of all properties & liabilities 3. Proof of valuation (zonal or FMV) 4. TIN of the Estate (BIR Form 1904) |
• Estate Tax: flat 6 % of net estate (TRAIN Law) • Estate Tax Amnesty: RA 11213 as extended by RA 11956 until 14 June 2025 (rates vary, no penalties/surcharges) |
| III. Obtain BIR eCAR | 1. Receipt of estate-tax payment or amnesty compliance 2. Affidavit of publication 3. EJS (or EJS-AS) |
• BIR issues electronic Certificate Authorizing Registration (eCAR) – prerequisite for RD |
| IV. Sale-Specific Taxes | On or before 30 days from notarisation of the DAS / EJS-AS: • Capital Gains Tax (CGT) – 6 % of higher of zonal/FMV/selling price (unless the estate is an ordinary business, in which case it’s Creditable Withholding Tax) • Documentary Stamp Tax (DST) – 1.5 % of same tax base |
BIR – pay via AAB or eFPS |
| V. Local Transfer Tax | • City/municipality treasurer: 0.5 % (cities) or 0.75 % (municipalities) of total consideration | LGU realty transfer tax |
| VI. Registration with RD | 1. eCAR(s) 2. Original TCT/OCT & Tax Declaration 3. Notarised deeds 4. RPT clearance & tax receipts 5. Transfer-tax receipt 6. DAR clearance (CARP) if agricultural land >5 ha |
RD fees: registration + entry + issuance of new owner’s duplicate title |
Result: Buyer receives a new TCT in his/her name; the heirs never get a title, but the transaction is perfectly valid and marketable.
4. Key Legal Doctrines & Statutes
Civil Code
- Art. 774-783: Succession in general
- Art. 776-777: Transmission of ownership at death
- Art. 1311/1390/1397: Voidable contracts if some heirs absent
- Art. 1620-1623: Right of redemption among co-heirs
Rules of Court
- Rule 74: Extrajudicial Settlement of Estate
- Rule 86-89: Claims and Sales in Judicial Administration
Property Registration Decree (PD 1529) – registration of instruments affecting registered land.
NIRC of 1997 (as amended by RA 10963 – TRAIN) – Estate Tax (Title III, Chap. I) & CGT/DST (Title VI).
RA 11213, RA 11569, RA 11956 – Estate Tax Amnesty, last extension to 14 June 2025.
Relevant Supreme Court rulings
- Heirs of Malate v. Gamboa, G.R. 125613 (2003) – sale by some co-heirs valid only as to their shares.
- Spouses Abellera v. National Housing Authority, G.R. 174093 (2012) – publication mandatory for EJS.
- Sanchez v. Court of Appeals, G.R. 165856 (2010) – title can pass directly from estate to buyer via EJS-AS.
5. Special Situations & Practical Tips
- Minor or incapacitated heir – Need judicial settlement or a guardian ad litem; court must approve the sale.
- Unknown or absentee heir – Publish notice and consider consigning their share; safest to go judicial.
- Outstanding debts – Extrajudicial settlement barred unless all debts are paid (Rule 74 §1); otherwise creditors may sue to annul sale within 2 years.
- Agricultural land > 5 ha – Secure DAR Form CARP-CNO.
- Condominium unit – Coordinate with the condominium corporation for clearance on unpaid dues; submit Master Deed/TCT-CT.
- Estate tax already prescribed but unpaid – Liability remains; cannot register sale until settled or amnesty availed.
- Foreign buyer – Not allowed to own land; can buy condominium (max 40 % of project).
- Estate under tax amnesty (until 14 Jun 2025) – File BIR Form 2118-E; pay 6 % of net taxable estate or appraised value, whichever is higher, in lieu of penalties.
- Lost owner’s duplicate title – File a petition for issuance of new owner’s copy under Sec. 109 of PD 1529 prior to registration of deeds.
6. Typical Timeline (Extrajudicial + Immediate Sale)
| Week | Milestone |
|---|---|
| 1-2 | Gather documents; draft and notarise EJS-AS |
| 2-5 | Publish Rule 74 notice (3 consecutive weeks) |
| 3-6 | File Estate Tax Return & pay; obtain eCAR |
| 6-7 | Pay CGT/DST & LGU transfer tax |
| 7-10 | Register deeds with RD; new TCT issued |
| 10-12 | Secure new Tax Declaration in buyer’s name (Assessor’s Office) |
(Judicial routes run 6 months to several years, depending on court congestion and contests.)
7. Risks & How to De-Risk for Buyer and Heirs
| Risk | Consequence | Mitigation |
|---|---|---|
| Omitted heir surfaces later | Action for reconveyance or reduction of sale share | Publish notice; require buyer to withhold part of price in escrow; consider judicial settlement if doubts exist |
| Unpaid estate tax | RD refuses registration; BIR imposes surcharges/interest | File/amnesty early; obtain eCAR before accepting earnest money |
| Creditors of estate | Sale voidable within 2 years | Pay debts or deposit equivalent; judicial approval if uncertain |
| Forgery of signatures/IDs | Sale void | Require personal appearance for notarisation; KYC each heir |
| Agrarian/CARPER claims | Sale cannot be registered | Obtain DAR clearance; verify if land is already CLOA-covered |
8. Frequently Asked Questions
Can a single heir sell without the others? Yes, but only his/her undivided ideal share. Buyer becomes a co-owner with remaining heirs.
Is proof of publication required to register the sale? Yes. Present the newspaper’s notarised Affidavit of Publication plus clippings. Absence is a ground for RD to deny.
Do heirs need a separate Tax Identification Number? The Estate needs its own TIN (1904). Each heir must also have an individual TIN for CGT/DST returns.
What happens after the 2025 estate-tax-amnesty deadline? Statutory 6 % estate tax (TRAIN) revives with surcharges and 20 % annual interest, so settle or avail now.
Is simultaneous settlement-and-sale frowned upon? No; it is expressly recognized in BIR Ruling practice and LRA circulars. It avoids double transfer-tax costs.
Conclusion
Selling real property still titled in a deceased owner’s name is perfectly doable without first placing the title in the heirs’ names, provided you:
- Properly settle the estate (extrajudicially or judicially),
- Pay estate and sale-related taxes, and
- Register all instruments with the Registry of Deeds.
Done correctly, the buyer receives a clean Torrens title, heirs obtain the proceeds, and everyone avoids post-sale litigation.