Inheritance and probate in the Philippines: what happens to a foreign owner's condo.

Is my foreign will valid in the Philippines?

Yes, if it follows the formalities of the place where you live, of your own country, or of the Philippine Civil Code (Articles 816 and 817). Who inherits and in what shares follows your own national law, wherever the property is (Article 16).

So a British owner's estate is shared under British rules, not the Philippine reserved shares. Those reserved shares (the legitime: half the estate for legitimate children, Article 888) bind Filipino decedents. If your spouse is Filipino, their own estate follows them.

Does a will have to go through probate in the Philippines?

Yes. No will passes Philippine property until a Philippine court has proved and allowed it (Rules of Court, Rule 75). A will already allowed abroad can be allowed and recorded by a Philippine court on authenticated copies, after notice and a hearing (Rule 77).

One catch for families abroad: a person who does not live in the Philippines cannot be the executor or administrator (Rule 78). Someone resident has to take that role, usually under a special power of attorney from the heirs.

How is it settled when there is no will?

If there is no will and no debts, and the heirs are adults or properly represented, they can divide the estate out of court by a public instrument filed with the Registry of Deeds; a sole heir signs an affidavit of self-adjudication (Rule 74).

• The settlement is published in a newspaper once a week for three consecutive weeks.
• A bond equal to the personal property is filed.
• For two years after the split, the property stays answerable to creditors and to any heir who was left out.

With a will, or with a dispute, it goes to court.

How much estate tax is due on a Philippine condo?

A flat 6% of the net estate, for residents and non-residents alike. For a non-resident foreigner only property in the Philippines counts, and the standard deduction is PHP 500,000 (PHP 5 million for citizens and residents).

The return is due within one year of death. If the estate is short of cash, the BIR allows instalments over two years without penalty or interest.

When does the condo title move to the heir?

Only after the estate tax is paid. The Registry of Deeds cannot register an inheritance transfer without the BIR's clearance (NIRC section 95), issued as an electronic Certificate Authorizing Registration (eCAR) by the BIR office that holds the estate's tax number.

What the eCAR is and how it is issued: the Philippine eCAR explained. After it, the Registry of Deeds cancels the old condo title and issues one in the heir's name: the condo title (CCT) explained.

Can a foreigner inherit a condo or land in the Philippines?

A condo unit, yes: where the owners co-own the common areas, the Condominium Act lets a unit pass to a foreigner by hereditary succession. Land only without a will: the Constitution's exception is for hereditary succession, and the Supreme Court held it does not cover land left by will.

Where a condominium corporation holds the common areas, the transfer is not valid if it pushes the building's foreign interest past the legal limit, so the heir should check the corporation's foreign ratio first. How the foreign cap works: buying a Philippine condo as a foreigner.

Header photo: Unknown, CC0, via Wikimedia Commons. All credits: image credits.