For those living here in the U.S., most would rather sell the real estate properties they inherited in the Philippines than deal with the hassle of maintaining properties thousands of miles away, not to mention the costs. There are, however, important things one must know to ensure that the sale goes smoothly and legally.
First, if the property is inherited, as when it was left behind by a deceased parent, it cannot be sold right away without settling the estate of the deceased. In the Philippines, no properties left behind by a deceased person can pass on to his/her heirs unless the deceased’s estate is settled, either judicially or extrajudicially. Estate is the collective term for all the properties and assets left behind by a deceased person at the time of death. The estate is usually settled by identifying and gathering all the properties and assets left behind by the deceased, paying off all debts and liabilities that the deceased may have, and distributing the remaining properties to the lawful heirs.
Second, after the estate is settled, each heir is only entitled to a portion of the property left by the deceased unless the other heirs waived or sold their shares to one or some of their co-heirs. Thus, an heir can only sell his/her share of the inherited property and such parts as are transferred to him/her, if that is the case. Normally, however, a buyer would not want to become a co-owner with other people so most likely the buyer will offer to buy the whole property. In this case, all the heirs must agree to sell their respective shares and sign a joint deed of sale.
It is also possible to physically partition the property so that individual titles may issue in the name of each heir, thereby making it easy for each heir to sell his/her share without the buyer becoming a co-owner of the non-selling heirs. This would only be practical if the partitioned properties would still be left with substantial value and size.
Finally, in addition to the estate tax that must be paid in the settlement of the estate, the selling heir must pay capital gains tax, which is 6% of the gross selling price.