Land Transfer

Hello:\n\nThank you for your question. I am the Owner and Managing Partner of Recososa Law Firm, and we are based in the Philippines, with offices in Luzon, Visayas, and Mindanao. Presuming this matter involves property located in the Philippines, allow me to explain your situation clearly.\n\nFirstly, under the 1987 Philippine Constitution, only Filipino citizens and corporations at least 60 percent Filipino owned may own private land in the Philippines. When you and your wife became US citizens in 1999 and 2003, you legally lost your Filipino citizenship unless you later reacquired it under Republic Act No. 9225, the Citizenship Retention and Reacquisition Act.\n\nNow here is the issue. You purchased the land in 2008 when you were already US citizens. If at that time you were no longer Filipino citizens and had not reacquired Philippine citizenship, the acquisition of land was constitutionally prohibited. The fact that the lawyer indicated you as Filipino citizens in the contract does not cure the defect if you were in fact not Filipino citizens at that time. The law looks at your actual citizenship, not what is written.\n\nSecondly, regarding your Transfer Certificate of Title issued in 2018 stating you are Filipino citizens, that does not automatically validate the acquisition if the underlying transaction was constitutionally infirm. Titles can be questioned if acquired in violation of the Constitution.\n\nNow to your main question.\n\nCan you donate the land to your brother in law without applying for dual citizenship?\n\nTechnically, if the title is already in your name, you can execute a Deed of Donation and transfer it to a Filipino citizen, such as your brother in law, provided he is qualified to own land. However, there are serious legal considerations:\n\na.) If your ownership is legally defective due to constitutional prohibition, the property may be subject to challenge. Under jurisprudence, an alien who acquires land in violation of the Constitution cannot enforce ownership rights. However, the Supreme Court has also ruled in some cases that if land is later transferred to a qualified Filipino, the defect may be considered cured in favor of the Filipino transferee.\n\nb.) The State may theoretically initiate escheat proceedings, although in practice this is rare unless there is a complaint or a clear fraud.\n\nNow let us talk about taxes and costs.\n\nIf you execute a Deed of Donation, the following will apply:\n\n a.) Donor's Tax. Under the TRAIN Law, donor's tax is 6 percent of the fair market value or zonal value, whichever is higher, in excess of PHP 250,000 per calendar year. So if your land has a fair market value of, for example, PHP 3,000,000, the taxable base will be PHP 2,750,000 and 6 percent of that is PHP 165,000. The exact figure depends on the BIR zonal value or fair market value.\n b.) Documentary Stamp Tax, which is generally 1.5 percent of the value.\n c.) Transfer tax at the local government level.\n d.) Registration fees with the Registry of Deeds.\n\nSo financially, donation is not cheap. In some cases, selling it at fair market value may even be more practical, since capital gains tax is also 6 percent but borne by the seller, and documentary stamp tax is 1.5 percent, usually borne by the buyer.\n\nNow let me give you my honest opinion.\n\nIf you and your wife intend to keep flexibility and avoid legal vulnerability, the cleanest solution is to reacquire Philippine citizenship under RA 9225. The process is administrative, done through the Philippine Consulate if you are abroad, or through the Bureau of Immigration if you are here. Once you reacquire Philippine citizenship, your ownership of the land becomes constitutionally compliant moving forward. It removes the cloud over your title.\n\nIf you donate now without fixing citizenship, you are essentially transferring a title that could theoretically be questioned. While many do this quietly and it passes BIR and Registry processes, the legal risk remains.\n\nSo the real strategic question is this. Why donate to your brother in law instead of reacquiring citizenship and keeping control? Are you planning estate planning, asset protection, or simply risk avoidance? Because if the goal is long term security, dual citizenship is usually the smarter move.\n\nWe can review your title, the date of acquisition, and your exact citizenship timeline to assess exposure and risk. We can also compute approximate taxes based on zonal value in Xavier Estate.\n\nIf you wish, we can schedule an initial consultation via Google Meet, Zoom, or in person at our office.\n\nSincerely,\n\nATTY. JOFRE B. RECOSOSA\nOwner, Managing Partner\nRecososa Law Firm