By Hung Ou Yang
If you are not living in Taiwan but receiving a family member's notice that you are entitled to inherit your deceased close relative's estate in Taiwan, you must have lots of questions to ask apart from the deep sorrow you may have. This article will give you a guidance for inheriting the most valuable Taiwan assets, that is, real estate.
Can you inherit Taiwan real estate if you have no Taiwan nationality?
Yes, you can still inherit Taiwan real estate, that is, lands and buildings, even though you have no Taiwan nationality. However, if you are from a country where prohibiting Taiwanese people from inheriting real estate, you will not be able to inherit Taiwan real estate. This is called reciprocal policy. In practice, Taiwanese authorities rarely reject foreigners to inherit Taiwan real estate by applying the reciprocal policy. You can also check this article "Who can inherit under Taiwanese laws if there is no will?" for more information.
Will there be any restriction when foreigners inheriting Taiwan real estate?
Yes, if you have no Taiwan nationality, you will have to sell the inherited lands, which fall into the following seven categories, to Taiwan people within three years the inheritance registrations are completed.
1. Forest lands.
2. Lands for the Purpose of Fisheries.
3. Lands for the Purpose of Hunting.
4. Lands for the purpose of Salt.
5. Lands with mineral deposit.
6. Lands with Sources of water.
7. Lands lying within fortified and military areas and lands adjacent to the national frontiers.
Why your Taiwan family members are requesting you to waive your shares for inheriting Taiwan real estate?
There could be various reasons to explain why you are being requested to waive your shares for inheriting Taiwan real estate regardless of whether you have Taiwan nationality or not. One of the frequently heard reasons is that you are foreigners so that you cannot inherit. However, as stated above, this reason is definitely wrong.
Probably one of the reasons is that your Taiwan family members would like to simplify the whole inheritance procedures. When foreigners are involved, Taiwan authorities will be required to verify your identity by examining your ID documents, maybe including your birth certificate in some special circumstances. The whole inheritance procedures probably will be prolonged and become more complicated. However, good international lawyers can effectively overcome such challenges by providing appropriate documents. Thus, do not hesitate to consult qualified international lawyers for understanding more on whether you should waive your inheritance shares.
Again, as a matter of law, you are not required to waive your shares for the purpose of inheriting Taiwan real estate even though you are a foreigner.
What will be the key steps to inherit Taiwan real estate?
Like any other inheritance case, the very first step is to register your close relative's death at the Household Registration Office in Taiwan. Then, with the transcript issued by the Household Registration Office, you will be able to apply for an asset list of the deceased in front of the National Taxation Bureau. When you are not based in Taiwan, you may appoint your lawyer to complete the above procedures by a duly signed Power of Attorney. With the asset list at your hands, you will be able to know how many assets you may be entitled to inherit.
However, you will be able to register the real estate under the names of the heirs only when the inheritance taxes are paid off. Fortunately, most of the time you do not have to go through the probate procedures with Taiwan courts involved. For the authorities, the most important thing is to pay off the inheritance taxes.
For your information, you are required to file the inheritance tax return to the National Tax Bureau within six months after your close relative's death.
How can you inherit the real estate in Taiwan with the other heirs?
The most frequently seen relationship for inheriting real estate in Taiwan with other heirs is called joint ownership, similar to joint tenancy in the U.S. Since the heirs cannot easily reach a conclusion for who is supposed to inheritance which pieces of lands/buildings, most of time the heirs would start from inheriting the real estate in joint ownership. By joint ownership, any co-owner cannot solely dispose or manage the property under joint ownership. What you have over the property under joint ownership is a potential share of it, which you can neither sell nor lease it out to any third party. In general, the consent of all the co-owners will be required to dispose or manage such a property. But, yes, there will be an exception that you have to be aware of. We will talk about it later.
Another type of ownership that the heirs can use for inheriting real estate in Taiwan is called ownership in common. By ownership in common, two or more of the heirs may hold their own shares of the real estate. Of course, such shares can be registered in front of the Land Office, and the owner of the shares can solely dispose and manage his shares without the consent of other co-owners. Although it appears to be a more meaningful way for the heirs to dispose or manage the real estate they inherit, in practice, it is much more difficult than you can imagine to sell or lease the shares out under the ownership in common. After all, almost every buyer in Taiwan would like to purchase a whole piece of land and an intact unit of a building. No one would like to own real estate with other co-owners.
In terms of the shares we discussed above, you may want to check this article: "How much can you inherit under Taiwanese laws if there is no will?", to understand the shares you may inherit under different scenarios.
Of course, the heirs can reach an agreement, making a single heir to inherit a certain whole piece of land or a certain whole unit of a building, or all of the inheritance estate, absent any co-ownership involved. It will be all up to the heirs regardless of the legal inheritance shares and the mandatory shares as provided by laws. Although the heirs can reach an agreement to divide the inheritance estate in a way whatever they like, remember, it requires the consent of all the heirs. That being said, any single dissenting opinion will make the agreement fail even though the majority of the heirs believe this estate division agreement is perfect. This is the reason why most of the time the heirs will end up with joint ownership because it is definitely an easy solution at that stage.
Can your co-owners sell the real estate, either joint ownership or ownership in common, without your consent?
Yes, to avoid the two types of co-ownership, joint ownership and ownership in common, from continuing existing there, Article 34-1 of the Land Act opens a door for the majority of the co-owners. That is, for selling co-owned land or constructional improvements, it requires the consent of more than half of the co-owners, whose holding of ownership is more than half of the total share. However, if the holding of ownership is more than two thirds, the numbers of consenting co-owners will not be taken into account.
This rule may be applied to both of the joint ownership and ownership in common. For the co-owner who opposes such a transaction, he will be granted with a right of refusal. That is, he may purchase the shares based on the same terms as offered to any third party. But when it comes to Article 34-1 of the Land Act, it will always be a more complicated case which needs more detailed legal analysis in case it goes wrong.
In this context, to protect your right, again, it is always a good idea to consult a good lawyer since the very first beginning of the inheritance matter.
AUTHOR: Hung Ou Yang
Managing Partner
Taipei
+886-2-2707-9976
[email protected]
Copyright: Brain Trust International Law Firm
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
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