Filipino-Australians: three simultaneous taxes and one land ownership ban

At the moment of death, Filipino-Australian families face three simultaneous tax events, a constitutional land ownership prohibition, and no bilateral treaty. The most underaddressed corridor in Asia-Pacific.

Approximately 410,000 Filipinos live in Australia. Many hold RA 9225 dual citizenship. Most have Philippine family property, Australian superannuation, and beneficiaries in both countries. Almost none have an estate plan that addresses all three countries simultaneously.

Principle 01 — The three simultaneous tax events

Principle 02 — The land ownership ban and RA 9225

The Philippine Constitution (Art. XII §7) prohibits foreign nationals from owning land. An Australian-citizen heir who is not also a Filipino citizen cannot hold title to inherited Philippine real estate — they must divest within a reasonable period, typically under time pressure and at below-market value.

RA 9225 (Citizenship Retention and Re-acquisition Act) allows former Filipino nationals who naturalised as Australians to reacquire Philippine citizenship without losing Australian citizenship. RA 9225 dual citizenship restores the constitutional right to own Philippine land — eliminating the forced divestment requirement entirely. For Filipino-Australian families with Philippine real estate, ensuring adult children have or can obtain RA 9225 dual citizenship is one of the most impactful and concrete estate planning steps available.

Principle 03 — No Australia/Philippines estate treaty

There is no bilateral estate or inheritance tax treaty between Australia and the Philippines. Australian CGT (on gains over ownership period) and Philippine estate tax (on net estate value) are different types of taxes on different events — cross-credit between them is unreliable. Both apply to Philippine-situs property simultaneously. Australian superannuation tax is entirely separate. Three taxes, no treaty, no structured relief.

Principle 04 — Philippine compulsory heirship

Philippine civil law (Civil Code Art. 887) reserves half the hereditary estate for legitimate children. A will attempting to distribute Philippine assets without respecting this reserved share will be partially unenforceable in Philippine probate — regardless of the deceased’s nationality or where the will was drafted. Philippine probate additionally requires BIR estate tax clearance, court proceedings or extrajudicial settlement, and publication of notice. Minimum timeline: 6–18 months for extrajudicial settlement; 1–3 years for court probate.

Principle 05 — The superannuation nomination gap

Many Filipino-Australians have nominated Philippine-resident parents or siblings as superannuation death benefit beneficiaries. The tax impact of directing super to a non-dependant foreign-resident nominee is rarely understood when the nomination is made. Philippine-resident parents and adult siblings are almost never Australian tax dependants. A binding death benefit nomination directing super to a Philippine-resident non-dependant sibling triggers the full 17% super tax — potentially tens of thousands of dollars on a typical super balance. Reviewing binding nominations for the dependant/non-dependant status of Philippine-resident nominees is a concrete immediate action.