EstateTax in the Philippines:WhatItIs and How to Settle ItBefore Selling orTransferring Inherited Property🏡�

I talk to many heirs who want to sell or transfer an inherited lot or house, but they freeze the moment they hear the words "estate tax." It doesn't have to be scary. It's much easier to handle when you understand it early.

What Is Estate Tax?

Estate tax is a tax on the right to transfer a deceased person's property to their heirs. It isn't paid by the person who passed away. The estate (through the heirs) pays it to the BIR.

How Much Is the Estate Tax?

For those who passed away on or after January 1, 2018, the rate is 6% of the net estate. The net estate is the total value of the property (land, house, vehicles, bank deposits, shares, and so on) after the allowed deductions.

The main deductions are:

• Standard deduction of ₱5 million
• Family home, up to ₱10 million (if it was truly the family's residence)
• Surviving spouse's share in conjugal or community property
• Medical expenses, up to ₱500,000 (with conditions and documents)

If the person passed away before 2018, the older law and rates apply. The date of death, not the date of filing, decides which law is used.

When Should You File and Pay?

Generally within one (1) year from the date of death. You'll use BIR Form 1801 and submit it to the Revenue District Office (RDO) where the deceased lived.

If the estate doesn't have enough cash, there are ways to pay in installments within two years without penalty, but the BIR has to approve it. Ask your RDO about this early.

What If You're Already Late?

After the deadline, a 25% surcharge plus interest is added. If the delay goes on for years, the amount can grow a lot, which is why many families are shocked. This is especially true for estates left unsettled for 10 or 20 years.

About the Estate Tax Amnesty

There have been several amnesty programs for old estates, and the last window ended in June 2025. There are bills to extend it until 2028, but please don't count on it until it's officially law. Check with the BIR or official news before you decide.

Why This Matters When Selling Property

You can't transfer the title to a buyer, or even to the heirs, until the estate tax is settled. You need the eCAR (electronic Certificate Authorizing Registration) from the BIR to transfer the title at the Registry of Deeds. So if you want to sell inherited property, estate tax is the first thing to fix.

The Usual Steps

1. Get the death certificate and a list of all the deceased's properties.
2. Identify all the heirs and their relationship to the deceased.
3. Prepare an Extrajudicial Settlement of Estate (if there's no will, no debts, and all heirs agree). It must be notarized and published in a newspaper for three consecutive weeks.
4. File the estate tax return and pay the BIR.
5. Get the eCAR, then transfer the title at the Registry of Deeds and update the tax declaration at the assessor's office.

A Few Reminders From Me 🙏

• Don't delay. Every year that passes adds cost and complications.
• Make sure all heirs are accounted for. If a sibling is abroad, you'll need a Special Power of Attorney or their personal signature.
• Keep all your documents: title, tax declaration, birth and marriage certificates, and the death certificate.
• Consult a lawyer or tax practitioner about your specific situation. This article is general information only, not legal or tax advice.

Final Thoughts

Inherited property is a blessing, and it's an even greater blessing when the papers are in order and no mess is left for the next generation. If you have questions about selling or transferring inherited land or a house, feel free to message me. I'll help however I can. God bless! ✨

📩 N. Tayamin | PRC / DHSUD Accredited Real Estate Agent

Disclaimer: This article is for general information only, based on information available as of October 2026. It is not legal, tax, or financial advice. Estate tax rules, rates, deadlines, and amnesty programs can change, and every estate is different. Please confirm the latest requirements with the BIR, or consult a licensed lawyer or tax practitioner, before making any decision. The author is not responsible for any action taken based on this article.