Cost Estimation for Property Title Transfer via Deed of Donation (Philippines)

This is a practitioner-style explainer to help you forecast costs, paperwork, and timing when donating real property (land, house & lot, condo) and transferring title to the donee in the Philippines. It is general information, not legal advice. Rates and procedures can vary by locality and change over time; always verify with your BIR Revenue District Office (RDO), your Registry of Deeds (RD), and your LGU Treasurer/Assessor before paying.

1) The Legal Frame in One Page

Instrument: Deed of Donation (with an express Acceptance by the donee).
Tax regime: Under the TRAIN Law, Donor’s Tax = 6% of net gifts for the entire calendar year in excess of ₱250,000 (single, unified rate regardless of relationship).
Valuation: Use the higher of (a) BIR zonal value (for land) or (b) the Fair Market Value (FMV) per LGU Assessor’s schedule at the date of donation. Improvements often use Assessor’s FMV.
Other levies commonly triggered by a donation of real property:
- Documentary Stamp Tax (DST) on deeds of donation/conveyance of real property — typically ₱15 per ₱1,000 (≈ 1.5%) of the higher of zonal or FMV.
- Transfer Tax (LGU) — rate set by ordinance (see §4.3), usually 0.50% in provinces and up to ~0.75%–1.0% in cities/Metro Manila, computed on the same value base.
- Registration Fees (RD/LRA) — based on a published fee schedule (bracketed/percentage with minimums), plus assorted entry/annotation fees; practitioners often budget ~0.20%–0.35% of value for estimation.
- Notarial & Miscellaneous — deed drafting, notarization, certified copies, clearances, courier, etc.
Cut-offs:
- Donor’s Tax Return (BIR Form 1800) must be filed and donor’s tax paid within 30 days from the date of donation.
- Transfer Tax (LGU) is generally due within 60 days from execution of the deed (check your ordinance).
Output: BIR eCAR (Electronic Certificate Authorizing Registration), then new title in donee’s name from the RD, then new Tax Declaration from the Assessor.

2) What You Pay For (Line-Items)

2.1 Donor’s Tax (BIR)

Formula: Donor’s Tax = 6% × max(0, Net Gifts for the year − ₱250,000)

Net gifts for the year = (Sum of all donations in the calendar year) − (allowable deductions, if any).
If the property is conjugal/community, each spouse is a separate donor to the extent of their share. Each donor gets a ₱250,000 annual exemption, which can reduce the combined donor’s tax (see Example A vs B below).
Exemptions exist (e.g., donations to the national government, certain accredited NGOs for priority projects), but documentation is strict. Exemption from donor’s tax does not automatically exempt you from DST/transfer tax unless a law specifically says so.

2.2 Documentary Stamp Tax (DST)

Applied to instruments of conveyance of real property, including donations.
Typical estimate: ₱15 for every ₱1,000 (≈ 1.5%) of the higher of zonal value or Assessor’s FMV.
Payable via eDST as part of the BIR One-Time Transaction (ONETT) work-up.
Some transactions under special laws (e.g., conveyances to the government) may be DST-exempt; check the specific exemption.

2.3 Transfer Tax (LGU)

Local tax on transfer of real property ownership (sale, barter, donation, etc.).
Typical range (check your ordinance):
- Provinces: up to 0.50% of value
- Cities/Metro Manila: up to ~0.75%–1.0% of value (cities can impose up to double the provincial ceiling).
Paid to the City/Municipal/Provincial Treasurer before RD registration.

2.4 Registration Fees (Registry of Deeds / LRA)

The RD uses an LRA Schedule of Fees (bracketed/percentage), plus:
- Entry fee, issuance of new title (TCT/CCT), IT service fee, annotation fees (e.g., eCAR, tax clearances), and certified copies.
For estimation, many practitioners budget ~0.20%–0.35% of value + a few fixed charges.

2.5 Notarial, Certifications & Miscellaneous

Notarization of the deed (varies widely with value/complexity): often ₱3,000–₱10,000+ or ~0.1%–1.0%.
Clearances/Docs: Latest Real Property Tax (RPT) clearance/ORs, tax declaration, certified title copies, IDs, community tax certs, birth/marriage certs (to prove relationship), TINs for both donor and donee (BIR will require/issue if needed).
Special handling: Apostille/consularization if executed abroad; SPA if by representative.

3) Step-By-Step Procedure (with where costs arise)

Draft & Notarize the Deed of Donation
- Ensure donee’s acceptance is in the deed or in a separate acknowledged instrument.
- If conjugal/community property: include spousal consent; both spouses sign as donors.
- Fees: Notarial + drafting.
BIR ONETT (RDO where the donor is registered/domiciled)
- Submit BIR Form 1800, deed, IDs/TINs, title/TD/certified copies, RPT proofs, relationship proofs, etc.
- BIR computes Donor’s Tax and DST, collects payment, and then issues the eCAR.
- Fees: Donor’s Tax + DST (and minor BIR documentary fees, if any).
LGU Treasurer
- Present deed, eCAR, valuations; pay Transfer Tax within the ordinance’s deadline (often 60 days).
- Fees: Transfer Tax + certification fees (if any).
Registry of Deeds (RD)
- Submit eCAR, deed, owner’s duplicate title, tax clearances, proof of DST/transfer tax, IDs, etc.
- Pay Registration Fees; RD cancels old title and issues new TCT/CCT in donee’s name.
- Fees: Registration/annotation/certified copies.
Assessor’s Office
- Transfer the Tax Declaration to the donee; update RPT records.
- Fees: Minimal certification/processing fees.

4) Worked Examples (How to Budget)

Assumptions for both examples • Higher of zonal value or Assessor’s FMV (“value”) = ₱3,500,000 • DST estimated at 1.5% of value • Transfer Tax shown at 0.50% (Province) and 0.75% (City) scenarios • RD Fees estimated at 0.25% of value (midpoint of 0.20%–0.35%) • Notarial & Misc. budgeted at ₱15,000 (your mileage may vary)

Example A — Single Donor

Donor’s Tax base = ₱3,500,000 − ₱250,000 = ₱3,250,000
Donor’s Tax (6%) = 0.06 × ₱3,250,000 = ₱195,000
DST (≈1.5%) = 0.015 × ₱3,500,000 = ₱52,500
Transfer Tax
- Province @0.50%: 0.005 × ₱3,500,000 = ₱17,500
- City @0.75%: 0.0075 × ₱3,500,000 = ₱26,250
RD Fees (~0.25%) = 0.0025 × ₱3,500,000 = ₱8,750
Notarial & Misc. (est.) = ₱15,000

Estimated Totals

Province scenario: ₱195,000 + ₱52,500 + ₱17,500 + ₱8,750 + ₱15,000 = ₱288,750
City scenario: ₱195,000 + ₱52,500 + ₱26,250 + ₱8,750 + ₱15,000 = ₱297,500

Example B — Conjugal Property (Two Donors)

Each spouse is a donor of ₱1,750,000.

Per donor base = ₱1,750,000 − ₱250,000 = ₱1,500,000
Per donor tax (6%) = 0.06 × ₱1,500,000 = ₱90,000
Combined Donor’s Tax = ₱180,000 (vs ₱195,000 if only one donor)
DST and Transfer Tax and RD Fees do not change (based on total value).

Estimated Totals

Province scenario: ₱180,000 + ₱52,500 + ₱17,500 + ₱8,750 + ₱15,000 = ₱273,750
City scenario: ₱180,000 + ₱52,500 + ₱26,250 + ₱8,750 + ₱15,000 = ₱282,500

Planning insight: When property is conjugal/community, having both spouses sign as donors typically lowers total donor’s tax because each enjoys the ₱250,000 annual exemption.

5) Deadlines, Penalties, and Practicalities

Donor’s Tax: File BIR Form 1800 and pay within 30 days from donation.
- Late: Expect a 25% surcharge (for late filing/payment) plus interest per annum from due date until fully paid, and possible compromise penalties per BIR tables.
DST: Collected via eDST as part of ONETT; pay with/on filing.
Transfer Tax (LGU): Pay within the ordinance window (often 60 days); late payment triggers local surcharges/interest.
RPT (Real Property Tax): Must be up-to-date; arrears (and sometimes the current year) are often required to be settled before transfer.
eCAR: Secure from BIR first; RD will not register the donation without it.

6) Documentation Checklist (Common)

Deed of Donation (with Acceptance); if acceptance is in a separate document, it must also be notarized/acknowledged.
Owner’s Duplicate Title (TCT/CCT) and certified RD copy; Tax Declaration (land & improvements).
Valid IDs and TINs of donor(s) and donee(s) (BIR requires TIN; apply if none).
Spousal consent (if conjugal/community) and marriage certificate.
Birth certificates (if claiming relationship for records/planning/possible local perks).
Latest RPT receipts/clearance; No improvement or with improvement certification from Assessor, if applicable.
Special: SPA (if via representative); Apostille/consularization if executed abroad; board/partner resolutions for corporate donors/donees.

7) Legal Pitfalls That Affect Registration (and Sometimes Cost)

Void donations:
- Between spouses during marriage (except moderate gifts on family occasions).
- Between persons guilty of adultery/concubinage with each other, or in cases specifically barred by law.
- Of future property (property not yet owned). If the deed is void, RD will refuse or later cancel registration.
Capacity of donee: Minors generally need a legal representative to accept; acceptance formalities matter.
Reservations/Usufructs: If the donor reserves usufruct or donates only bare ownership, the BIR will value the donated interest (not the full fee simple). This can lower taxes but requires proper valuation support.
Encumbrances: Mortgages/annotations may require creditor consent; donation subject to mortgage can complicate DST and LGU computations.

8) Quick Costing Template (fill-in)

Use the higher of zonal value or Assessor’s FMV as “Value”.

Value (₱): _____________
Donor’s Tax
- If one donor: 6% × (Value − 250,000) = ₱ _____________
- If two donors (conjugal/community):
  - Per donor base = (Value ÷ 2) − 250,000
  - Per donor tax = 6% × per-donor base
  - Total donor’s tax = 2 × per-donor tax = ₱ _____________
DST (~1.5%) = 0.015 × Value = ₱ _____________
Transfer Tax (LGU rate: ___%) = (rate) × Value = ₱ _____________
RD Fees (estimate ___%) = (rate) × Value = ₱ _____________
Notarial & Misc. (lump-sum) = ₱ _____________
Estimated Total = ₱ _____________

9) FAQs

Q: Is Capital Gains Tax (CGT) due on a donation? A: No. CGT applies to sales/exchanges of real property classified as capital assets. Donations are subject to donor’s tax instead.

Q: Does VAT apply? A: Generally no, because a donation is not a sale in the ordinary course of trade or business. Edge cases exist for VAT-registered real-estate dealers; seek tailored advice if applicable.

Q: Who files and pays the donor’s tax? A: The donor files BIR Form 1800 and pays donor’s tax. The donee typically handles later stages (LGU transfer tax, RD registration), but parties can agree otherwise.

Q: Can we donate only a percentage/undivided share? A: Yes. Donation may transfer an undivided interest. Costs/taxes scale with the value of the interest donated.

Q: How long does the whole process take? A: Timing varies with BIR eCAR issuance, LGU queues, and RD workload. Plan for multiple visits and allow for verification delays.

10) Practical Tips

Get valuations early: Obtain the Assessor’s FMV printout and confirm BIR zonal values for the barangay/lot classification to avoid surprise uplifts in the tax base.
Leverage conjugal shares: If applicable, have both spouses donate their respective shares to use two ₱250,000 exemptions.
Keep RPT current: Unpaid RPT stalls both LGU and RD stages.
Names & TINs must match: Inconsistent IDs or missing TINs cause eCAR delays.
If claiming exemptions (e.g., donation to government/accredited donee), prepare the accreditation/exemption proof and expect tighter review.

11) Concise Cost Range (rule-of-thumb)

For typical residential land/house/condo donations, a ballpark all-in (Donor’s Tax + DST + LGU Transfer Tax + RD Fees + basic Notarial/Misc.) commonly lands around:

~8%–10% of value if single donor (heavily driven by the 6% donor’s tax), and
~7.5%–9.5% if conjugal/community (two donors) due to the doubled ₱250,000 exemption.

These are planning ranges, not quotes. Swap in the actual LGU rate and RD fee schedule for precision.

Bottom Line

To estimate accurately: (1) fix the value base (higher of zonal or FMV), (2) apply the 6% donor’s tax after the ₱250,000 exemption (optimize conjugality where applicable), (3) add DST (~1.5%), (4) insert your LGU transfer-tax rate, (5) budget RD fees (~0.20%–0.35%), and (6) add notarial/miscellaneous. With those six numbers, you can forecast the cash you’ll actually need to put the new title in the donee’s name.