ESTATE TAX AMNESTY FOR UNTITLED PROPERTY IN THE PHILIPPINES A Comprehensive Legal Guide (as of 11 May 2025)
1. Why “untitled” property matters in estate settlement
Roughly half of the country’s rural parcels are still held only by tax declaration—not under the Torrens system. When the owner dies, heirs inherit nothing more than a possessory right evidenced by those tax declarations. That right is nevertheless a “real property” for estate-tax purposes, so transfer to the heirs is blocked until the Bureau of Internal Revenue (BIR) issues a clearance. Because ordinary estate-tax liabilities accumulate surcharges and interest at 20 % p.a., many families simply never settle, trapping land in the deceased’s name for decades.
The Estate Tax Amnesty Law (Republic Act 11213, as amended) was enacted precisely to unclog those dormant estates—including those whose only asset is untitled land.
2. Statutory timeline and extensions
| Law / Regulation | Key dates | Main effect |
|---|---|---|
| RA 11213 (14 Feb 2019) | Covers estates of decedents who died on or before 31 Dec 2017. Amnesty window: 15 Jun 2019 – 14 Jun 2021. | Sets a flat 6 % tax on the net estate, with no penalties, surcharge, or interest. |
| RR 6-2019 | 27 May 2019 | Implementing rules; prescribes BIR Form 2118-E and Certificate of Availment. |
| RA 11569 (11 May 2021) | Extends filing/payment deadline to 14 Jun 2023. | |
| RR 17-2021 & RR 3-2023 | 2021 & 2023 | Update documentary checklist; switch to Electronic Estate Tax Amnesty Return (e-ETAR). |
| RA 11956 (05 Aug 2023) | • Moves the decedent-cut-off forward to 31 Dec 2021 | |
| • Further extends the amnesty period to 14 Jun 2025. | ||
| RR 10-2023 | 24 Oct 2023 | Harmonises forms with RA 11956; introduces Electronic Certificate of Availment (eCOA). |
Implication: Estates of persons who died on or before 31 December 2021 may still avail until Friday, 14 June 2025—after that the ordinary (and far more expensive) estate-tax regime revives.
3. Who can and cannot avail
| ✅ Covered | ❌ Not covered |
|---|---|
| • Heirs/administrators of estates with any asset class, including land held only by tax declaration or other unregistered evidence of ownership. | |
| • Pending BIR audits on the same estate (audit is suspended upon filing). | • Estate tax cases with final and executory judgment of fraud or tax-evasion. |
| • Properties identified as ill-gotten wealth under forfeiture or plunder cases. | |
| • Decedents who died after 31 Dec 2021. |
4. Special treatment of untitled real property
| Requirement | How satisfied |
|---|---|
| Proof that the land exists and belongs to the decedent | • Latest Tax Declaration (municipal or city assessor), and |
| • A Sworn Declaration of Ownership & Possession executed by at least one heir. | |
| Proof of assessed value (for tax base) | Certified true copy of the tax declaration showing the assessed value in the year of death. |
| Higher “zonal value” check | If the BIR has already published a zonal valuation for the sitio/barangay, that zonal value (per square metre) substitutes the FMV when higher than the assessor’s value. For untitled land the BIR will accept a “locator sketch” or approved survey plan (if available) to compute area. |
| Certification that no title exists | A one-line certification from the Register of Deeds or the DENR-CENRO/LMB, or—in practice—an assessor’s certification that the parcel is “not covered by OCT/TCT.” |
| Publication & registration of the heirs’ settlement | Even without a Torrens title, an Extra-Judicial Settlement of Estate (EJS) must be: |
- Notarised;
- Published once a week for 3 consecutive weeks in a newspaper of general circulation; and
- Entered in the Registration Book of the Register of Deeds in the province/city where the property is situated (to give constructive notice). |
Tip: Do the publication before filing the e-ETAR; the BIR will want a proof of publication (affidavit of publisher plus newspaper clippings).
5. Step-by-step procedure (untitled-property variant)
- Gather core documents Death certificate, IDs of heirs, marriage/birth certificates establishing relationship, EJS (or judicial settlement), proof of valuation.
- Secure untitled-property certifications noted above.
- Prepare and file the e-ETAR (BIR Form 2118-E) through the BIR Electronic Filing and Payment System or over-the-counter at the RDO where the decedent was domiciled.
- Pay the amnesty tax — a flat 6 % of the HIGHER between (a) the total zonal FMV or (b) the total assessor’s FMV of all estate assets as of the date of death. No deductions are allowed beyond the ₱5 million standard deduction already built into the “net” estate under the TRAIN Law; but itemised deductions may still be claimed if substantiated.
- Receive the eCOA (Electronic Certificate of Availment). Processing time is statutorily limited to 15 working days; silent beyond that is deemed approval.
- Register the EJS + eCOA with the Register of Deeds (again, even for untitled land—registration is on the primary-entry book only).
- Apply for title, if desired Options: (a) Judicial or administrative confirmation of imperfect title under Section 14 (1) Property Registration Decree; (b) Free Patent for agricultural/residential land (RAs 11573 & 10023); or (c) agrarian-reform emancipation patent conversion.
6. Tax effects and subsequent transactions
| Event | Tax consequence |
|---|---|
| Transfer of possession to heirs (after eCOA) | No VAT, CGT, or DST is due; only the flat 6 % estate-tax payment. Real-Property-Tax (RPT) obligations of the previous owner are not cancelled by the amnesty, but local treasurers routinely allow compromise or condonation. |
| Heirs sell the land later | Subject to the regular Capital Gains Tax (6 %) and Documentary Stamp Tax (1.5 %) based on the higher of (a) the zonal value or (b) the selling price. |
| Donation by an heir | Donor’s tax at 6 % of FMV in excess of the ₱250 k donor’s exemption. |
| Failure to meet the 14 Jun 2025 deadline | The estate reverts to the ordinary estate-tax regime: still 6 % but now plus 25 % surcharge and 20 % annual interest, reckoned from the statutory due date (one year from death)—which can easily exceed the principal tax many times over. |
7. Practical FAQs (untitled property)
- Do we need a DENR-approved survey? Not mandatory, but it helps when the assessor’s area is outdated or when applying for title later.
- Can one heir avail if the others refuse? Yes. Any heir, executor or administrator may file “in behalf of the estate”; the BIR will not withhold the eCOA merely because of intra-family disputes.
- What if the land area declared in the tax declaration is obviously understated? Pay based on the declared area; the BIR cannot assess more once the eCOA is issued. The risk re-emerges only at the titling stage, where the DENR/LRA may question the variance.
- Must we finish titling before the deadline? No. Only the filing and payment of the amnesty return must happen on or before 14 June 2025. Titling can follow anytime, using the eCOA.
- Is the eCOA transferable? No. It simply evidences that the estate-tax liability has been settled. Ownership still changes only through the deed of settlement and subsequent registration.
8. Common pitfalls to avoid
| Pitfall | How to avoid |
|---|---|
| Assuming tax-declaration ownership is enough to sell | Complete the estate-tax amnesty first; otherwise no notary or RD will process a deed of sale. |
| Missing RPT arrears | Check with the municipal treasurer and budget for penalties or request condonation under the LGU’s real-property-tax amnesty (if any). |
| Using the “fair market value” column of the tax declaration | The BIR looks at the assessed value (40 % to 60 % of FMV) and will apply its own zonal values if higher. |
| Forgetting publication of the EJS | Courts and RDs will reject subsequent transactions if the mandatory 3-week publication is missing. |
9. Legislative outlook after 2025
Several bills in the 19ᵗʰ Congress propose either a permanent estate-tax rate of 4 % without interest, or a third amnesty extension to 2027. As of 11 May 2025, none have been enacted; the surest course remains meeting the 14 June 2025 deadline.
10. Take-away checklist for heirs of untitled land (one-page summary)
- Death certificate ✔
- Family tree + civil-registry proofs ✔
- Latest tax declaration & assessor’s certification ✔
- Sworn declaration: “No OCT/TCT” ✔
- Notarised Extra-Judicial Settlement, with 3-week newspaper publication ✔
- e-ETAR (BIR Form 2118-E) filed and paid (6 %) ✔
- Obtain eCOA within 15 days ✔
- Register EJS + eCOA at the Register of Deeds ✔
- Apply for title (optional but recommended) ✔
Final word
The 2023 amendments have deliberately simplified the paperwork for untitled property: even a single tax declaration now suffices to prove existence and value. Families that seize the window before 14 June 2025 can untangle decades of informal landholding for a fraction of the historical cost—opening the way to formal titling, collateralisation, or sale. Given the hard cut-off and the absence of certainty on further extensions, prompt action—and, ideally, professional assistance from a tax lawyer or estate practitioner—remains the safest strategy.