Here’s a practical, everything-you-need-to-know legal guide—Philippine context—on the Estate Tax Family Home Exemption for an Overseas Filipino (OF) decedent. I’ll unpack the rules, eligibility tests, valuation and documentation quirks, and thorny edge cases when the decedent lived or worked abroad.

Big picture

For estate tax under the TRAIN Law framework (single 6% estate tax on the net estate), the law allows two major, often-confused reliefs that can work together:

Standard deduction — ₱5,000,000 (no need to prove expenses)
Family home deduction — up to ₱10,000,000 of the family home’s fair market value that is included in the gross estate

This “family home” rule is powerful but technical—especially when the decedent was an Overseas Filipino (non-resident citizen/OFW or a resident who had been working abroad).

What counts as a “family home”?

It’s the dwelling where the decedent’s family actually resided as a family unit.
It may be conjugal/community, exclusive, or even titled in the other spouse’s name—what matters is (a) the home’s legal inclusion in the decedent’s gross estate and (b) the fact of family residence.
Only one family home qualifies for the deduction.
Temporary absence (e.g., the decedent’s overseas deployment) does not defeat the status if the family continued to reside there and intent to return remained.

Key test: Was this the principal, actual family residence at the time of death?

Amount of the deduction

Cap: ₱10,000,000 based on fair market value (FMV) at death.
Ceiling vs. inclusion rule: the deduction cannot exceed the value of the family home that is actually included in the gross estate.

Examples

Conjugal/community home worth ₱12M. Only ½ (₱6M) enters the decedent’s gross estate. Deduction is capped at ₱6M (not ₱10M).
Exclusively owned home worth ₱8M. Entire ₱8M is in the gross estate; allowable family home deduction is ₱8M (within the ₱10M cap).
Home worth ₱16M. If fully included, family home deduction is ₱10M; the excess ₱6M remains taxable.

Mortgage note: The property’s full FMV enters the gross estate; the unpaid mortgage is deducted separately under “claims against the estate.” The family home deduction then applies subject to the inclusion cap above.

OF decedent: situs & scope

Citizen vs. alien (why this matters)

Filipino citizens (resident or non-resident) — taxed on worldwide estate. A family home abroad can qualify, provided it’s in the gross estate and it was the actual family residence at death.
Non-resident aliens — taxed only on Philippine-situs properties; they cannot invoke a family home deduction for a foreign home because it’s outside the Philippine tax base.

Two frequent OF scenarios

Family home in the Philippines; decedent worked abroad.
- If the spouse/children resided in the PH home and the decedent was merely temporarily absent (deployment/contract), the PH house is generally the family home.
- Deductible up to the ₱10M cap (subject to inclusion cap and other rules).
Family home abroad (e.g., Dubai/Canada), decedent a Filipino citizen.
- The foreign home is part of the worldwide estate and may qualify as family home (principal residence at death).
- Convert FMV to PHP using the death-date rate; ensure apostilled title/valuation and residency proofs.

Valuation basics

PH real property: Use the higher of (a) zonal value or (b) assessor’s FMV (tax declaration) at death.
Foreign real property: Use a competent appraisal/assessed value per the foreign jurisdiction as of death, then convert to PHP at the death-date exchange rate used for estate tax filings.

Practical tip: If the property is co-owned, only the decedent’s share is included and, therefore, the deduction ceiling tracks that included value.

Ownership & marital-property wrinkles

Absolute community / conjugal partnership: By default, ½ of community/conjugal property is presumed the decedent’s, unless proven otherwise. The family home deduction can apply, but is limited to the portion included in the decedent’s gross estate.
Exclusive (separate) property: 100% inclusion → up to ₱10M deduction (still not more than the property’s included value).
Titled solely to the surviving spouse:
- If truly exclusive to the survivor (not community property), no inclusion in decedent’s estate → no family home deduction.
- If it’s community/conjugal in truth despite title, prove the regime (e.g., no marriage settlement, acquisition during the marriage) so the decedent’s ½ share is included; the deduction can then attach to that included share (subject to documentation).

Claiming the deduction: documentary checklist

Core proofs (PH property):

TCT/CCT or proof of ownership; tax declaration (land & improvements) at death
Barangay certification or similar local proof that this was the family’s actual residence at death
Utility bills, IDs, school/employment records, sworn statements showing habitual residence
Photos of the home; if under construction/repair, show occupancy patterns

If the family home is abroad (and the decedent is a Filipino citizen):

Title/ownership document (apostilled/consularized)
Local residency proof (city certificate, lease history if owned recently, utility bills) establishing principal residence at death
Valuation/appraisal at death (apostilled/consularized), with English translation if needed
Currency conversion working papers (death-date rate) used in the estate return

When co-owned / conjugal:

Marriage certificate; proof of property regime (absence of pre-nup implies absolute community under default rules)
Acquisition documents (date of purchase vs. date of marriage) to establish whether property is community or exclusive

Plus the usual estate-tax return set:

BIR Form 1801 (Estate Tax Return)
Death certificate
List of assets & liabilities with support (bank certs, titles, mortgages)
TIN for the estate and heirs (if needed), IDs, authority of representative/administrator

Timing & procedure (high level)

Determine situs & composition of the estate; pin down which property is the family home at death.
Value assets as of death; identify decedent’s share for conjugal/community assets.
Compile proofs of actual family residence at death.
File BIR Form 1801 within one (1) year from death (extensions may be available for good cause), and pay the 6% estate tax on the net estate.
Keep all substantiation on hand—BIR examiners may request barangay/foreign residency certifications, utility histories, and photos to confirm actual family residence.

Interaction with other deductions & credits

Standard deduction (₱5M) — separate and can be claimed in addition to the family home deduction.
Claims against the estate (debts/mortgages) — deductible; ensure the mortgagee’s certification and loan documents exist.
Transfers for public use and judicial expenses — separate categories; the family home deduction doesn’t affect eligibility.
Vanishing deduction — rarely triggered, but keep in mind for recently inherited property now passing again.
Foreign tax credit — if the foreign country taxed the same item, a limited foreign estate tax credit may be available (citizens only), subject to strict per-country/overall caps and documentation.

Edge cases & judgment calls

OFW whose spouse/children stayed in the PH home: The PH house typically qualifies as the family home despite the decedent’s physical absence abroad.
Single OF decedent: A family home can exist for an unmarried head of family (e.g., living with and supporting parents/minor siblings). Document actual residence and dependency.
Recent move: If the family moved to a new house shortly before death, the new principal residence can qualify—show actual residence at death (even if utility histories are short).
Partly rented property: If the family actually resided in a segregable dwelling unit (e.g., 2nd floor residence, ground floor commercial), the residential portion may be defensible as the family home; value and document that portion only.
Titled to a corporation/trust: Generally not a family home (no personal ownership). If held in a revocable trust or bare title, analyze substance and inclusion first; without inclusion, the family home deduction can’t attach.

Frequent pitfalls (and how to avoid them)

Claiming ₱10M by default even when the included value is less (e.g., conjugal share only) → disallowance.
No solid proof of residence at death (barangay or foreign local proofs, utilities) → challenge from BIR.
Wrong valuation date (not as of death) or using assessor’s value when zonal is higher → understatement risk.
Assuming title controls regime — title in the spouse’s name alone doesn’t decide conjugal vs. exclusive; prove acquisition date/regime.
Foreign documents not apostilled/translated → non-recognition for substantiation.

Quick workflow (OF decedent)

Pick the home: Identify the single family home (PH or abroad) that was the principal residence at death.
Prove residence: Barangay/foreign local certification + utilities/IDs + sworn statements + photos.
Prove inclusion: Ownership & property regime; determine the portion included in the decedent’s gross estate.
Value it right: FMV at death (PH: higher of zonal/assessor; foreign: local appraisal), convert to PHP (if foreign).
Compute deduction: Lesser of (i) ₱10,000,000 or (ii) the value actually included in the gross estate for that home.
Return & pay: File BIR Form 1801 with schedules, claim ₱5M standard deduction plus the computed family home deduction, and retain full substantiation.

Simple affidavit templates (you can adapt)

A. Sworn Declaration of Family Home (Philippine property)

I, ______, of legal age, [civil status], with address at ______, hereby state: (1) The property covered by TCT/CCT No. ___ located at _____ has been the principal residence of the decedent _____ and our family up to the date of death on _____. (2) The family continuously occupied said property, with temporary absences only for work or health reasons. (3) Attached are proofs of residence (barangay certification, utility bills, IDs). I execute this affidavit to support the family home deduction in the estate tax return. $Jurat$

B. Sworn Declaration of Family Home (Foreign property)

I, ______, of legal age, [relationship to decedent], residing at ______, state: (1) The property at _____ (full foreign address) has been the principal family residence of the decedent _____ as of _____ (date of death). (2) The decedent and immediate family resided there; supporting documents (title/appraisal apostilled, local residency certificate, utilities) are attached. (3) This is submitted to claim the family home deduction in the Philippine estate tax return. $Jurat$

Bottom line

The family home deduction is up to ₱10M, but never more than the home value actually included in the decedent’s gross estate.
OF decedents who are Filipino citizens may claim the deduction for a PH or foreign family home—so long as it was the actual principal residence at death, properly valued, included, and documented.
Pair it with the ₱5M standard deduction and other allowable deductions to minimize the 6% estate tax.

If you want, tell me the property’s location (PH or abroad), title/ownership set-up, and the family’s living arrangement at death, and I’ll draft a one-page checklist and a filled-out sample schedule tailored to your facts.