Estate Tax Settlement → Land Title Transfer in the Philippines A Comprehensive Legal Guide (2025 Edition)
1 | Why this matters
An owner’s death “freezes” real property. Before heirs can mortgage, sell, or even subdivide the land, the estate tax must be paid and a new Transfer Certificate of Title (TCT) issued in their names. The Bureau of Internal Revenue (BIR), the local government, and the Registry of Deeds (RD) will not process any transfer without proof that the estate tax has been settled.
2 | Primary legal bases
| Source | Key points |
|---|---|
| National Internal Revenue Code (NIRC), as amended by TRAIN Law (RA 10963) | Flat 6 % estate-tax rate; itemized deductions retained; one-year filing deadline |
| Estate Tax Amnesty Act (RA 11213) & Extension Law (RA 11956, effective until 14 June 2025) | 6 % amnesty on undeclared or unpaid estates of decedents who died on or before 31 May 2022; waives penalties and allows partial documentation |
| Civil Code & Family Code | Rules on succession, legitimes, conjugal/community property, surviving-spouse share |
| Rules of Court, Rule 74 | Extrajudicial settlement requirements (all heirs of age, no debts, or debts paid); publication for 3 consecutive weeks |
| Local Government Code (RA 7160) | Local transfer tax (≤ 0.75 % of zonal/FMV in provinces; ≤ 0.50 % in cities/Metro Manila = “LGU transfer tax”), real-property tax (RPT) clearance |
| Land Registration Act & Property Registration Decree (PD 1529) | Mechanics of TCT cancellation and issuance of new title |
| BIR Revenue Regulations 12-2018, 17-2021, 2-2023, 3-2024 | Documentary requirements, eCAR issuance system, installment rules |
(Statutes cited up to July 6 2025.)
3 | Estate-tax fundamentals
| Item | Current rule |
|---|---|
| Tax base | Gross estate – allowable deductions |
| Rate | 6 % of net estate (or 6 % of net undeclared estate under the amnesty) |
| Filing & payment deadline | Within 1 year from date of death (BIR may grant up to 2× 30-day extensions on request) |
| Penalties if late | 25 % surcharge plus 6 % annual interest (rate floats with BSP base rate) plus compromise penalty |
| Installments | Allowed if estate lacks liquidity; must secure BIR approval and post surety bond or collateral |
| BIR form | BIR Form 1801 (Estate Tax Return); ONETT transaction |
| Estate TIN | File BIR Form 1904 to secure a separate TIN for the estate (distinct from heirs’ TINs) |
3.1 Allowable deductions (selected)
- Standard deduction – ₱5 million
- Family home – up to ₱10 million FMV
- Funeral expenses – actual, or ≤ 5 % of gross estate, max ₱200k
- Medical expenses of the last year of illness – up to ₱500k
- Debts & claims vs estate, subject to strict substantiation
- Transfer for public use, charitable bequests, RA 4917 retirement benefits, etc.
(Deduction limits apply per Secs 86–89, NIRC.)
4 | Choosing the mode of settlement
| Mode | When appropriate | Key documents | Court involvement |
|---|---|---|---|
| Extrajudicial Settlement (EJS) | All heirs are of legal age (or minors duly represented), estate has no outstanding debts | • Deed of Extrajudicial Settlement • Affidavit of Self-Adjudication (if only one heir) • Publication (3 weeks) |
None, but notarization + publication mandatory |
| Judicial Settlement (Testate or Intestate) | There is a will, disputes among heirs, or unpaid debts | Petition for probate/intestate, Letters Testamentary/Admin, Project of Partition, court-approved accounting | Probate or RTC acts as settlement court |
| Summary Settlement of Small Estates (Rule 74 §1) | Estate gross value ≤ ₱10,000 (virtually obsolete after inflation) | Petition, bond, notice & publication | MTC/RTC summary order |
Tip: You may combine an EJS with a deed of sale in one instrument (e.g., “Deed of EJS with Absolute Sale”) if heirs simultaneously sell the property—this needs its own DST and LGU transfer-tax clearance.
5 | Complete document checklist
Always bring 3 photocopy sets and the originals. BIR and RD keep at least one set.
| For BIR (Estate-tax stage) | For LGU & RD (Transfer stage) |
|---|---|
| PSA Death Certificate | BIR-issued eCAR (original) |
| TIN of estate & each heir | Owner’s duplicate title (OCT/TCT/CCT) |
| Certified true copy (CTC) of TCT/OCT/CCT | Original Deed of EJS/Sale duly notarized + Affidavit of Publication + newspaper clippings |
| Tax Declaration (Assessor) & Latest RPT receipts | Real-Property Tax (RPT) Clearance |
| BIR Form 1801 + tax payment proof | BIR Tax Clearance/DST payment (if sale) |
| Affidavit of Self-Adjudication / Deed of EJS | LGU Transfer-tax Receipt |
| Certified list of heirs (birth/marriage certificates) | Notarized Secretary’s Certificate/Board Resolution if heir is a corporation |
| Schedule of assets & liabilities (with FMVs) | RD fees (₱ +0.25 % of value + docs) |
| Valuation documents • BIR Zonal value certification • Assessor FMV certification |
New Tax Declaration after RD issues TCT |
| Proof of debts (if claimed) | IDs of all signatories |
(Under the amnesty, the BIR waives some proofs of valuation & debts.)
6 | Step-by-step procedure
Avg. timeline: 4 – 12 weeks if uncontested & documents complete. Longer if BIR audit or court settlement.
| # | Action | Reference time limit |
|---|---|---|
| 1 | Secure TINs for the estate (BIR 1904) & any heir without a TIN | ASAP |
| 2 | Gather documents & have deed(s) drafted & notarized. If EJS: publish notice 3 × in a newspaper of general circulation. | Publication must finish before RD registration |
| 3 | Compute estate tax (or amnesty) & fill up BIR 1801. You may request Certificate of Availment if under amnesty. | File within 1 year of death (or before amnesty deadline) |
| 4 | Pay estate tax at an AAB/LB branch or via electronic channels. If paying in installments, file surety bond and promissory schedule. | Installments: within 2 years, first payment upon filing |
| 5 | BIR ONETT processing: submit hard-copy dossier to the RDO covering decedent’s residence. Expect internal audit. | 2 – 8 weeks typical |
| 6 | Claim eCAR (Certificate Authorizing Registration) — one eCAR per property. Verify names and technical description. | Valid for 1 year from issuance |
| 7 | Pay LGU transfer tax at Provincial/City Treasurer (within 60 days of notarization of deed or eCAR release, whichever comes earlier). | Late payment incurs 25 % surcharge + 2 %/month interest |
| 8 | Register with RD: Submit owner’s duplicate title + eCAR + deed + transfer-tax receipt + RPT clearance. RD cancels old title & issues new TCT(s) in heirs’ names. | 2 – 6 weeks depending on RD |
| 9 | Update Assessor’s records: present new TCT to the Municipal/City Assessor for issuance of new Tax Declarations. | 1 – 3 weeks |
| 10 | Bank/stock accounts: Use eCAR & new titles as proof to release estate assets. | As needed |
7 | Taxes & fees at a glance
| Levy | Rate / Basis |
|---|---|
| Estate Tax | 6 % of net estate value |
| Documentary Stamp Tax (DST) (if deed of sale) | ₱ 15 / ₱ 1,000 of selling price or FMV, whichever higher |
| LGU Transfer Tax | ≤ 0.50 % (cities/MM) or ≤ 0.75 % (provinces) of FMV |
| Registration Fee (RD) | ≈ ₱ 8,000 – ₱ 10,000 for a ₱ 2 M parcel (0.25 % + entry fees) |
| Publication cost | ₱ 6,000 – ₱ 12,000 (Metro rates) |
| Notarial fees | 0.5 % – 1 % of property value, or flat ₱ 1,000 – ₱ 5,000 |
(Fees vary by location; always check schedule.)
8 | Special scenarios & tips
- Minor heirs – Must be represented by a court-appointed guardian. The EJS deed is signed by guardian with court approval.
- Disputed wills – Do not attempt EJS; file for probate. eCAR will require Letters of Administration/Testamentary.
- Conjugal/community property – First determine the surviving spouse’s ½ share, then compute estate tax on decedent’s ½ only.
- Property without title – Secure Free Patent/Original Certificate first, or judicial reconstitution if title lost.
- Lost owner’s duplicate title – Petition RD/LRA for re-issuance before the transfer.
- Bank deposit freeze – Banks may release up to ₱ 20,000 before estate tax clearance; larger withdrawals need BIR waiver.
- Simultaneous sale – Combine EJS with sale; two eCARs issued (one for settlement, one for sale). Estate tax must still be paid first.
- Installment sale with mortgage – RD will annotate mortgage after title transfer; BIR requires DST on mortgage, too.
- Estate Tax Amnesty – Perfect for estates with unpaid taxes of decedents who died ≤ 31 May 2022; pay 6 % of net undeclared estate or minimum ₱ 5,000, no interest. Deadline: 14 June 2025 (RA 11956).
9 | Typical timeline (uncontested EJS, Metro Manila)
Week 1-2 Gather docs, draft & notarize EJS, start publication
Week 3-4 Finish 3-week publication, compute & file estate tax
Week 5-8 BIR audit → claim eCAR
Week 9 Pay LGU transfer tax
Week 10-11 Register with RD → new TCT
Week 12 Update Assessor, secure new Tax DeclarationJudicial cases or missing docs easily stretch this to 1-2 years.
10 | Common errors (and how to avoid them)
| Pitfall | Prevention |
|---|---|
| Mis-computing deductions (e.g., double-claiming family-home deduction & FMV) | Use BIR’s Estate Tax Compute worksheet; have a CPA review |
| Missing publication of EJS | Keep dated newspaper issues; attach notarized Affidavit of Publication |
| Filing estate tax after 1 year | Request extension before lapse; if late, settle quickly—interest snowballs |
| Incomplete technical description in deed | Copy verbatim from title & have surveyor verify lot data |
| Using photocopies at RD | RD requires original TCT owner’s duplicate; order CTCs from RD of origin |
| eCAR name mismatch | Triple-check spelling & TINs before leaving BIR window |
11 | Frequently asked questions
Q1 — Can we split the land unequally if all heirs agree? Yes. Attach a Deed of Partition indicating the metes-and-bounds of each share, signed by all heirs.
Q2 — Is the estate tax “amnesty installment” different from the regular installment? No. Under RA 11956, you still pay 6 % in full. Installments apply only in regular estate-tax mode.
Q3 — Do we need a CPA? Not legally required, but BIR often queries deductions and valuation. A CPA affidavit strengthens the return.
Q4 — What if an heir lives abroad? They may execute a Special Power of Attorney authenticated by the PH embassy/consulate.
Q5 — Can we file estate tax in the decedent’s RDO even if the property is elsewhere? Yes. Estate-tax jurisdiction is based on domicile of decedent, not property situs. The eCAR is honored nationwide.
12 | Quick reference checklist ✅
- Estate TIN issued (BIR 1904)
- Deed of EJS / Affidavit of Self-Adjudication notarized
- Newspaper publication finished (3 weeks)
- RPT Clearance & updated Tax Declaration obtained
- BIR Form 1801 filed within 1 year (or amnesty deadline)
- Estate tax paid / installment bond posted
- eCAR released (one per property)
- LGU transfer-tax receipt secured (≤ 60 days)
- RD registration complete; new TCT issued
- Assessor’s office updated; new Tax Declaration released
13 | Conclusion
Settling estate tax and transferring land titles in the Philippines is primarily a tax‐driven process that intersects with succession law and property registration. While the TRAIN Law greatly simplified rates, the paperwork remains exacting. Early preparation, accurate valuation, and faithful compliance with BIR, LGU, and RD requirements prevent costly surcharges—and, more importantly, unlock the land’s full economic value for the heirs.
This article provides general information based on Philippine laws and regulations in force as of July 6 2025. It is not a substitute for personalized legal advice. Consult a Philippine lawyer or tax professional for case‐specific guidance.