Republic Act No. 11953, known as the New Agrarian Emancipation Act, was signed into law on July 7, 2023. It emancipates agrarian reform beneficiaries (ARBs) from the long-standing financial burden of unpaid land amortizations under the Comprehensive Agrarian Reform Program (CARP) and predecessor laws. The statute condones all outstanding principal loans, unpaid amortizations, interests, penalties, and surcharges owed by qualified ARBs to the government, primarily through the Land Bank of the Philippines (LBP). It covers approximately 610,054 ARBs cultivating over 1.17 million hectares of land, with total condoned debts amounting to around ₱57.56 billion. In addition to debt relief, the law explicitly grants a significant tax concession: the exclusion of awarded agrarian reform lands from the gross estate of the ARB for estate tax purposes under the National Internal Revenue Code (NIRC) of 1997, as amended.

This tax exemption forms a core component of the emancipation framework. It prevents the agrarian reform land from being subjected to estate tax upon the death of the ARB, facilitating smoother intergenerational transfer of these lands to heirs while preserving the social justice objectives of agrarian reform. The exemption operates alongside the lifting of mortgage liens on the properties following condonation and complements efforts to issue or annotate titles free from prior encumbrances.

Legal Basis

The estate tax exemption is expressly provided in Section 7 of RA 11953:

“The land awarded to ARBs shall be excluded from his/her gross estate for purposes of estate tax. The Department of the Interior and Local Government shall also encourage local government units to enact local tax amnesty on real property taxes and other transfer taxes of qualified ARBs under this section.”

This provision is implemented through the law’s Implementing Rules and Regulations (IRR), jointly formulated by the Department of Agrarian Reform (DAR), LBP, and other concerned agencies. The Bureau of Internal Revenue (BIR) has incorporated the exclusion in relevant revenue regulations governing estate tax computation, including amendments under Revenue Regulations (RR) No. 10-2023, which addresses both regular estate taxation and the ongoing Estate Tax Amnesty Program. The exclusion applies permanently to lands awarded under Presidential Decree No. 27, Republic Act No. 6657 (as amended by RA 9700), and other agrarian reform programs, provided the ARB had outstanding obligations as of the law’s effectivity.

The condonation itself, detailed in Sections 4 to 6 of RA 11953, triggers the tax relief. Upon condonation, the DAR issues a Certificate of Condonation, which is annotated on the Emancipation Patent (EP) or Certificate of Land Ownership Award (CLOA). This annotation, together with the lifting of liens, establishes the land’s full ownership status and eligibility for the estate tax exclusion.

Scope and Coverage of the Tax Exemption

The exemption is limited to the specific agrarian reform land awarded to the ARB. It does not extend to other real or personal properties owned by the decedent. The land’s fair market value (or zonal value, whichever is higher for valuation purposes) is entirely excluded from the computation of the gross estate under Section 85 of the NIRC.

Key elements of coverage:

Qualified Lands: Agricultural lands distributed under PD 27 (Operation Land Transfer), RA 6657 (CARP), RA 9700, and related programs, where the ARB incurred amortizations payable to the LBP or directly to landowners under voluntary land transfer/direct payment schemes.
Beneficiaries: Living or deceased ARBs (or their estates) who were granted EPs or CLOAs and had unpaid balances as of July 2023. The exemption benefits the heirs when the ARB is the decedent.
Taxes Covered: Primarily national estate tax. The law encourages local government units (LGUs), through the Department of the Interior and Local Government (DILG), to grant amnesty or exemptions on real property taxes (RPT) arrears and local transfer taxes (e.g., transfer tax on death or donation) applicable to these lands.
Non-Covered Items: The exemption does not apply to lands that were not awarded under agrarian reform or where the beneficiary has already fully paid the amortizations prior to the law’s effectivity. It also does not waive estate tax on non-agrarian properties.

In practice, when filing an estate tax return (BIR Form No. 1801), the executor, administrator, or heirs must deduct the value of the qualified ARB land from the total gross estate before applying deductions and computing the 6% estate tax rate.

Qualification and Determination of Eligible Lands

To avail of the exclusion:

The decedent must have been a qualified ARB under the covered programs.
The land must have been the subject of an outstanding amortization that was condoned under RA 11953.
Proof of award and condonation must be presented.

The DAR maintains the Agrarian Reform Registry and, in coordination with the LBP, prepares master lists of beneficiaries eligible for condonation. For deceased ARBs, heirs may request the DAR to issue or confirm the Certificate of Condonation posthumously, provided the original beneficiary qualified during their lifetime.

Procedural Guidelines for Claiming the Exemption

Obtain DAR Documentation:
- Secure a certified copy of the EP, CLOA, or title.
- Obtain the Certificate of Condonation from the DAR Provincial or Municipal Office, with annotation on the title via the Land Registration Authority (LRA) or Register of Deeds (RD).
- Request a certification from DAR confirming the land’s status as awarded agrarian reform land subject to RA 11953 condonation.
Estate Tax Return Preparation:
- In the schedule of real properties in the estate tax return, list the ARB land separately and indicate its exclusion pursuant to RA 11953.
- Attach supporting documents to the return filed with the BIR Revenue District Office (RDO) having jurisdiction over the decedent’s last residence.
- The gross estate is computed by subtracting the value of the excluded land from the aggregate value of all other properties.
Payment and Clearance:
- Pay any remaining estate tax due on the non-exempt portion of the estate.
- Upon approval, the BIR issues the Certificate Authorizing Registration (eCAR), which reflects the exclusion and authorizes the RD to transfer the title without estate tax liability on the ARB land.
- For properties in another city or province, the eCAR from the domicile RDO remains valid nationwide.
Title Transfer and Registration:
- Present the eCAR, death certificate, proof of heirship, and DAR documents to the RD for cancellation of the old title and issuance of new titles in the heirs’ names.
- Updated tax declarations are secured from the local assessor’s office, noting the exemption where applicable.
Local Tax Relief:
- Heirs may apply to the concerned LGU treasurer for amnesty or exemption on RPT and transfer taxes, citing Section 7 of RA 11953 and any local ordinance enacted pursuant to DILG guidance.

Electronic filing options through the BIR’s eFPS or authorized platforms are available, with the same documentary requirements.

Supporting Documents

Death certificate of the ARB decedent.
Certified true copy of EP, CLOA, or OCT/TCT showing agrarian reform award.
DAR Certificate of Condonation and lien cancellation.
Affidavit or certification from heirs attesting that the land was awarded to the decedent as an ARB.
Inventory of the estate clearly segregating the exempt land.
Proof of payment of any applicable local fees (if not fully amnestied).

Role of Government Agencies

DAR: Leads implementation, issues condonation certificates, maintains beneficiary records, and coordinates with LRA for title annotations.
BIR: Administers the estate tax exclusion through revenue regulations and verifies claims during return processing.
LBP: Provides data on original loan balances and confirms condonation for its financed accounts.
LRA/Register of Deeds: Facilitates lien cancellation and title transfers.
DILG and LGUs: Promote and enact complementary local tax relief measures.

Common Issues and Resolutions

Lack of Annotation: If the title has not yet been annotated, heirs may file a request with the DAR for expedited processing of the Certificate of Condonation.
Disputes on Qualification: Present original award documents and LBP payment history; DAR adjudication resolves eligibility.
Valuation Challenges: The excluded land’s value is simply omitted; no appraisal is needed for the exempt portion, though other properties require standard zonal or market valuation.
Multiple Heirs or Co-Owned Lands: The exclusion applies proportionally to the decedent’s share in collective CLOAs.
Interaction with Estate Tax Amnesty: The exclusion reduces the net taxable estate even when availing the 6% flat rate amnesty under RA 11213, as amended.

Impact and Compliance

The estate tax exemption under RA 11953 significantly lowers the tax burden on heirs of ARBs, often eliminating estate tax liability entirely for modest estates consisting mainly of the awarded farmland. It advances the constitutional mandate of agrarian reform by ensuring that distributed lands remain productive assets within farming families rather than being diminished by tax obligations. Compliance is straightforward once DAR documentation is secured, and the process integrates seamlessly with standard estate settlement procedures.

Adherence to these guidelines ensures that the emancipatory intent of RA 11953 is fully realized, freeing not only the original beneficiaries but also their successors from the fiscal legacies of past agrarian debts. Proper documentation and inter-agency coordination remain essential for efficient implementation across the country.