The passing of a loved one is a difficult period, often followed by the logistical challenge of settling their estate. In the Philippines, when a person dies without a will and leaves no debts, the heirs may opt for an Extrajudicial Settlement of Estate (EJS). This process allows heirs to divide the property among themselves without going to court, significantly reducing time and legal costs.
However, "extrajudicial" does not mean "instant." The transition of a title from the deceased to the heirs involves several government agencies, specific deadlines, and various fees.
1. The Financial Breakdown: Estimated Fees
Transferring property involves taxes and administrative fees at both the national and local levels.
| Fee Type | Rate / Basis | Agency |
|---|---|---|
| Estate Tax | 6% of the net estate value | Bureau of Internal Revenue (BIR) |
| Documentary Stamp Tax | 1.5% of the zonal value or selling price (only if there is a deed of sale/donation included) | BIR |
| Transfer Tax | 0.50% to 0.75% of the property value (varies by LGU) | City or Provincial Treasurer’s Office |
| Registration Fee | Based on a graduated table (usually approx. 0.25%) | Registry of Deeds (RD) |
| Certification Fees | Nominal (usually ₱100–₱500 per document) | BIR / LGU / RD |
| Publication Fee | ₱5,000 – ₱15,000 (depends on the newspaper) | Private Publisher |
| Notarial Fee | 1% to 2% of the property value (negotiable) | Notary Public |
Note: Under the current TRAIN Law, the Estate Tax is a flat rate of 6%. If the death occurred years ago (prior to 2018), the estate might be subject to higher graduated rates or may qualify for an Estate Tax Amnesty if a current program is active.
2. The Step-by-Step Timeline
The process generally takes 4 to 9 months, depending on the efficiency of the local offices and the completeness of the documentation.
Phase 1: Preparation and Publication (Weeks 1–4)
- Drafting the EJS: Heirs sign a "Deed of Extrajudicial Settlement of Estate." If there is only one heir, an "Affidavit of Self-Adjudication" is filed instead.
- Notarization: The document must be notarized to be considered a public instrument.
- Publication: Philippine law requires that the EJS be published in a newspaper of general circulation once a week for three consecutive weeks. This serves as a notice to any unknown creditors or excluded heirs.
Phase 2: Tax Compliance at the BIR (Months 2–5)
This is often the most time-consuming stage.
- TIN Application: A Taxpayer Identification Number (TIN) must be secured for the "Estate of [Deceased Name]."
- Filing & Payment: Heirs file the Estate Tax Return (BIR Form 1801) at the Revenue District Office (RDO) having jurisdiction over the deceased's last residence.
- Issuance of eCAR: Once the BIR verifies the payment and documents, they issue the Electronic Certificate Authorizing Registration (eCAR). This is the "golden ticket" required to transfer the title.
Phase 3: Local Government & Registry of Deeds (Months 6–9)
- Transfer Tax: Heirs must pay the Transfer Tax at the City or Provincial Treasurer’s Office. This must usually be done within 60 days of notarization or eCAR issuance to avoid penalties.
- Tax Clearance: Once paid, a Tax Clearance is issued.
- New Title Issuance: The eCAR, Tax Clearance, and the original Title are submitted to the Registry of Deeds. The RD will cancel the old title and issue a new one in the names of the heirs.
3. Mandatory Requirements Checklist
To avoid delays, heirs should gather the following documents early:
- Original Owner’s Duplicate Copy of the Title (TCT/CCT).
- Certified True Copy of the Death Certificate (issued by PSA).
- Birth Certificates of the heirs (to prove kinship).
- Marriage Certificate (if the deceased was married).
- Certified True Copy of Tax Declarations (Land and Improvement).
- Certificate of No Improvement (if the property is vacant land).
- Vicinity Map / Lot Plan.
- Affidavit of Publication from the newspaper publisher.
4. Common Pitfalls to Avoid
- Expired eCAR: The eCAR has a validity period (usually five years, but best used immediately). If it expires, you may have to go through a revalidation process.
- Zonal Value Discrepancies: The BIR uses the "Zonal Value" or the "Fair Market Value" (from the Tax Declaration), whichever is higher. Always check the latest RDO zonal values before budgeting for taxes.
- Missing Heirs: All legal heirs must sign the EJS. If one heir is abroad, they must execute a Special Power of Attorney (SPA), which must be "apostilled" or authenticated by the Philippine Consulate in that country.