1. Why “timing” matters in estate transfers

In Philippine estate practice, many disputes and surprises do not come from what must be paid, but when the government (and the parties) legally fix:

the taxable event (when the “transfer” is deemed to happen),
the valuation date (what date controls the property’s value),
the payment deadline (when penalties begin), and
the documentary and registration sequence (what must be obtained first before title can move).

Because estate settlements often happen months or years after death, the timing rules directly affect how much is computed, whether penalties apply, and which government values (zonal/assessed schedules) are used.

In common Philippine usage, “transfer fee” in estate matters typically refers to local transfer tax paid to the LGU (Treasurer’s Office) and/or registration/transfer fees at the Registry of Deeds—both of which are downstream of BIR estate tax clearance (CAR/eCAR). This article covers the entire timing framework so you can see where the computations “lock in.”

2. The legal moment of “transfer” in inheritance

2.1 Succession opens at death

Under Philippine civil law, succession opens at the moment of death, and heirs acquire rights to the estate at that moment (subject to estate obligations and settlement processes). This is why many tax rules treat date of death as the anchor point.

2.2 But registration happens later

Even if heirs “acquire” at death, titles do not automatically change. Transfers of real property must be registered with the Registry of Deeds (and for tax compliance, processed through the BIR and the LGU). So, estate transfers have a split reality:

Civil-law transfer concept: at death
Administrative/registration transfer: when documents are processed and titles are updated

This split is the source of many timing misunderstandings.

3. What “transfer fees” exist in estate settlements

In a typical estate transfer of real property, you encounter these money items, each with its own timing logic:

Estate tax (national tax, BIR)
Local transfer tax (LGU tax, Treasurer’s Office)
Registration fees (Registry of Deeds / LRA fee schedules)
Other possible charges (notarial fees, publication for extrajudicial settlement, certifications, possible DST depending on instrument, etc.)

This article focuses on when computation is determined for (1)–(3), because those are the ones commonly called “transfer fees” in practice.

4. Estate tax: when computation is fixed

4.1 Valuation date: generally the date of death

For estate tax, the computation is fundamentally anchored on the net estate as of the date of death. That includes valuation of real property and other assets at that point in time, using the prescribed valuation rules.

4.2 What value is used for real property (conceptually)

In practice, real property valuation for estate tax typically uses the higher of government-recognized benchmarks (commonly involving BIR zonal value and the assessor’s fair market value/assessed value framework). The key point for timing is:

The estate tax base is tied to the decedent’s death, not to when heirs finally settle or register years later.

4.3 Filing and payment timing (high-level)

The estate tax return is generally due within a statutory period from death (with possible extensions in certain cases). If settlement is delayed and the return is filed late, surcharges, interest, and compromise penalties may apply—so even if values are “as of death,” the total amount due can balloon because of penalties.

4.4 Practical timing consequence

Estate tax is computed first in the real-world workflow because the BIR will issue a Certificate Authorizing Registration (CAR/eCAR) only after compliance. Without CAR/eCAR, the LGU and Registry of Deeds usually will not complete transfer registration.

5. Local transfer tax (“transfer fee” at City Hall): when computation is fixed

5.1 The taxable event: transfer by succession is taxable under local transfer tax rules

Local transfer tax (under the Local Government Code framework and the LGU’s revenue ordinance) generally applies to the sale, donation, barter, or any other mode of transferring ownership/beneficial title of real property. In practice, LGUs treat inheritance/succession as a mode of transfer for which transfer tax is collected before issuing the local transfer tax clearance needed for registration.

5.2 Deadline timing: commonly “within 60 days,” with a special reference to death for estates

A widely applied rule in LGU practice is that local transfer tax should be paid within a set period from:

the date of the deed/instrument (for sales/donations), or
the date of death (for transfers by succession)

Late payment can trigger surcharges and interest under local ordinance rules.

5.3 The computation base: “consideration vs fair market value,” but inheritance has no “price”

Local transfer tax is typically computed as a percentage of the higher of:

the total consideration (price), or
the fair market value (as determined under the applicable benchmarks recognized by the LGU/ordinance)

For inheritance, there is usually no consideration. So the practical result is:

The base becomes the fair market value benchmark required/recognized by that LGU.

5.4 The real timing question: which schedule of values is used—at death or at registration?

This is the part that causes the most confusion.

Conceptually, because succession occurs at death, many assume the LGU must use values “as of death.” But administratively, LGUs often compute transfer tax using the current values available at the time of processing (zonal schedules, assessor schedules, or whichever benchmark the ordinance requires), especially when the settlement is delayed for years.

What you should understand is this:

Estate tax valuation is strongly anchored to death.
Local transfer tax valuation is anchored to the ordinance base and the LGU’s current valuation references used in processing. In delayed estates, this can produce a mismatch between (a) estate tax valuation logic and (b) the LGU’s present computation references—unless the LGU accepts a “value as of death” showing under its ordinance and procedures.

Practical reality: Most LGUs will not compute in a vacuum; they compute using the valuation references they can verify at the time you apply (assessor’s schedule, BIR zonal references, and supporting documents). If your estate is very old, expect the LGU to scrutinize the basis and apply the ordinance’s method, sometimes resulting in higher figures than expected.

5.5 Rate timing: rates vary by location

The transfer tax rate is capped by law and implemented via ordinance; rates differ for:

provinces,
cities, and
Metro Manila localities

So “when” matters not just for value schedules but also because you must identify the correct LGU that has taxing authority over the property location at the time you process the transfer.

6. Registry of Deeds registration fees: when computation is fixed

6.1 Registration fees are computed upon filing/registration

Unlike estate tax (date-of-death anchored), and unlike local transfer tax (ordinance anchored), registration fees are computed when you present documents for registration.

These fees are generally based on:

the value declared in the instrument,
the assessed/fair market value benchmarks required by the Registry,
and the applicable fee schedule.

6.2 Timing consequence

If you delay registration for years, you don’t “lock in” old registration fees. The computation is done at the time of registration, using the rules and fee schedules then in effect (subject to whatever transitional rules apply).

7. The standard chronological workflow (and where computation happens)

Step 1: Determine settlement route

Extrajudicial settlement (common when heirs agree and legal requirements are met)
Judicial settlement (when there are disputes, minors, issues, etc.)

This matters because it determines your documents and timelines, but does not change the fundamental “death anchor” for estate tax.

Step 2: Prepare estate documents and valuations

At this stage, you gather:

death certificate,
title/tax declaration,
assessor certifications,
BIR zonal/fair market references as needed,
estate inventories, deductions, and proof of claims/expenses.

Step 3: File and pay estate tax; secure CAR/eCAR (BIR)

This is where the estate tax computation is finalized for compliance purposes.

Step 4: Pay local transfer tax (LGU Treasurer)

This is where the common “transfer fee” is computed. Timing issues typically show up here if:

the estate is old,
values have changed,
the LGU has strict documentary requirements,
there are multiple properties in different LGUs.

Step 5: Pay Registry of Deeds fees; register the transfer

This is where registration fee computation happens and titles are actually updated.

8. Common timing scenarios and how computations behave

Scenario A: Estate settled quickly (within the legal deadlines)

Estate tax: computed at death-date values; minimal penalties
LGU transfer tax: computed smoothly using current verified references; usually aligned
Registration fees: computed at registration; no major surprises

Scenario B: Estate settled years late

Estate tax: still anchored to death-date valuation logic, but penalties/interest may dominate the total due
LGU transfer tax: may be computed using the LGU’s then-current valuation references and procedures, potentially higher
Registration fees: computed at time of registration, under then-current fee schedules

Scenario C: Extrajudicial settlement with simultaneous sale (EJS with sale)

This is where timing becomes layered:

You may be dealing with:
- transfer by succession (to heirs), and
- transfer by sale (from heirs/estate to buyer)

Depending on how the documents are structured and in what sequence the BIR processes them, you can trigger:

different tax treatments (estate tax compliance first, then sale-related taxes), and
additional local transfer tax computations.

Scenario D: Partition among heirs

A partition can be simple (each receives their ideal share in value) or complex (unequal allocations with equalization). Timing and instrument drafting can affect whether authorities treat it as a mere partition incident to settlement or as involving taxable transfers beyond inheritance.

9. Key misconceptions about “when transfer fees are computed”

“Heirs already own it at death, so everything must be computed using death-date values.” Estate tax: largely yes on valuation anchor. LGU transfer tax and registration fees: not always; they’re computed when you apply, using ordinance/fee schedule methods and verifiable references.
“If we delay, we might pay less because the deed is old.” Usually the opposite: penalties accrue; and valuation references used by LGU/Registry may be higher later.
“Transfer tax is the same as estate tax.” Estate tax is national (BIR). Transfer tax is local (LGU). They have different legal bases, rates, deadlines, and computation mechanics.
“Once we pay estate tax, title transfer is automatic.” Estate tax clearance (CAR/eCAR) is necessary, but you still must pay local transfer tax and registration fees and complete registration.

10. Practical guidance on “locking in” computation outcomes

10.1 If the goal is predictability

Start by anchoring your estate tax computations on the date of death and gather the supporting valuation documents early.
For local transfer tax, ask the LGU what valuation references they will accept (assessor schedule, BIR zonal references, certifications) and prepare those documents before payment.
Expect that registration fee computation is done at filing—so budget for present fee schedules.

10.2 If the estate is very old

The main drivers of cost become:

penalties and interest (estate tax and sometimes local charges), and
potential application of current valuation references at the LGU/Registry stage.

In old estates, careful document preparation and correct instrument structuring often matter as much as the raw valuation.

11. A clean takeaway: “three clocks” govern estate transfer computations

Estate tax clock (BIR): anchored to the date of death (plus penalties if late)
LGU transfer tax clock (Treasurer): anchored to the LGU ordinance rules and processing timing, with deadlines often keyed to death/instrument date
Registration fee clock (Registry of Deeds): anchored to the time of registration

Understanding which clock you are dealing with is the core of mastering the “timing of transfer fee computation” in Philippine estate settlements.

12. Checklist: questions that resolve most timing disputes

What is the date of death, and when was the estate tax return actually filed/paid?
What properties are involved, and which LGU has authority over each property location?
Is the settlement extrajudicial or judicial, and what instruments will be registered?
For LGU transfer tax, what is the ordinance base (consideration vs FMV benchmark) and what valuation references does the LGU require?
Are there follow-on transfers (sale to a buyer, unequal partition) that trigger additional computations?
When will the documents be presented to the Registry of Deeds (because that’s when registration fees are computed)?

If you want, paste a hypothetical timeline (date of death, planned filing date, property location, and whether it’s EJS, EJS with sale, or judicial settlement), and I’ll map exactly which computations are “death-anchored” versus “processing-anchored,” and where penalties typically arise.