Executive Summary

A Deed of Donation lets a parent (donor) transfer ownership of present property to a child (donee) gratuitously and irrevocably, with the donee’s express acceptance. For immovable property (land/house/condo), the donation must be in a notarized public instrument describing the property precisely, and the donee must accept in the same deed or in a separate instrument duly notified to the donor while both are alive. After execution, you must complete tax compliance (donor’s tax and local transfer tax as applicable), obtain the BIR eCAR, and complete registration with the Registry of Deeds and Assessor. Donations must respect legitime (the compulsory shares of heirs) and comply with property regime rules; otherwise they can be reduced or challenged later.

1) When a Donation Makes Sense (vs. Sale or Will)

Good fits

Parents want the child to own now (inter vivos), e.g., to settle estates early or qualify for financing, while parents may reserve usufruct (lifetime use/income).
Family wants to avoid probate on that asset later (since ownership has already changed).
Parents intend a gratuitous transfer (no consideration).

Caution/consider alternatives

The gift would impair legitimes of other compulsory heirs (spouse/children) → later reduction is possible.
The property is conjugal/community and the other spouse won’t consent.
Donor won’t retain enough for support or is trying to dispose of future property (invalid).
Plan is effectively a sale (price paid) → use a Deed of Absolute Sale instead.

2) Parties, Capacity, and Consent

Donor (parent): Must own the property, be capacitated, and retain enough means for support.
Donee (child): Must accept the donation. If a minor, a parent/guardian accepts for the minor.
Spousal consent:
- Community/Conjugal property: both spouses must sign.
- Exclusive property: the owning spouse may donate alone, subject to family-home and legitime limits.
Between spouses: Donations between husband and wife during marriage are generally void (donations to children are fine).

3) Formalities for Real Property Donations

Public Instrument (notarized):
- Identify parties (names, civil status, citizenship, TINs, addresses).
- Describe the property with TCT/CCT number, Lot/Block, area, location, and encumbrances.
- State whether any usufruct/condition is reserved.
Acceptance by Donee:
- Best practice: done in the same deed (immediate, clean).
- If separate, acceptance must be notified to the donor in authentic form, and the original deed should note that notification—both alive at acceptance.
Delivery (tradition):
- For titled land/condos, registration in the donee’s name is the typical constructive delivery.
- Without registration, as to third persons, ownership isn’t opposable.

Failure to meet acceptance/notification rules can render the donation void.

4) Structuring Options

Pure (absolute) donation – full ownership passes upon registration.
Donation with condition(s) – e.g., “maintain as family residence,” “keep property insured,” “pay realty taxes.” Breach can justify revocation.
Donation with reserved usufruct – parents keep use/usufruct (possession and fruits/rents); child gets naked ownership now and full ownership upon the usufruct’s termination (death/waiver).
Partition by donation – donors allocate specific properties to multiple children now, avoiding future co-ownership disputes.
Donation propter nuptias – in view of impending marriage (special rules; often revocable if marriage doesn’t occur).

5) Tax & Cost Overview (practical)

Donor’s Tax: Imposed on net gifts made within the calendar year; for real property the base commonly references fair market value at the time of donation (e.g., higher of zonal value vs. assessment schedule). Return and payment must be made within the statutory deadline from the donation date.
No capital gains tax on a pure donation (CGT is for sales/exchanges).
Documentary/transfer charges: Expect registration fees, transfer tax at the LGU, and notarial fees; other documentary charges may apply depending on the instrument and local practice.
BIR eCAR: The Certificate Authorizing Registration is required to transfer the title at the Registry of Deeds.
Real property tax (RPT): Arrears/clearance typically needed at registration.

Plan timing with your adviser to align donor’s tax on all gifts in the year and avoid surcharges for late filing.

6) Step-by-Step Registration Workflow

Draft the deed (include donee’s acceptance; spell out usufruct/conditions; attach valid IDs/TINs).
Notarize the deed; gather owner’s duplicate title, current Tax Declaration, RPT receipts/clearance, and IDs/TINs.
BIR processing: File donor’s tax return with supporting docs (IDs, deed, title, tax dec, valuation proofs, etc.), pay donor’s tax and documentary charges (if any), and secure the eCAR.
LGU transfer tax: Pay at the city/municipal/provincial treasurer; obtain official receipts.
Registry of Deeds: Present owner’s duplicate title, Deed of Donation, eCAR, LGU transfer tax receipt, RPT clearance. RD cancels the old title and issues a new TCT/CCT in the donee’s name, showing any annotations (e.g., usufruct, conditions, mortgages).
Assessor: Update Tax Declaration to the donee; ensure future RPT bills follow the new ownership/usufruct allocation.
Aftercare: Secure certified true copies; verify annotations appear on both the Original and Owner’s Duplicate titles.

7) Civil-Law Effects & Legal Safeguards

Irrevocability (with narrow statutory grounds)

Donations inter vivos are generally irrevocable, except for:

Ingratitude (e.g., serious offenses against the donor, refusal to support donor in need, etc.);
Non-fulfillment of conditions;
Certain specific grounds provided by law. If revocation is warranted, it requires judicial action (unless parties voluntarily reconvey).

Protection of compulsory heirs (legitime)

Lifetime donations that invade legitime are reducible upon donor’s death at the instance of compulsory heirs (spouse, children/descendants; ascendants if no descendants).
Collation: Gifts to children/descendants are brought into the hereditary mass for computation so each compulsory heir’s minimum share is preserved.
Practical planning: simulate the estate (assets less debts; add back lifetime gifts) before donating.

Family home and property regimes

Family home and marital property regimes carry consent and protection rules; do not donate the family home or conjugal/community property without the other spouse’s written consent (and without assessing family-home protections).

8) Special Situations & Edge Cases

Co-ownership: A co-owner may donate only his/her undivided share unless there is a partition first.
Encumbered property: Donations subject to existing mortgages/easements remain encumbered; lenders may require consent or assumption arrangements.
Public land/tax-declared property: Expect additional hurdles; best practice is to perfect/confirm title first.
Foreign donees: Land ownership is restricted to Filipino citizens (or qualified dual citizens). Foreign donees may receive condominium units subject to foreign-ownership caps, but land is generally prohibited.
Donee abroad or minor: Use SPA (apostilled/consularized) for acceptance and registration; minors act through legal representatives (dispositions later may need court approval).

9) Donation vs. Sale vs. Will (at a glance)

Feature	Donation (inter vivos)	Sale to Child	Will/Testamentary
When ownership transfers	Now (upon registration)	Now (for value)	At death
Main national tax	Donor’s tax	CGT/CWT (depending)	Estate tax
Control for parents	Through usufruct/conditions	Through price/loan-back/security	Full control until death
Legitime risk	Must respect legitimes (reduction possible later)	Same (collation/reduction)	Computed in estate with legitimes
Probate for the asset	No (already transferred)	No	Yes (part of estate)

10) Sample Clauses (for counsel to tailor)

Acceptance (same instrument): “I, [DONEE], of legal age, hereby ACCEPT this donation under the terms and conditions above.”
Usufruct reservation: “Donor reserves a lifelong usufruct over the Property, including possession and fruits/rents, with the obligation to preserve and pay ordinary charges. Naked ownership vests in the Donee. Full ownership consolidates upon termination of the usufruct.”
Purpose condition & revocation trigger: “This donation is made for the establishment of the Donee’s family home. Failure to use the property as principal residence for an uninterrupted period of two (2) years from transfer, without Donor’s written consent, constitutes breach and ground for revocation.”
Spousal consent (community property): “I, [SPOUSE], the Donor’s spouse, hereby CONSENT to this donation of our [community/conjugal] property.”

11) Checklists

Pre-execution

Identify ownership and property regime (exclusive vs. community/conjugal; family-home status)
Obtain TCT/CCT, Tax Declaration, RPT status, and encumbrance information
Decide on usufruct/conditions and ensure donee acceptance plan
Gather IDs/TINs of parties; if abroad, arrange SPA and apostille/consularization

Taxes & filings

File donor’s tax return and pay within the deadline
Secure eCAR
Pay local transfer tax; secure RPT clearance

Registration & aftercare

Register deed & eCAR at Registry of Deeds; obtain new title with correct annotations
Update Tax Declaration at Assessor
Store CTCs and originals securely; update billing address and insurance

12) Common Pitfalls (and fixes)

No donee acceptance / late acceptance → void donation. Fix: Always include acceptance in the same deed.
Missing spousal consent for community property → defective transfer. Fix: Verify regime; obtain written consent.
Legitime impairment → reduction after donor’s death. Fix: Simulate legitimes before donating; adjust shares or set aside free portion.
Unannotated usufruct/conditions → unenforceable vs. third persons. Fix: Ensure annotation on the new title.
Tax filing delays → surcharges/penalties; eCAR blocked. Fix: Calendar donor’s tax deadline; prepare valuation docs early.
Donating encumbered/tax-declared property → registration hurdles. Fix: Release or recognize encumbrances; perfect title first.

13) FAQs

Q1: Can parents donate to only one child? Yes—but other compulsory heirs can later seek reduction/collation if legitimes were impaired.

Q2: Is a “₱1.00 sale” safer than a donation? No. A nominal-price sale is often treated as a disguised donation, still subject to donor’s tax and succession rules.

Q3: Can donors take the property back? Generally no. Donations are irrevocable, except for ingratitude, breach of condition, or other narrow statutory grounds (invoked via proper action).

Q4: Our child is a minor. A parent/guardian accepts and manages; later dispositions may need court approval.

Q5: What if the donee plans to mortgage or sell later? A reserved usufruct or condition can limit acts; absolute restraints on alienation are disfavored—draft reasonable, purpose-linked conditions and annotate them.

Bottom Line

A Deed of Donation is a powerful, flexible way for parents to transfer real property now, especially when paired with usufruct reservations or tailored conditions. Make the deed formally perfect (public instrument + donee acceptance), respect marital-property and family-home rules, and model legitimes to avoid future reduction. Then complete BIR (donor’s tax → eCAR), LGU (transfer tax), and RD/Assessor steps so the transfer is registered and opposable to the world.