Estate tax in the Philippines, explained for families

Estate tax is a tax on what a person leaves behind when they die. For deaths from 1 January 2018 it is 6% of the net estate: everything the person owned, minus the deductions the law allows (NIRC Sec. 84, as amended by RA 10963, the TRAIN law). The return is due within one year of the death. Land, a condominium unit, a car, shares or bank deposits cannot be moved into the heirs’ names (apart from the bank withdrawals with 6% withheld, explained below) until the BIR issues an electronic Certificate Authorizing Registration (eCAR).

The executor, the administrator, or any one of the heirs files the return. Heirs who live abroad can file and act through one heir at home (see below).

For a death before 1 January 2018, the older rules and rates apply. The BIR says the rate follows “the law prevailing at the time of decedent’s death”.

What is taxed and what is deducted

The gross estate is everything the person owned at death, wherever it is if they were a Filipino citizen or resident: land and buildings, bank deposits, vehicles, shares, business interests and money owed to them.

Deductions for a citizen or resident (NIRC Sec. 86, as amended by TRAIN):

Scroll the table sideways for more

Two details catch families out:

• The family home must be the person’s residence, certified by the barangay captain. If it was conjugal or inherited, only the person’s own share counts. The BIR’s checklist says a conjugal family home worth up to PHP 10 million gives a deduction of half its value.
• Loans taken in the 3 years before death need a statement showing what the money was used for.

The BIR steps

1. Get a TIN for the estate. The estate has its own TIN, separate from the person’s (RMC 75-2026). If the person had no registered business, the heirs can register the estate at the Revenue District Office (RDO) where they will apply for the eCAR. If the person had no residence in the Philippines, it is RDO 39, South Quezon City.
2. Settle who inherits. The BIR asks for one of: an affidavit of self-adjudication (one heir), a deed of extrajudicial settlement, a court order, or a sworn declaration of all the estate’s property. See extrajudicial settlement of estate.
3. Fill in BIR Form 1801, the estate tax return. If the gross estate is over PHP 5,000,000, it must come with a statement certified by a Certified Public Accountant (NIRC Sec. 90).
4. File and pay. Since the Ease of Paying Taxes Act (RA 11976), the return can be filed and paid at any authorised agent bank, through any RDO’s revenue collection officer, or through an authorised tax software provider. The BIR now expects returns to be filed electronically.
5. Apply for the eCAR at the RDO that holds the estate’s TIN, with the documents on the BIR’s checklist: the death certificate, TINs of the person and the heirs, certified copies of titles and tax declarations, the settlement document, proof of payment, and the papers for each deduction claimed. The BIR does not accept an incomplete application. Its charter time for estates is 20 working days for the computation and 7 working days for the eCAR, from complete documents.
6. Transfer the property. With the eCAR, the heirs pay the local transfer tax and register the new titles. See extrajudicial settlement of estate for that part.

If the estate is short of cash, the law allows the tax to be paid in instalments within two years from the due date, without penalty or interest (NIRC Sec. 91(C)). The BIR’s estate tax page says a BIR official must approve the request. The BIR can also extend the time to pay by up to two years when the estate is settled out of court, or five years through the courts, if paying on time would cause undue hardship (Sec. 91(B)).

Bank deposits of the person who died

A bank that learns of a depositor’s death may still allow withdrawals, but it withholds a 6% final tax on the amount withdrawn (NIRC Sec. 97, as amended by TRAIN). Under RR 12-2018:

• the withdrawal must be made within one year of the death;
• the bank asks first for the estate’s TIN registration (BIR Form 1904, stamped received by the BIR);
• the 6% withheld is final: it is not refunded or credited against the estate tax;
• amounts withdrawn this way are left out of the gross estate.

If the deposits were instead included in the estate tax return and the tax was paid, the heirs show the eCAR and no 6% is withheld.

Heirs who live abroad

Heirs abroad do not have to fly home. The usual route is a special power of attorney (SPA) naming one heir or a trusted person at home to sign and file. An SPA signed abroad is accepted by the BIR if it has either:

• a consular acknowledgement at a Philippine embassy or consulate, signed in front of the consular officer; or
• an apostille from the country where it was signed, after it is notarised by a local notary. The Philippines joined the Apostille Convention on 14 May 2019.

The DFA says documents from a few countries that objected to the Philippines joining the convention still need legalisation by the embassy or consulate. It names Finland, Germany and Greece (an earlier advisory also named Austria). Check with your nearest Philippine embassy before you sign.

Filing late, and the amnesty

If the return is filed or the tax paid late, the law adds:

• a 25% surcharge on the tax due (50% for wilful neglect or fraud), under NIRC Sec. 248;
• interest at double the legal interest rate, which RR 21-2018 puts at 12% a year, from the due date until paid (Sec. 249).

Under RA 11976, micro and small taxpayers get a 10% surcharge and half the interest. As of 20 October 2026 the BIR has not published a rule saying whether an estate counts as one, so plan on the full rates and ask the RDO.

The estate tax amnesty is closed. The last window, under RA 11956, ended on 14 June 2025 and covered deaths on or before 31 May 2022. As of 20 October 2026, neither lawphil.net nor bir.gov.ph lists a law reopening it. Estates that filed for the amnesty by 14 June 2025 can still be finishing their eCAR.

Worked example

This is an invented estate, to show the steps. It is not a real case.

Lorna was a widow and a Philippine resident who died in 2026 without a will. She left her house (her family home, in her name only) worth PHP 3,000,000, a lot worth PHP 6,000,000 and bank deposits of PHP 1,200,000 that her children chose to declare in the return. She owed PHP 200,000 on a notarised loan taken five years earlier.

House (family home)

PHP 3,000,000

Lot

PHP 6,000,000

Bank deposits

PHP 1,200,000

Gross estate

PHP 10,200,000

Minus the notarised loan

-PHP 200,000

Minus the standard deduction

-PHP 5,000,000

Minus the family home

-PHP 3,000,000

Net taxable estate

PHP 2,000,000

Estate tax at 6%

PHP 120,000

Because the gross estate is over PHP 5,000,000, the return needs a CPA’s certified statement. If the children file within a year of her death, there is no surcharge or interest. If they had instead withdrawn the PHP 1,200,000 from the bank within the year, the bank would have withheld PHP 72,000 (6%), and the deposits would have been left out of the return.

What comes next

• No will: heirs who agree can divide the estate without going to court. See extrajudicial settlement of estate.
• A will: it must go through probate in court before it takes effect. See a last will and testament in the Philippines.
• Gifts during life: giving property away while alive is taxed differently, at 6% of gifts above PHP 250,000 a year. See donor’s tax.