Estate Tax in the Philippines: Rate, Deductions, and Filing

Estate tax in the Philippines is a flat 6% of the net estate. It is a tax on the transfer of a deceased person's (the decedent's) property to their heirs — not a tax on the heirs themselves, and not the same as inheritance tax in other countries. It is levied on the privilege of transmitting the estate at the moment of death, and it must be settled before the assets can be legally transferred to the heirs.

The 6% flat rate was introduced by the Tax Reform for Acceleration and Inclusion Act (TRAIN, RA 10963) and applies to the estates of decedents who died on or after January 1, 2018. Before TRAIN, estate tax used a graduated schedule running from 5% up to 20% of the net estate, with brackets and a more complex computation. That old schedule is gone; for any death from 2018 onward the rate is a single 6% applied to the net estate.

The legal basis is Sections 84 to 97 of the National Internal Revenue Code (NIRC), as amended by TRAIN and later by the Ease of Paying Taxes Act (EOPT, RA 11976) and its implementing Revenue Regulations. Because the rate is flat, the real work in an estate tax computation is not the rate — it is correctly building the gross estate and then applying the allowed deductions to reach the net estate.

You compute estate tax in two steps. First, total the gross estate — everything the decedent owned at death, valued at fair market value on the date of death. Second, subtract the allowed deductions to arrive at the net estate. The 6% is applied only to the net estate, so the deductions directly determine how much (if any) tax is due.

For a resident or citizen decedent, the most important deductions are the standard deduction of ₱5,000,000, the family home deduction of up to ₱10,000,000, and ordinary deductions such as claims against the estate (debts) and unpaid mortgages. The standard deduction is the single most valuable item for ordinary families because it requires no receipts or substantiation at all — it is simply deducted in full.

Valuation matters. Real property is valued at the higher of the BIR zonal value or the local assessor's fair market value as of the date of death. Shares of stock, bank deposits, vehicles, and personal property are valued at their fair market value on the same date. Property the decedent received by donation or inheritance within the prior five years may qualify for a vanishing deduction to avoid double taxation.

A concrete example shows why many ordinary estates owe little or nothing. Suppose a Philippine citizen dies in 2026 leaving a house and lot worth ₱8,000,000 (which is the family home), bank deposits of ₱1,500,000, and a car worth ₱500,000. The decedent had an outstanding ₱600,000 loan that qualifies as a claim against the estate.

Start with the gross estate: ₱8,000,000 + ₱1,500,000 + ₱500,000 = ₱10,000,000. Then apply the deductions: the ₱600,000 loan (claim against the estate), the family home deduction (₱8,000,000, since it is below the ₱10,000,000 cap), and the ₱5,000,000 standard deduction. Total deductions = ₱600,000 + ₱8,000,000 + ₱5,000,000 = ₱13,600,000.

Because total deductions (₱13,600,000) exceed the gross estate (₱10,000,000), the net estate is zero, and the estate tax due is ₱0. The estate still must file BIR Form 1801 to obtain the eCAR and legally transfer the assets — a zero tax bill does not remove the filing obligation.

The estate tax return is BIR Form 1801. Under Section 90 of the NIRC, it must be filed and the tax paid within one (1) year from the decedent's death. The return is filed with the BIR through the Revenue District Office (RDO) that had jurisdiction over the decedent's place of residence at the time of death (for a non-resident, through RDO No. 39 or the office designated for that purpose).

The Ease of Paying Taxes Act (EOPT, RA 11976) modernized filing and payment: returns and payments may now be made with any Authorized Agent Bank, Revenue Collection Officer, or accredited electronic channel, rather than being strictly tied to the RDO of registration. This 'file and pay anywhere' principle reduces the logistical burden on heirs, though documentary requirements are still lodged with the proper RDO that issues the eCAR.

An extension is possible. The BIR may grant up to five (5) years to pay when the estate is settled through the courts (judicial settlement), or up to two (2) years when settled out of court (extrajudicial), upon meritorious request. The estate may also pay by installment within two years without civil penalty or interest if the cash is not immediately available — a relief introduced to ease large, illiquid estates.

Documents typically required to file BIR Form 1801

1. Certified true copy of the death certificate (PSA)
2. TIN of the decedent and of the estate (the estate gets its own TIN)
3. Notarized Extrajudicial Settlement of Estate or court order (judicial settlement)
4. Certified true copies of land titles (TCT/CCT) and the latest tax declarations
5. BIR-zonal-value and assessor's fair market value proof for real property
6. Bank certificates of deposit balances as of the date of death
7. Proof of claimed deductions (loan documents and mortgage statements — note that under TRAIN, funeral, judicial, and medical expenses are no longer deductible)
8. Sworn declaration / itemized schedule of the gross estate and deductions

Paying the estate tax is not the end — the practical goal is the eCAR (Electronic Certificate Authorizing Registration), formerly the CAR. The eCAR is the BIR's certification that the estate tax on a specific property has been paid or that no tax is due. Without it, the Registry of Deeds will not transfer land titles, banks will not release deposits, and the LTO will not transfer vehicle registration to the heirs.

The BIR issues one eCAR per property or asset covered. After filing Form 1801, paying any tax due, and submitting complete documents, the RDO processes and releases the eCAR. Heirs then present it to the relevant registry (Registry of Deeds, bank, corporate secretary, or LTO) to complete the transfer of ownership into their names.

This is why estates with zero tax due must still file: the eCAR is the legal key that unlocks the assets. Families that skip filing often discover years later that they cannot sell, mortgage, or partition inherited property until the estate is settled and the eCAR is obtained — usually with penalties and interest by then.

Estate tax is due within one year of death. File or pay late and the estate faces a 25% surcharge (50% if the failure is willful or fraudulent), plus deficiency and delinquency interest at the rate prescribed under the NIRC as amended by TRAIN (currently double the BSP legal interest rate, set at 12% per annum), plus a compromise penalty. Because interest compounds over time, a long-neglected estate can owe several times the original tax.

Historically, the government offered relief through the Estate Tax Amnesty under RA 11213 (Tax Amnesty Act of 2019), as amended by RA 11569 and later RA 11956. The amnesty allowed estates of decedents who died on or before May 31, 2022 to settle at a flat 6% of the net estate with surcharges, penalties, and interest waived. The final availment deadline was June 14, 2025.

Important for 2026: that amnesty window has closed. As of this guide, there is no active estate tax amnesty, so estates that missed the June 14, 2025 deadline are again subject to the regular surcharge and interest rules. If a new amnesty is legislated in the future it would require fresh law; do not assume amnesty relief is available today.