Understanding Estate Tax in the Philippines: Rates, Computation, and Recent Amnesty Updates

Inheriting property from a loved one—may it be a family home, lands, or bank accounts, is a major milestone. But before ownership can officially transfer to the heirs, there is an important financial step that needs to be settled: paying the estate tax.

Unfamiliar rules often cause delays, but understanding estate tax in the Philippines helps protect your family’s assets and avoid costly penalties.

Here is a simple, step-by-step breakdown of what estate tax is, how it is computed, and how recent updates can help you settle past obligations. 

At its simplest, estate tax is a tax imposed on the privilege of transferring the property of a deceased person (the decedent) to their lawful heir.

It is important to clarify a common misconception: estate tax is not a tax on the property itself, nor is it an income tax.  

Instead, it is an excise tax - a tax imposed on the privilege of transferring property to heirs rather than on the property itself. Think of it as the official legal requirement needed so that titles, bank accounts, and registration documents can be transferred into your name.

Until the estate tax is settled and the Bureau of Internal Revenue (BIR) issues a Certificate Authorizing Registration (CAR), the legal heir cannot legally sell or transfer the inherited assets. 

Thanks to the Tax Reform for Acceleration and Inclusion (TRAIN) Law implemented in 2018, computing the estate tax has become much simpler than it used to be.

1. The Flat Rate

The current rate for estate tax in the Philippines is a flat 6% based on the total net estate value.

2. How to Find the "Net Estate"

You do not pay 6% on the total value of everything left behind. Tax is applied only to the Net Estate, which is the remaining value after taking the gross estate and subtracting allowed deductions.

• Gross Estate: The total value of all properties (real estate, personal belongings, cash, investments) at the time of death.
• Standard Deduction: Under current laws, a standard deduction of ₱5,000,000 is automatically allowed for citizens and resident aliens, no receipts required.
• Family Home Deduction: If the deceased left behind a family home, you can deduct its value up to ₱10,000,000.
• Claims Against the Estate: Debts or unpaid mortgages owed by the deceased can also be deducted. 

Imagine an estate with the following details:

• Total Gross Assets (House and Savings): ₱12,000,000
• Less: Family Home Deduction: ₱8,000,000
• Less: Standard Deduction: ₱5,000,000

In this scenario, total deductions (₱13,000,000) exceed the gross assets (₱12,000,000), meaning the Net Estate value is ₱0. Therefore, no estate tax is owed—though filing the proper return with the BIR is still required to transfer the titles. 

For many families, properties remain in the name of grandparents or parents who passed away years or even decades ago. Over time, unpaid estate taxes accumulate heavy penalties and interest, making settlement seem out of reach.

To assist heirs in organizing these assets, the government introduced the estate tax amnesty program.  

This program gives taxpayers a fresh start by allowing them to settle past unpaid estate taxes at a flat rate of 6% on the net estate at the time of death, while completely forgiving all accrued penalties, surcharges, and interest. 

To help families settle long-unpaid estate tax liabilities, Congress previously extended the Estate Tax Amnesty through Republic Act No. 11956.  

The program provided qualified estates an opportunity to settle unpaid estate taxes at favorable terms while benefiting from the waiver of penalties, surcharges, and interest.  

However, the availment period officially ended on June 14, 2025.  

Here were the key features of the extension:

• Coverage: Estates of decedents who died on or before May 31, 2022 were eligible for the amnesty program.  
• Availment Period: Qualified taxpayers could file and pay under the program until June 14, 2025.  
• Simplified Requirements: The law reduced documentary requirements and streamlined the application process compared with regular estate tax settlements.  

As of 2026, no estate tax amnesty program is currently in effect. Families with unsettled estates must generally follow the regular estate tax rules and requirements unless a new amnesty law is enacted in the future. 

1. Gather Necessary Documents: Collect the Death Certificate, Tax Declarations, Land Titles, Bank Certificates, and valid IDs of the heirs.

2. Prepare an Extrajudicial Settlement (EJS), if applicable: If the decedent left no will and the estate qualifies for extrajudicial settlement, the heirs may execute a notarized EJS detailing how the assets will be divided.  

   The EJS must generally be published in a newspaper of general circulation once a week for three consecutive weeks.

3. Prepare BIR Form 1801: Accomplish the Estate Tax Return and attach the required supporting documents. For estates previously covered by the amnesty program, taxpayers were required to submit the prescribed Estate Tax Amnesty Return during the availment period.  
4. Submit and Pay: File the required documents with the appropriate BIR office, pay the computed estate tax, and secure the Certificate Authorizing Registration (CAR) or electronic CAR (eCAR), which is necessary for transferring ownership of inherited assets. 

Settling estate tax in the Philippines helps you clear property titles and protect your family's assets.

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