22/06/2026
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๐ฎโ๐จ ๐ช๐ต๐ฎ๐ ๐ง๐ฎ๐
๐ฒ๐ ๐๐ฟ๐ฒ ๐๐๐ฒ ๐ช๐ต๐ฒ๐ป ๐๐ผ๐ป๐ฎ๐๐ถ๐ป๐ด ๐ฅ๐ฒ๐ฎ๐น ๐ฃ๐ฟ๐ผ๐ฝ๐ฒ๐ฟ๐๐
Still a lot of parents think a Deed of Donation is the simple way out of estate tax later on. Just sign the papers, give the house and lot to the kids now, problem solved, right?
Not quite. The BIR does not care that no money changed hands. The moment you donate real property in the Philippines, you trigger ๐ฅ๐ฐ๐ฏ๐ฐ๐ณ'๐ด ๐ต๐ข๐น under the National Internal Revenue Code, as amended by the TRAIN Law.
๐ฐ ๐ง๐ต๐ฒ ๐ฒ ๐ฃ๐ฒ๐ฟ๐ฐ๐ฒ๐ป๐ ๐๐ผ๐ป๐ผ๐ฟ ๐ง๐ฎ๐
Under TRAIN, donor's tax is a flat 6 percent of the net gift in excess of โฑ250,000 per calendar year. That โฑ250,000 is your only exemption, and it applies whether you are donating to your own child or to a complete stranger. Donate a property worth โฑ3,000,000 and you could be looking at โฑ165,000 in donor's tax alone.
The tax is computed based on the fair market value at the time of the donation, whichever is higher between the BIR zonal value and the assessor's fair market value. And here's the part people often miss: donor's tax is the ๐ก๐๐๐๐๐ก๐๐ฉ๐ฎ ๐ค๐ ๐ฉ๐๐ ๐๐ค๐ฃ๐ค๐ง, ๐ฃ๐ค๐ฉ ๐ฉ๐๐ ๐๐ค๐ฃ๐๐. Even if the deed says the donee will shoulder it, the BIR can still go after the donor if it is unpaid.
๐ ๐ง๐ต๐ฒ ๐ข๐๐ต๐ฒ๐ฟ ๐๐ฒ๐ฒ๐
Donor's tax is not the only cost. You also have to pay Documentary Stamp Tax of 1.5 percent of the property value, a Local Transfer Tax of around 0.5 to 0.75 percent depending on your LGU, plus Registry of Deeds registration fees to get a new title issued in the donee's name.
โฐ ๐ง๐ต๐ฒ ๐ฏ๐ฌ-๐๐ฎ๐ ๐๐ฒ๐ฎ๐ฑ๐น๐ถ๐ป๐ฒ ๐ฌ๐ผ๐ ๐๐ฎ๐ป๐ป๐ผ๐ ๐ ๐ถ๐๐
The donor must file BIR Form 1800 and pay the tax within 30 days from the date the donation was made. Miss it and you're looking at a 25 percent surcharge, 12 percent annual interest, plus compromise penalty.
โ
๐ง๐ต๐ฒ ๐ฅ๐ฒ๐๐ฎ๐ฟ๐ฑ ๐ณ๐ผ๐ฟ ๐๐ผ๐ถ๐ป๐ด ๐๐ ๐ฅ๐ถ๐ด๐ต๐
Here's the silver lining: a donation made today is taxed on today's value. Since real estate in the Philippines tends to appreciate, donating early can mean paying less now than your heirs would later pay in estate tax on a property that has gone up in value. Used properly, with the right paperwork and timing, a Deed of Donation can genuinely be a smart estate planning tool, not just a shortcut.
๐ ๐ฅ๐ฒ๐ณ๐ฒ๐ฟ๐ฒ๐ป๐ฐ๐ฒ๐
โข National Internal Revenue Code (NIRC), as amended by the TRAIN Law (RA 10963), Sections 98-104
โข Revenue Regulations No. 12-2018
โข NIRC Section 196 (Documentary Stamp Tax)
โข Local Government Code of 1991 (RA 7160), on local transfer tax
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