LAST CALL: ESTATE TAX AMNESTY

Last Call: Estate Tax Amnesty

The estate tax amnesty will end a month from now (June 14, 2025).

Why does this matter?

Many properties in the Philippines are still under the names of deceased family members—often patriarchs who passed away years ago. In most cases, the heirs haven't transferred the title because they couldn’t afford the estate tax. So, they just continue using the property without legal ownership.

Before the TRAIN Law in 2018, estate tax rates could go as high as 20%, calculated based on the zonal value at the time of the decedent’s death.

Take this example:

A property had a zonal value of Php30 million in 2010.

The decedent owned half of it, so the taxable estate was Php15 million.

At 20%, the estate tax was Php3 million.

With 20% annual interest, by 2023, the estate tax liability would have ballooned to Php32 million.

If the heirs wanted to sell the property in 2023 (now worth Php50 million), they’d end up with just Php15 million after settling the Php32 million estate tax and Php3 million capital gains tax.

Here’s where the amnesty helps:

Under the amnesty:

The estate tax is reduced to 6%, still based on the 2010 zonal value.

All penalties and interest are waived.

So instead of Php32 million, the heirs would only pay Php900,000 in estate tax. Their net proceeds from the sale? Php46.1 million.

If the heirs still can’t afford the amnesty tax, they can sell the property and have the buyer shoulder the 6% estate tax through an “Extrajudicial Settlement with Absolute Sale.” Most buyers would be willing to pay Php900K in taxes—but not Php32 million.

However, if the heirs miss the June 14, 2025 deadline, the estate tax shoots back up—and continues to grow at 12% per year (post-TRAIN rate). Worse, the government may auction off the property for tax delinquency.

Disclaimer: Figures used here are simplified to illustrate the importance of this opportunity.