The Estate Tax Amnesty Has Expired: How to Settle Inherited Property Now

Six percent of the net estate, plus surcharge and interest running from a deadline that passed decades ago for many families.

Last reviewed: August 26, 2026General legal information, not legal advice
News hook: The estate tax amnesty expired on June 14, 2025. It had been extended twice — by RA 11569 and then by RA 11956, which set the availment period from June 15, 2023 to June 14, 2025 and covered estates of decedents who died on or before May 31, 2022. Extension bills are pending: House Bill 6614, which the Department of Finance supports, and Senate Bill 1866, both proposing to extend availment to December 31, 2028 for decedents who died on or before December 31, 2024. Neither has been enacted, and as of April 2026 no new extension was in force.

Legal question

The amnesty window closed. What does it now cost to settle an estate and transfer inherited land into the heirs' names, and what are the actual steps?

Applicable laws and rules

Why this matters

Untransferred inherited land is one of the largest silent legal problems in the Philippines. Families occupy and farm property for two or three generations while the title stays in a grandparent's name, because the estate tax was never paid and nobody wanted to start the process.

The consequences compound. Property in a dead person's name cannot be sold, mortgaged, used as collateral, or subdivided among heirs. It cannot be the subject of a clean lease. When one branch of the family sells anyway, the result is the wrong-lot and double-title litigation that fills the courts.

The amnesty existed precisely to clear this backlog, and for six years it made settlement cheap. That window is closed. The general regime is still far more manageable than most families assume — the 6 percent rate under the TRAIN Law is low by historical standards, and the deductions are generous — but the penalties for a long-overdue estate are real.

What the amnesty was, and what replaced it

Under RA 11213 as amended, an estate covered by the amnesty paid a flat 6 percent on the net undeclared estate, without penalties, surcharges, or interest, and with immunity from civil, criminal, and administrative liability arising from non-payment. RA 11956 extended availment to June 14, 2025 and widened coverage to decedents who died on or before May 31, 2022, regardless of whether assessments had been issued. It also allowed payment by installment within two years from the statutory date of payment without civil penalty and interest.

With the amnesty lapsed, an estate is now governed by the ordinary rules of the National Internal Revenue Code. The rate is the same 6 percent of the net estate under the TRAIN Law — but the penalty relief is gone.

What it now costs

Three components make up the bill.

The important arithmetic point is that surcharge and interest run from the original due date, which under Section 90 is one year from the decedent's death. For an estate opened in the 1990s, the interest component can exceed the tax. This is why the amnesty mattered and why the pending extension bills have support.

There is relief short of amnesty. Under Section 91, the Commissioner may grant an extension of time to pay — up to five years where the estate is settled through the courts, or two years in the case of extrajudicial settlement — where payment on the due date would impose undue hardship. Payment by installment is also available. These do not erase surcharge and interest, but they make a large liability manageable.

The steps to actually transfer the property

  1. Determine the heirs and whether there is a will. If there is a will, it must be probated in court; a will has no effect on transfer of property until allowed by a court, even where all heirs agree. If there is no will and no outstanding debts, and all heirs are of legal age (or minors are represented), the estate may be settled extrajudicially under Rule 74.
  2. Execute the settlement instrument. An Extrajudicial Settlement of Estate — with a Deed of Sale attached if the property is being sold at the same time — is executed by all heirs before a notary public. A sole heir executes an Affidavit of Self-Adjudication.
  3. Publish. Rule 74 requires publication of the extrajudicial settlement in a newspaper of general circulation once a week for three consecutive weeks. Keep the affidavit of publication and the newspaper copies; the BIR and the Registry of Deeds will ask for them.
  4. File the estate tax return with the BIR in the Revenue District Office having jurisdiction over the decedent's place of residence at death, with the TIN of the estate, the certified true copy of the death certificate, the titles and tax declarations, a certified zonal valuation or the fair market value, bank certifications, and proof of the claimed deductions.
  5. Pay the tax — or apply under Section 91 for an extension or installment arrangement.
  6. Obtain the eCAR. The BIR issues an Electronic Certificate Authorizing Registration, which is the document the Registry of Deeds requires before it will transfer a title. There is one eCAR per property.
  7. Pay the transfer tax to the province or city treasurer and secure the tax clearance, then present the eCAR, the settlement instrument, the owner's duplicate title, and the receipts to the Registry of Deeds for issuance of new titles in the heirs' names. Finally, update the tax declaration with the municipal or city assessor.

The two-year lien, and the risk of leaving heirs out

Rule 74 imposes a two-year lien on the property distributed by extrajudicial settlement, in favor of any heir or creditor who was unduly deprived of a share. Within that period such a person may compel settlement of the estate for their benefit, and the lien is annotated on the new titles.

Two practical warnings follow. First, omitting an heir — a child from another relationship, an heir living abroad, a half-sibling — does not extinguish that heir's rights; it creates a defect that surfaces at the worst moment, typically when the property is being sold. Second, buyers and banks read the annotation: a title carrying a live Rule 74 lien is harder to sell and harder to mortgage until the two years run.

Note also that Philippine succession law reserves legitimes for compulsory heirs — legitimate children and descendants, the surviving spouse, and in their absence legitimate parents and ascendants, with illegitimate children entitled to a share. Heirs cannot validly agree to a partition that impairs another compulsory heir's legitime without that heir's consent.

Where the extension bills stand

House Bill 6614, supported by the Department of Finance, and Senate Bill 1866 would extend availment to December 31, 2028, covering estates of decedents who died on or before December 31, 2024 with unpaid or accrued estate taxes as of that date. The Senate committee has been awaiting the DOF's formal position, and neither measure has been enacted. The DOF's stated rationale is to give more families the opportunity to settle obligations on inherited properties — the same rationale that produced the two prior extensions.

Because an extension has twice been granted before, there is a reasonable prospect of a third. But nothing about that prospect helps an estate today, and interest continues to accrue while Congress deliberates. Waiting for an amnesty that may not come is expensive.

What individuals should know

Start with the documents, not the tax. Locate the death certificate, the original titles, the latest tax declarations, and evidence of the family relationships. Then determine the heirs precisely. Most of the delay in these matters is not fiscal; it is the difficulty of getting every heir to sign, particularly when some are abroad — in which case a Special Power of Attorney, consularized or apostilled, will be needed.

Compute before you despair. With a ₱5 million standard deduction and a family home deduction of up to ₱10 million, a modest provincial estate frequently produces little or no estate tax. Families routinely assume the liability is ruinous, leave the property untransferred for decades, and accumulate interest on a tax that would have been small. Have the computation done.

If the estate is genuinely large or long overdue, apply under Section 91 for an extension or installment arrangement rather than doing nothing, and watch the pending extension bills — if an amnesty is enacted covering decedents who died on or before December 31, 2024, an estate that qualifies would be far cheaper to settle under it. Keep the file ready so you can file quickly if the window opens. And in the meantime, do not sell or encumber the property as if the title were clear; a sale by heirs of property still titled in a decedent's name is the origin of a large share of Philippine land litigation.

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