8 Requirements to Avoid Estate Tax Penalty in the Philippines 2025

What Are the Required Documents for Payment of Philippine Estate Tax

If you think inheriting property in the Philippines is that easy, think again. Many Filipinos don’t realize that failing to process the estate tax can lead to huge penalties. So if you’re still not aware of your responsibilities as heirs, now is the time to learn how to process an inherited property to avoid penalties and quickly transfer the ownership under your name. Here’s a quick guide on the updated 2025 requirements for Filipinos when paying estate taxes.

Consequences of Not Paying Estate Tax

Apparently, if you don’t file and pay your estate taxes on time, you will be charged a 25% surcharge on the tax due, 12% annual interest, and a compromise penalty depending on the amount owed. In addition, you also won’t be able to legally transfer the property title. Meaning, you can’t sell the property, face disputes among heirs, or get exposed to future legal claims.

Requirements to Avoid Penalties on Inherited Property

Not all Filipinos are aware that after their father’s death, they will need to pay the estate tax - even if their mother is still alive. Every year, penalty charges add up for unsettled estate taxes. Some Filipinos, on the other hand, tend to delay settling their estate taxes because they’ve thought they need to produce an extrajudicial settlement with all the heirs’ signatures.
The estate tax is a tax required to transfer the title or ownership of the property from the deceased owner to the heirs. However, you don’t need to submit an EJS signed by all the involved parties to pay this tax to the BIR. This is one of the main reasons why a lot of Filipinos don’t file for estate tax after their patriarch passes away.
Here are the eight requirements that you will need to settle your taxes for the inherited properties without penalty:

1. Certified True Copy of the Death Certificate of the deceased owner.
   
   
2. Tax Identification Number of the deceased and the heirs.
   
   
3. One valid government ID.
   
   
4. Certified True Copy of the Land Title.
   
   
5. Certified True Copy of the Tax Declaration, if there is a house or building on the property.
   
   
6. Certified True Copy of No Improvement, if there’s no structure built on the land.
   
   
7. Certificate of Personal Properties – including stocks, bank deposits, investments, and vehicles owned. This is important because it’s a requirement by banks when heirs withdraw the money of their deceased family members.
   
   
8. Special Power of Attorney, if a representative will be processing the estate tax filing and payment. A real estate broker or licensed agent could represent this.
   

Final Thoughts

If you’ve been delaying the process of paying your estate taxes, now is the time to settle it. By doing so, you can avoid incurring much bigger penalties. Again, the extrajudicial settlement can be submitted later. For other related inquiries regarding the estate tax amnesty 2025, please don’t hesitate to send us a message. You may also list your house and lot for sale in Baguio City or other parts of the country on the REALS.PH website.