Santiago-Mayol Law

24/04/2026

Estate Tax a.k.a. Inheritance Tax in the Philippines - A Boon or Bane for the Heirs?

There are two things certain in this life: Death and Taxes, so they say. This means, not breathing would not exempt you from taxes.

When you die, your estate cannot be “officially” inherited by your heirs. You, through your heirs, have to settle it judicially or extrajudicially. But this comes with a price - costs for estate tax, transfer tax, capital gains, documentary stamps tax, publication fees, and other expenses.

If you are one of the heirs and you find yourself in this situation, be wary of these costs at different stages — the BIR level; the local government level; and at the Registry of Deeds level.

Even before beginning the estate settlement, you incur notarial fees for the document of conveyance.

The BIR imposes 6% as estate tax based on the assessed value, market value, or zonal value of the inherited property, whichever is higher. If there is a sale, donation or specific waiver included in the estate settlement, the BIR may also impose 7.5% on the value of the property for the capital gains tax (6%) or donor’s tax (6%) accompanied by documentary stamps tax (1.5%).

On top of these, the local government where the property is located will charge you transfer taxes (50% of 1%) of the market or zonal value, whichever is higher.

The Registry of Deeds would also use the assessed value, market value, or zonal value, whichever is higher - to determine the registration fees to be computed.

Apparently, it is not just the amounts and rates of the taxes that you should bear in mind. Be careful, too, with the deadlines to meet so surcharges and interests would not be imposed.

Estate tax should be paid on or before the first death anniversary of the decedent. Meaning, there is a one year lead time for estate tax.

However, it is different for local transfer tax - with only 60 days of lead time from the date of death.

Why the disparity? Why the LGU has a shorter lead time than the BIR?

We say, BIR is kinder than the LGU. So, where is this policy coming from? Apparently, from the Local Tax Code. But, what is the wisdom behind this?

Don’t they know that most of the time, prior to the death of a decedent, he or she was ill or hospitalized, thereby the family had incurred medical costs?

Don’t they know that even after 60 days from the decedent’s death, the heirs are still grieving that estate settlement is still being set aside as a troublesome obligation?

Don’t they know that after the death of decedent, the heirs are indecisive on what to do or how to go about the estate settlement?

Don’t they know that there are situations where even the heirs are not ready to receive the estate just yet?

Don’t they know that, rather than settle the estate, heirs would start quarreling over the distribution of estate and most often would result to a long court battle?

Don’t they know that regardless of how vast the estate, initial costs (in cash) for estate settlement should be expended not by the decedent but by the heirs with the expectation of reimbursement?

Conversely, not all heirs have enough funds to cover in the meanwhile the estate tax and other costs especially if same would require a large amount, and selling the property to finance the estate settlement is also difficult.

So, why the 60-day period only for transfer tax compliance?

23/02/2026

Tomorrow, February 24, 2026, is Cebu City’s 89th Charter Day, a non-working holiday.

Regardless, our Law Office is open from 1:00 PM to 5:00 PM for your legal concerns and notarial needs.

Thank you.

26/12/2025

Merry Christmas and a Blessed New Year to All!

This Office and Notary Public is closed for
the holidays and for the rest of the year.

We will be back on January 5, 2026 to assist you on your legal and documentary concerns.

Thank you very much!

Santiago-Mayol Law Office & Notary Public
[email protected]
09662794128

17/10/2025

18/08/2025

We’re out of office this week. We’ll be back on August 26, 2025.

Office schedule is at 9:30A.M. to 3:30P.M., Mondays to Fridays. Saturdays are by special appointment. No office schedule on Sundays and holidays.

For inquiries, text 09662794128 or email [email protected].

25/04/2025

https://www.facebook.com/share/p/17ficwSWmp/?

16/04/2025

We will take a break away from our usual duties in this Office for the Holy Week. Office resumes on Monday, April 21, 2025.

Thank you and have a glorious Easter!

11/03/2025

The has taken an important step towards modernizing legal processes by approving the Rules on Electronic Notarization (E-Notarization Rules) – a significant reform that leverages technology to make notarial services more accessible and efficient nationwide.

Under A.M. No. 24-10-14-SC, the Supreme Court En Banc approved the E-Notarization Rules and the Guidelines on the Accreditation of Electronic Notarization Facility Providers (Accreditation Guidelines). These rules introduce Electronic Notaries Public (ENPs), who are authorized to perform notarial acts for individuals located anywhere in the Philippines and, in certain cases, even abroad.

This expanded jurisdiction addresses a key limitation of the 2004 Rules on Notarial Practice (2004 Notarial Rules), where traditional notaries public were restricted to performing notarizations only within their territorial jurisdiction. By allowing ENPs to provide services across the country, the new rules ensure greater accessibility, particularly for those in remote or underserved areas.

The updated framework enables 3 forms of electronic notarization:
- In-Person Electronic Notarization (both principals and witnesses must be physically present)
- Remote Electronic Notarization (principals and witnesses may connect virtually to ENP via videoconferencing)
- Mixed In-Person and Remote

To enhance security, the E-Notarization Rules implements Multi-Factor Authentication (MFA) such as facial recognition, biometrics, and one-time passwords, in compliance with regulations set by the Bangko Sentral ng Pilipinas. The integrity of the electronic notarial book, or the register showing the chronological record of electronic notarial acts, is also safeguarded against tampering. Additionally, all data stored in the ENFs are protected under the Data Privacy Act.

The E-Notarization Rules applies exclusively to electronic documents in Portable Document Format (PDF) or Portable Document Format Archival (PDF/A). Paper documents with handwritten signatures, notarial wills, and depositions will continue to follow the 2004 Notarial Rules.

A part of the Strategic Plan for Judicial Innovations 2022-2027 (SPJI), this initiative aligns with the Supreme Court’s commitment to innovation and expanded access to justice by allowing notarization for electronic documents, including remote notarization through accredited software applications. This reform supplements the traditional mode of notarization under the 2004 Notarial Rules and marks a key milestone in the Court’s ongoing digital transformation.

The E-Notarization Rules takes effect 15 days after its publication on March 9, 2025.

Read the press release in full at https://tinyurl.com/5e9e7h4a.

Read the full text of A.M. No. 24-10-14-SC, Rules on Electronic Notarization, at https://tinyurl.com/55zvmbrf.

Copying of this content is subject to the SC PIO’s Credit Attribution Policy: https://sc.judiciary.gov.ph/credit-attribution-policy/.

25/02/2025

Do you know that there is a new name for illegitimate children?

Yes! They are now called “non-marital children”, to veer away from the stigma of being called illegitimate.

Under the 2023 Amendments to Republic Act No. 9255, non-marital children born after August 3, 1988 onwards may now use the surname of their fathers without going to court. Prior to 2023, the coverage of RA 9255 limits only to births that happened on or after March 14, 2004.

This means that the process can now be done administratively through a petition/application with Local Civil Registrar that has jurisdiction over the birthplace of the child.

Hope this helps.

22/12/2024