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Understanding the Philippine Estate Tax and Real Property Tax Amnesty Programs

How Did These Laws Come About?

The government noticed that many Filipinos were struggling with unpaid estate taxes, which was causing a huge headache for everyone. Properties were stuck in the names of deceased persons, they couldn’t be sold or transferred without a lot of work, and so the economy is slowed down by this. Plus, local governments were having a hard time collecting real property taxes as well.

So in response, they passed:

– Republic Act 11213 (Estate Tax Amnesty Law)

– Republic Act 12001 (Real Property Tax Amnesty Act)

#1 Estate Tax Amnesty

If you inherited property but haven’t paid estate taxes for deaths that occurred on or before May 31, 2022, you can now settle everything by just paying 6% of the property’s value without interest and penalties!

The sweet benefits:

– No more penalties or surcharges

– No criminal liability

– Transfer inherited property at the least cost

Important deadline:

The estate tax amnesty program runs until June 14, 2025. Yes, that’s coming up pretty soon, so you might want to get moving on this!

#2 Real Property Tax Amnesty

Did you know that despite the estate tax amnesty, you still cannot transfer the title without paying real property taxes?

The good news is that if you’ve fallen behind on your real property taxes, this program lets you settle your basic tax obligations without the crushing weight of interests, penalties, and surcharges.

The awesome perks:

– Wipe out all penalties and interest

– Be updated with real property tax payments

– Be able to sell or donate your property 

But wait!

While the law has been passed, the implementation rules and regulations (IRR) are still not out. Property owners should check with their local government units (LGUs) for the current status and specific implementing guidelines in their area.

Why You Should Act Now

1. Save money: These programs offer significant savings compared to regular tax rates and penalties.

2. Peace of mind: No more worrying about the BIR, Assessor’s office and penalties. 

3. Clear titles: Make your properties more marketable and easier to transfer.

4. Limited time: These opportunities won’t last forever!

What To Do Next?

1. For Estate Tax Amnesty:

   – Gather all documents related to the inherited property

   – Visit your nearest BIR office

   – File the required Estate Tax Amnesty Return

   – Pay the 6% amnesty tax

2. For Real Property Tax Amnesty:

   – Contact your local treasurer’s office

   – Check if they’re already implementing the program

   – Prepare your property documents

   – Compute your basic tax obligation

#3 Bonus: Local Government Tax Amnesty Initiatives

Here’s something exciting you might not know! Even while waiting for the national Real Property Tax Amnesty program’s full implementation, many local governments aren’t sitting idle. They’re taking the initiative to help property owners through their own amnesty programs!

Why are LGUs doing this?

The Bureau of Local Government Finance (BFLG) and Department of Finance (DOF) have been encouraging local governments to implement their own tax amnesty programs. This is  part of a bigger push to help property owners who are also availing of the Estate Tax Amnesty since back real property taxes also have to be paid before transfer can be effected.

What does this mean for you?

If you’re in an area where your local government has launched its own amnesty program, you might be able to:

– Clear your real property tax delinquencies NOW, without waiting for the national program

– Handle both your estate tax and real property tax issues simultaneously

– Get a fresh start with your local government

How to check if your LGU has an amnesty program:

1. Visit your local treasurer’s office

2. Check your LGU’s official website or social media pages

3. Watch out for local announcements and tax campaigns

4. Ask your barangay officials for information

Pro tip: If your LGU has its own amnesty program, consider availing of it alongside the Estate Tax Amnesty. This “two-birds-with-one-stone” approach can help you fully clean up your property tax situation!

Success Stories

Many local governments have already seen great results from their amnesty programs. Property owners are getting their documents in order, local revenues are improving, and communities are benefiting from increased tax compliance. It’s a win-win situation!

Note: Verify the current status and requirements as well as the deadlines with your local government unit or the BIR. The key is to act promptly when these opportunities become available in your area!

Pro Tips!

– Don’t wait until the last minute! Government offices can get super busy near deadlines.

– Keep copies of all your payments and documents.

– When in doubt, consult with a tax professional or visit your local BIR office.

Remember, these amnesty programs are your chance to start fresh with your property taxes. Don’t let this opportunity slip away! Have questions? Feel free to drop us a line!

We recently held our FREE webinar on the Extended Estate Tax Amnesty Law via Facebook live and through our Youtube channel.

For those who want a copy of the FREE ebook, just drop us an email at in**@js*****.com to receive it!

Until next time!

Proverbs 13:22: A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored up for the righteous.

A FREE WEBINAR on the benefits and privileges of Senior Citizens under the law!

The Estate Tax Amnesty Act Extension is OFFICIAL. RA 11569 extends the Estate Tax Amnesty until June 14, 2023. It was officially approved today (June 30) and will take effect 15 days from publication in the Official Gazette.

Implementing Rules and Regulations are to be issued but we expect them to be almost just the same as before. For those who didn’t make it, here’s your chance!

Happy Independence Day!

For the dozens of you wanting to know what’s what…

As earlier reported, Congress agreed on a version for the extension already and submitted it to the President.

Under the Constitution, the President may 1) veto (cancel) the bill or 2) certain portions of it OR 3) sign it OR 4) not do anything.

For 1, if the entire bill is vetoed, no more amnesty. Although the Dept. of Finance already expressed willingness to extend the program given the target collection in amnesty taxes for availment was not met.

For 2, this is highly unlikely since the only major provision is the extension of the program PLUS the removal of the Deed of Extrajudicial Settlement/Decision as a requirement for payment of the taxes.

As many of you and our clients have experienced, it is hard to get papers going around this pandemic. So if ever, the President may veto that portion and hopefully approve the rest.

For 3 and 4, same effect. If he signs it, it becomes law. If he doesn’t do anything, it passes into law 30 days after submission to him anyway.

So what now?

We wait.

Since Congress submitted it late May, the bill has 30 days to lapse into law. Meanwhile, it is likely that after June 14, there will be a period of limbo where the bill will go either into passage around end of June and heaven for those wishing to avail…

or the other place for those who did not or could not avail. :’(

We will keep you posted until then, but meanwhile, why don’t you share your thoughts with us?

Here is the Constitutional provision btw for reference:

Section 27, Article VI of the 1987 Constitution which reads as follows:

Section 27.

(1) Every bill passed by the Congress shall, before it becomes a law, be presented to the President. If he approves the same he shall sign it; otherwise, he shall veto it and return the same with his objections to the House where it originated, which shall enter the objections at large in its Journal and proceed to reconsider it. If, after such reconsideration, two-thirds of all the Members of such House shall agree to pass the bill, it shall be sent, together with the objections, to the other House by which it shall likewise be reconsidered, and if approved by two-thirds of all the Members of that House, it shall become a law. In all such cases, the votes of each House shall be determined by yeas or nays, and the names of the Members voting for or against shall be entered in its Journal. The President shall communicate his veto of any bill to the House where it originated within thirty days after the date of receipt thereof, otherwise, it shall become a law as if he had signed it.

(2) The President shall have the power to veto any particular item or items in an appropriation, revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.

Should it be extended, we will again open our doors for your estate tax amnesty concerns. Thanks and God bless!