Philippine Estate Tax Calculator

When someone passes away, the heirs are often braced for the old horror stories of estate tax eating a huge slice of the inheritance. The TRAIN Law (RA 10963) ended that. Estate tax is now a flat 6%, replacing the old schedule that climbed up to 20%. But the rate was never the hard part. What determines your actual bill is the net estate, and that is where the deductions do all the work most people overlook.

The 6% is charged on the net estate, not the gross

The 6% does not apply to the total value of everything the deceased owned. It applies to the net estate, which is the gross estate minus a stack of allowable deductions. Get the deductions right and a sizeable estate can owe surprisingly little.

The two that move the needle most under TRAIN are the standard deduction and the family home. Every estate gets a flat ₱5,000,000 standard deduction with no documentation required, simply for being an estate. On top of that, the family home is deductible up to ₱10,000,000 of its value. Stack those and the first ₱15,000,000 of a typical estate built around the family house can be wiped out before the 6% even applies.

Work a concrete case. Say the gross estate is ₱18,000,000, of which the family home is worth ₱9,000,000. You subtract the ₱5,000,000 standard deduction and the ₱9,000,000 family home (it is under the ₱10M cap, so the whole value qualifies), leaving a net estate of ₱4,000,000. The tax is 6% of that, ₱240,000, on an ₱18,000,000 estate. The heirs who assumed they owed over a million are usually relieved when the deductions are applied properly.

The edge case that quietly costs heirs the most

The deductions are generous, but they do not help if the estate is never settled, and this is where families lose far more than the tax itself. Estate tax is due within one year of death, and once you miss it, surcharges and interest accumulate. Worse, the property stays frozen in the deceased's name. It cannot be sold, mortgaged, or cleanly divided until the estate tax is paid and the title transferred.

I have seen families sit on a parcel of land for fifteen years because nobody wanted to deal with the paperwork, and by the time they tried, the penalties had ballooned and several heirs had themselves died, creating a second layer of estates on top of the first. The lesson is unglamorous: the cheapest estate tax is the one paid on time. If your family is sitting on untransferred property from a relative who passed years ago, check whether an estate tax amnesty window is currently open before assuming it is hopeless, because those have been extended repeatedly.

What is included in the gross estate?

Everything the deceased owned at death: real property, bank accounts, vehicles, shares of stock, business interests, and receivables. For a resident or citizen, it includes property located anywhere in the world, not just in the Philippines. Conjugal property is included at the deceased's share, since the surviving spouse's half is not part of the estate.

Can heirs withdraw from the deceased's bank account?

Yes, but the bank withholds a final 6% on the amount withdrawn, which is creditable against the estate tax. This replaced the old rule that froze accounts entirely, so heirs can access funds to actually pay the tax and settle expenses.

Is the surviving spouse's share taxed?

No. In a conjugal or community property regime, half the shared property already belongs to the surviving spouse and is excluded from the gross estate. Only the deceased's share is subject to estate tax, which is another reason the property regime of the marriage matters when computing the bill.

You can estimate the net estate and the 6% due with the estate tax calculator, and check property valuations against the zonal value calculator. The flat 6% and the deduction figures come from TRAIN; current forms and any amnesty rules are on bir.gov.ph. If a number here is off, that is on me to correct, and you can reach me through the about page.

• Estate Tax Calculator
• Donor's Tax Calculator
• Zonal Value Calculator