Philippines Estate Tax Guide for Foreigners (2026)

Philippines has an estate tax — a tax on the right to inherit property when someone dies. If you own a condominium in Manila, a house in Cebu, or shares in Philippine companies, your heirs will deal with the Bureau of Internal Revenue (BIR) before they can legally keep anything. The rules are simpler than most countries: a flat 6% rate, a few deductions, and a one-year deadline. This guide explains what foreigners need to know in 2026.

What estate tax is and who pays it

Estate tax is not a tax on the heirs' income. It is a transfer tax on the privilege of transmitting a deceased person's property to their heirs. In the Philippines it is governed by the National Internal Revenue Code, as amended by the TRAIN Law (Republic Act 10963) in 2018.

The person legally responsible is the executor or administrator of the estate. If none was appointed, any heir can — and effectively must — file. Heirs are jointly liable, and the BIR will not retitle any property until the tax is settled.

Scope: what a foreigner's estate includes

The scope depends on the deceased's residence status:

• Non-resident foreigner (lived abroad): only Philippine-situs property is taxable — real estate located in the Philippines, tangible property physically there (vehicles, valuables), and shares in Philippine companies.
• Resident foreigner (lived in the Philippines): worldwide assets can enter the gross estate.

For most expats reading this, the relevant case is a non-resident who owns Philippine property, so only the local assets count.

The flat 6% rate under the TRAIN Law

Since 1 January 2018, estate tax is a flat 6% of the net taxable estate. Before TRAIN, rates ranged from 5% to 20% on a graduated table — those only apply to deaths before 2018. There is no exemption threshold for the rate itself; even small estates file BIR Form 1801 to get the certificate needed to transfer assets.

Deductions — and the non-resident limitation

For resident decedents the standard deduction is a generous ₱5,000,000, plus a family-home deduction up to ₱10,000,000 and certain expense deductions. For non-resident aliens the rules are less favourable, and this is the part many guides get wrong:

• The standard deduction is smaller for non-resident aliens under the Tax Code. The commonly cited figure is ₱500,000 — verify with a Philippine tax professional before relying on any number.
• Deductions other than debts attached to the Philippine property are generally prorated: multiplied by the ratio of Philippine-situs assets to the worldwide gross estate.
• The family-home deduction is generally not available to non-resident aliens.

Because the prorating formula and the NRA standard deduction are technical and interpretable, get the computation confirmed before filing.

Example computation (non-resident, condo in Manila)

Say a non-resident foreigner dies owning a Manila condo valued at ₱8,000,000 with no other Philippine assets and no debts. After the non-resident standard deduction (illustratively ₱500,000, pending professional confirmation) the net estate is ₱7,500,000 — and 6% is roughly ₱450,000. The same estate owned by a resident would likely owe far less thanks to the ₱5M standard deduction. Figures are illustrative; the real calculation depends on the decedent's status and documentation.

Deadline: one year from death

The estate tax return (BIR Form 1801) is due within one year of the date of death, filed at the BIR Revenue District Office with jurisdiction (for non-residents, the special handling RDO in Quezon City). Extensions can be granted by the Commissioner for meritorious cases; interest applies to late payment. Payment unlocks the eCAR (electronic Certificate Authorizing Registration) — without it, the Registry of Deeds will not transfer titles and banks will not release accounts.

Penalties for late filing

Missing the deadline triggers the standard BIR penalties: a surcharge of 25% of the tax due, interest accruing on the unpaid amount (compound annual interest under the Tax Code), and possible compromise penalties. Interest keeps running until full payment, which is why estates settled years late often owe multiples of the original tax. Installment payment (up to two years) is possible for cash-poor estates.

Testate vs intestate succession

• Testate: the deceased left a valid will. It must go through probate (court validation) before assets can be distributed. A foreign will can be probated in the Philippines but needs proper legalization/apostille and translation if not in English or Filipino.
• Intestate: no will — the Civil Code's default rules apply, with compulsory shares for legitimate children and the surviving spouse. Court proceedings (intestate settlement) take longer and cost more.

Either way, the estate tax computation is the same; only the procedure differs.

What foreigners can inherit — the property restriction

Estate tax aside, foreign heirs face a constitutional limit: foreigners cannot own land in the Philippines. A foreign heir cannot register inherited land in their own name. What foreigners CAN own:

• Condominium units (up to 40% of a building's total floor area is the foreign quota — inherited units don't count against new-purchase quotas but title must stay legal)
• Buildings (but not the land beneath)
• Shares in Philippine corporations (subject to the 40% foreign-ownership rule)

Practical outcomes for inherited land: the heir may sell it and keep the proceeds, or co-owned Philippine-national heirs retain it. This is the single most common trap for foreign heirs.

Spain–Philippines double taxation: tread carefully

Spain and the Philippines have a double-taxation convention covering income taxes (ratified 1994), but there is no inheritance-tax treaty between the two countries. Spain taxes Spanish residents on worldwide inheritance received; the Philippine estate tax is separate. Relief may exist through unilateral rules or direct foreign-tax credit provisions — this depends heavily on personal circumstances and current Spanish law. If you are a Spanish resident inheriting Philippine property (or vice versa), consult a Spanish tax adviser with cross-border experience before assuming any credit applies.

Filing checklist

• Death certificate (PSA copy)
• Decedent's identification and, if married, marriage certificate
• Proof of property: condo title (TCT/CCT), bank statements, share certificates
• Sworn statement of values / inventory of the estate
• BIR Form 1801, filed at the correct RDO
• CPA certification if required for the estate size

Related guide

This article covers the tax. The full step-by-step process — wills valid in the Philippines, probate, heirs' rights, and documents — is in our premium guide Wills & Inheritance in the Philippines for Foreigners (€6.99).

Information verified against BIR rules and the TRAIN Law as of 2026. Estate rules change; confirm current rates, deductions and treaty relief with the BIR or a licensed Philippine tax professional before acting. This article is general information, not legal or tax advice.