Donor’s Tax on Real Property in the Philippines: Giving a House or Condo to Family

Donating a house, lot, or condo to a family member in the Philippines triggers donor’s tax at a flat 6% on the value of the gift above a ₱250,000 exemption for the calendar year, and the return is due within 30 days of the donation. The tax is separate from documentary stamp tax and local transfer tax, it applies regardless of whether the recipient is a child, a sibling, or a stranger, and it is paid by the donor — not the person receiving the property (BIR Form 1800 Guidelines, Bureau of Internal Revenue). Families who assume that “keeping it in the family” makes a property gift tax-free, or that a nominal “sale” for ₱1 sidesteps the tax, are two of the most common ways a well-intentioned transfer turns into a BIR assessment years later.

Decision Snapshot

• What it is: A flat 6% national tax on the value of real property (or any property) given away without payment, in excess of a ₱250,000 annual exemption per donor, under Section 99 of the Tax Code as amended by the TRAIN Law.
• Where to file: BIR Form 1800, at the Revenue District Office with jurisdiction over the donor, within 30 days of the notarized Deed of Donation — confirm the specific RDO with the BIR before filing.
• The key qualifying detail: The ₱250,000 exemption is cumulative for all gifts a donor makes in the same calendar year, not a separate allowance per gift or per recipient — a second donation in the same year is taxed on top of the first.
• The main rule: The taxable “net gift” is the property’s fair market value (the higher of the BIR zonal value or the assessor’s fair market value) minus any mortgage or encumbrance the donee formally assumes — not simply the value stated in the deed.
• An important caveat: A separate, currently-expired estate tax amnesty may be extended to December 31, 2028 under a bill the Department of Finance has publicly endorsed (as of this writing, still pending in Congress) — a live consideration for families weighing whether to donate a property now or let it eventually pass through inheritance.
• Next step: Get a current zonal valuation and tax declaration for the property, have a lawyer draft and notarize the Deed of Donation, file BIR Form 1800 and pay within 30 days, then secure the eCAR before registering the new title.

What Is Donor’s Tax and When Does It Apply to a Property Gift?

Donor’s tax is a national tax imposed “on the transfer by any person, resident or nonresident, of the property by gift” — a transfer made gratuitously, out of liberality, with nothing of equivalent value expected in return (BIR Form 1800 Guidelines; Tax Code, Sec. 98). For real property, the trigger is the execution of a Deed of Donation — the Civil Code requires the donation of immovable property to be made in a public instrument specifying the property and any charges the donee must assume, with the donee’s acceptance also made in writing during the donor’s lifetime, or the donation is void. Our companion guide on the Deed of Donation vs Deed of Sale covers those formal requirements and how a donation differs legally from a sale.

Since the TRAIN Law (Republic Act No. 10963) took effect in 2018, donor’s tax uses a single flat rate regardless of who receives the gift. Before TRAIN, the old law taxed gifts on a graduated schedule that also depended on whether the donee was a “stranger” (someone outside a defined list of close relatives), with strangers taxed at a flat 30%. That relationship-based distinction is gone: a gift to a child, a sibling, a friend, or an unrelated party is now taxed identically at 6% of the net gift over ₱250,000 a year.

How Donor’s Tax on Real Property Is Computed

The computation starts with the same valuation rule used throughout Philippine property taxation: the property’s fair market value for donor’s tax purposes is the higher of the BIR zonal value for the location or the local assessor’s fair market value on the tax declaration — not whatever nominal value the deed states, if any. From that gross gift, allowable deductions (covered below) are subtracted to arrive at the “net gift,” and the ₱250,000 annual exemption is subtracted from the year’s cumulative net gifts before the 6% rate is applied (BIR Form 1800 Guidelines).

In formula form: Donor’s tax due = 6% × (cumulative net gifts for the calendar year − ₱250,000). If a donor has made no other gifts that year, a single property donation with a ₱3,000,000 fair market value and no deductions produces a net gift of ₱3,000,000, taxed at 6% of (₱3,000,000 − ₱250,000) = 6% × ₱2,750,000 = ₱165,000. Documentary stamp tax of 1.5% of the same fair market value (see our Documentary Stamp Tax guide) and local transfer tax apply on top of donor’s tax, since a donation is one of the transfer modes covered by both.

The ₱250,000 Exemption Is Per Donor, Per Year — Not Per Gift

A detail families frequently get wrong: the exemption is not ₱250,000 per property, per recipient, or per Deed of Donation. It is ₱250,000 total, per donor, for all gifts made within the same calendar year. If a parent donates a condo to one child in March and a separate lot to another child in October of the same year, the two gifts are added together, the ₱250,000 exemption is applied once to the combined total, and the tax is computed on the cumulative net gift — not calculated separately for each donation as if each got its own exemption.

Because each later gift in the same year is taxed on a cumulative, not a standalone, basis, a family planning to give more than one property to more than one relative within the same year should compute the combined exposure in advance rather than treating each transfer as independently exempt up to ₱250,000.

Deductions That Reduce the Taxable Gift

Not every peso of a property’s fair market value is necessarily taxed as a gift. Two deductions matter most for a family property transfer:

• Mortgage or encumbrance assumed by the donee. If the property carries an existing mortgage and the recipient formally assumes that debt as part of the donation, the net gift is reduced by the outstanding balance assumed — the donor is treated as having given only their equity in the property, not its full value.
• Diminutions specifically provided by the donor. If the donor imposes a condition or burden on the donee that reduces the practical value of the gift (for example, requiring the donee to support another family member from the property), that diminution can likewise reduce the taxable value, subject to how the specific condition is structured and valued.

These deductions are narrower than they might sound, and the BIR examines them closely on a One-Time Transaction (ONETT) review. A donor considering either should have the deed’s specific wording reviewed by a lawyer or accountant before filing, since a poorly drafted assumption-of-mortgage clause can be disregarded for tax purposes even if the parties privately understood the debt was transferred.

Which Gifts Are Fully Exempt From Donor’s Tax?

A narrow set of transfers escape donor’s tax entirely rather than merely qualifying for the ₱250,000 exemption. Under Section 101 of the Tax Code, exempt gifts include donations to the national government or any of its agencies and political subdivisions, and donations to educational, charitable, religious, cultural, or social welfare institutions, non-government organizations, and research institutions that are accredited as donee institutions — provided no more than 30% of the gift is used for administrative purposes. These exemptions are aimed at institutional and charitable giving; they do not create a special carve-out for gifts between family members, which remain subject to the standard 6%/₱250,000 framework regardless of the relationship between donor and donee.

Donor’s Tax vs Capital Gains Tax vs Estate Tax: Which Applies When

Families choosing how to move a property to the next generation often confuse these three taxes because they share the same valuation method and a similar 6% headline rate. The trigger for each is different:

Donating a property now and letting an heir eventually inherit it later are not simply two paths to the same destination with different labels. A lifetime donation is taxed once, at the time of the gift, at values current then; an inheritance is taxed once, at the time of death, at values current then — and in the meantime, a donated property may also expose the donee to capital gains tax later if they resell it, computed against their own (often lower) acquisition cost basis. Because the two routes interact with legitime, collation, and future resale differently, the choice is rarely just about which tax rate looks smaller today; see our guide on the inheritance of property in the Philippines for how the succession route works.

When Spouses Jointly Own the Property: Splitting the Gift

Donor’s tax is computed per donor, which creates a genuine planning consideration for a married couple gifting a conjugal or community property to a child. Because each spouse is legally a co-owner of their respective share, a donation of the couple’s jointly owned house can be structured so that each spouse donates their own undivided share, with each spouse computing their own ₱250,000 exemption and their own 6% tax on their half of the property’s value — rather than one spouse being treated as donating the entire value alone. Whether this materially reduces the household’s total tax bill depends on the property’s value and whether either spouse has made other gifts that year, so this is a computation worth running with an accountant using the property’s actual fair market value before deciding how to structure the deed.

Filing Process: BIR Form 1800, Requirements, and the eCAR

Filing and paying donor’s tax follows the BIR’s standard One-Time Transaction (ONETT) process for property transfers, and produces the same eCAR that a sale would require before the Registry of Deeds will issue a new title:

1. Notarize the Deed of Donation. The deed must specify the property, its value, and any conditions or encumbrances, with the donee’s written acceptance included or executed as a separate public document during the donor’s lifetime.
2. Gather the documentary requirements. At minimum: the TIN of the donor and donee, the notarized Deed of Donation, a certified true copy of the current tax declaration for the land and any improvement, the owner’s duplicate title (or a certified true copy of the TCT/CCT/OCT), proof of the donee’s relationship to the donor where relevant, and a sworn declaration of no improvement (or a certificate of no improvement from the assessor) if applicable.
3. File BIR Form 1800 within 30 days of the donation at the Revenue District Office with jurisdiction over the donor, and pay the computed donor’s tax through an authorized agent bank or the BIR’s electronic payment channels.
4. File and pay documentary stamp tax on the same transaction, and settle the local transfer tax with the city or provincial treasurer within the separate 60-day deadline that local tax imposes.
5. Secure the eCAR from the BIR once the return and full documentary requirements are validated as complete — see our eCAR guide for what the certificate confirms and typical processing considerations.
6. Register the deed with the Registry of Deeds to cancel the old title and issue a new one in the donee’s name, then apply for a new tax declaration at the Assessor’s Office once the new title is released.

A 2026 BIR circular clarified that purely cash donations can now be filed electronically and no longer require an eCAR, since no title transfer is involved — a reminder that the eCAR and Registry of Deeds steps above are specific to donations of real property, and are not shortcuts available for a gift of cash or other non-titled assets.

2026 Update: A Pending Bill Could Extend the Separate Estate Tax Amnesty

Donor’s tax is sometimes weighed against a different, one-time relief measure: the estate tax amnesty, which let heirs settle the estates of relatives who died on or before May 31, 2022 under simplified terms. That amnesty’s availment period, last extended by Republic Act No. 11956 to June 14, 2025, has since lapsed. As of this writing, House Bill 6614 seeking to extend availment through December 31, 2028 — with proposed installment payment terms — has the Department of Finance’s public backing, but remains a pending bill in Congress, not enacted law (Department of Finance, press statement on HB 6614).

This matters for a family deciding whether to donate a property now rather than let it eventually pass by inheritance: the two options are governed by entirely different tax regimes (donor’s tax now, versus estate tax and, potentially, a future amnesty window later), and a bill that has not passed cannot be relied on when making a present decision. Families with an old, unsettled estate should not delay indefinitely on the assumption an amnesty extension is guaranteed; those specifically weighing a lifetime donation against inheritance should treat the amnesty’s status as unsettled and confirm current law with the BIR or a tax professional before choosing a path.

Worked Example: Parents Giving a Family Home to Their Child

The figures below are hypothetical and illustrative only — not a real transaction, and not tax or legal advice.

• Facts: A married couple jointly owns a house-and-lot with a ₱3,200,000 fair market value (the higher of zonal value and the assessor’s value) and wants to donate it outright to their only child this year, with no other gifts made by either spouse.
• Option A — One spouse donates the entire property alone: Net gift = ₱3,200,000 − ₱250,000 = ₱2,950,000. Donor’s tax = 6% × ₱2,950,000 = ₱177,000.
• Option B — Both spouses each donate their own undivided half: Each spouse’s gift = ₱1,600,000. Each spouse’s net gift = ₱1,600,000 − ₱250,000 = ₱1,350,000. Each spouse’s donor’s tax = 6% × ₱1,350,000 = ₱81,000. Combined donor’s tax for both spouses = ₱162,000.
• Either way: Documentary stamp tax of 1.5% × ₱3,200,000 = ₱48,000 and local transfer tax (up to 0.5%–0.75% depending on the LGU) apply on top, regardless of how the donor’s tax itself is structured.

In this illustration, structuring the donation as two separate half-shares from each spouse produces a lower combined donor’s tax than a single spouse donating the whole property, purely because each spouse’s own ₱250,000 exemption is used once. The actual benefit depends on the property’s value and each spouse’s other gifts that year, so this is a computation to run with an accountant against the property’s real appraised or zonal value, not a rule to apply automatically to every case.

What to Verify Before You Rely on This

• Confirm the property’s current fair market value — zonal value and assessor’s value — with the Revenue District Office, since RA 12001’s valuation reform is still rolling out LGU by LGU through 2026.
• Confirm the exact RDO for filing and current documentary checklist with the BIR before assembling your submission, since requirements can be updated by revenue issuance.
• Have an accountant verify any claimed deduction (assumed mortgage, imposed diminution) before filing, since these are examined closely and can be disallowed if poorly documented.
• Check whether other gifts have been made in the same calendar year by the same donor, since donor’s tax is computed cumulatively and not per transaction.
• Track the status of HB 6614 if an estate tax amnesty extension is relevant to your family’s decision — it remains a pending bill, not current law, as of this writing.
• Have the specific Deed of Donation drafted or reviewed by a lawyer, and have an accountant confirm the final computation, current rates, and filing deadlines with the BIR before signing and paying.

Frequently Asked Questions

Does giving property to a child instead of a stranger reduce the donor’s tax rate?

No. Since the TRAIN Law took effect in 2018, the relationship between donor and donee no longer affects the rate. A flat 6% applies to net gifts over ₱250,000 a year regardless of whether the recipient is a child, another relative, or an unrelated person.

Is the ₱250,000 exemption available every time I make a gift?

No. It is a single annual exemption per donor, applied to the cumulative total of all gifts that donor makes during the calendar year — not a fresh exemption for each separate gift or recipient.

Who pays donor’s tax — the person giving the property or the person receiving it?

The donor is legally liable for donor’s tax, since it is imposed on the act of giving. The donee does not owe donor’s tax on the receipt of the gift, though the parties may privately agree on who ultimately shoulders the cost.

Does a donated property still need documentary stamp tax and local transfer tax paid?

Yes. Both documentary stamp tax (1.5% of the tax base) and local transfer tax apply to a donation of real property, in addition to donor’s tax — they are separate charges collected by different offices (the BIR for the first two, the local treasurer for transfer tax).

Can donating a mortgaged property reduce the donor’s tax owed?

Potentially. If the donee formally assumes an existing mortgage on the property as part of the donation, the outstanding balance assumed can be deducted from the gift’s fair market value before computing the tax, since the donor is effectively giving only their equity. The specific deed language matters, so have this reviewed before filing.

Is it better to donate property now or leave it as inheritance later?

There is no single correct answer. A lifetime donation is taxed once at today’s values and may later expose the recipient to capital gains tax on a lower cost basis if they resell; an inheritance is taxed once at values on the date of death and interacts differently with legitime and collation among heirs. The right choice depends on family circumstances, the property’s likely future value, and whether other heirs exist — a decision worth making with a lawyer or accountant rather than defaulting to whichever tax currently looks smaller.

What happens if donor’s tax is filed late?

Late filing or payment beyond the 30-day deadline generally exposes the donor to surcharges, interest, and possible compromise penalties under the Tax Code’s general rules on late-filed returns, in addition to the base donor’s tax due. Confirm the current penalty computation with the BIR if a filing deadline has already passed.

What to Do Next

Start by getting the property’s current zonal value and tax declaration so you know the real tax base, not an assumed one. Decide, with an accountant, whether a single donor or a split donation between spouses produces a better outcome given the property’s value and any other gifts made that year. Have a lawyer draft or review the notarized Deed of Donation, file BIR Form 1800 and pay within 30 days, settle documentary stamp tax and local transfer tax on their own deadlines, and only then proceed to the eCAR and Registry of Deeds steps to complete the transfer into the donee’s name.

Figures in this article reflect published BIR guidance as of September 19, 2026, including the 6% donor’s tax rate with the ₱250,000 annual exemption established by the TRAIN Law (RA 10963), and the status of House Bill 6614 as a pending, DOF-endorsed proposal that had not yet been enacted as of this writing. Property valuation rules are actively transitioning under RA 12001, and tax rates, exemptions, deductions, and the status of any pending legislation can change. This article is general information, not legal or tax advice — always confirm current rules with the BIR and have your specific deed reviewed by a licensed Philippine lawyer or accountant before relying on it for a transaction.