How to Save Your Family’s Inheritance
How to Save Your Family’s Inheritance: The Proposed 2028 Tax Amnesty Extension
Facing the settlement of a loved one's estate can feel overwhelming. Many families worry about years of unpaid taxes and whether high penalties will make it impossible to transfer titles. As legislative discussions continue regarding the extension of the estate tax amnesty, staying informed is the first step toward protecting your family’s legacy.
If you are beginning to navigate the complexities of property inheritance, you may find it helpful to discuss with a legal team to help organize your records. If you wish to discuss things with our legal team, click [HERE] to schedule a discussion with our legal team.
What is the Estate Tax Amnesty Extension?
In simple terms, an estate tax amnesty is a "second chance" from the government. It allows heirs to pay unpaid estate taxes at a significantly lower rate while waiving the massive penalties and interest that usually accumulate over time.
This matters because many Filipino families struggle to sell or develop inherited land because the "papers" aren't in their name often due to the high cost of unsettled taxes.
The Latest Update from Congress
The House of Representatives’ committee on ways and means recently approved a proposal to push the deadlines even further:
Proposed New Deadline: The committee is pushing to extend the period to avail of the amnesty until December 31, 2028.
Expanded Coverage: The proposal aims to include the estates of those who died on or before December 31, 2024.
Current Status: While the Department of Finance (DOF) initially suggested a shorter extension to June 2028, both the executive and legislative branches agree that an extension is necessary to help families recover from pandemic-related delays.
Step-by-Step: How the Amnesty Process Works
Settling an estate doesn't have to be a "fear of the unknown." Here is the general process:
Gather Records: Identify all properties left by the decedent (the person who passed away).
File the Amnesty Return: Instead of the regular, complex tax filing, you file a specific "Estate Tax Amnesty Return".
Pay the Amnesty Tax: You pay a fixed percentage (usually 6%) of the net undeclared estate, without the usual 25-50% surcharges.
Receive the Certificate: Once cleared, the BIR issues a "Certificate Authorizing Registration" (CAR), which is the key to transferring the title to the heirs.
Key Mistakes to Avoid
Waiting until the last minute: As Rep. Miro Quimbo noted, prolonging the filing only delays your ability to fully own and use the property.
Assuming it's only for old cases: The new proposal expands the date to include deaths occurring as recently as December 2024.
Missing local requirements: Estate settlement often requires coordination with local registries in places like Quezon City or Manila.
For those interested in a deeper look at the legal requirements for different types of assets, you may find it helpful to discuss with a legal team to help organize your records. If you wish to discuss things with our legal team, click [HERE] to schedule a discussion with our legal team.
Practical Action Steps: What You Can Do Today
You don't have to wait for the final law to be signed to start preparing. As Rep. Miro Quimbo noted, prolonging the filing only delays your ability to fully own and use the property.
Key Documents to Gather
Death Certificate: To establish the date of death (crucial for determining if you fall under the 2024 cutoff).
Land Titles (TCT/OCT): To prove ownership of real estate.
Tax Declarations: Available at your local Assessor’s Office.
When Professional Guidance is Useful
While the amnesty is designed to be simpler, certain situations benefit from a review of the facts:
There is a disagreement among heirs on how to split the property.
The original land titles are lost or missing.
The estate involves complex business holdings or assets in multiple regions.
Frequently Asked Questions (FAQ)
How long does the process typically take? While the amnesty period may last until 2028, individual processing at the BIR can take several months depending on the completeness of your documents.
Do I really need a lawyer for this? While the amnesty aims to simplify the process, a lawyer is essential to ensure every legal formality is properly executed to avoid future title disputes. Beyond notarizing "Extrajudicial Settlements," legal counsel provides the necessary expertise to identify all rightful heirs, interpret complex family histories, and correctly value diverse assets. Their assistance ensures the process is done right the first time, protecting the estate from potential nullification or claims from excluded parties.
What happens if I miss the 2028 deadline? If the extension expires, you may be forced to pay the full tax rate plus years of accumulated interest and penalties, which can sometimes exceed the value of the property itself.
Take Control of Your Inheritance
The proposed extension to December 31, 2028, is a significant opportunity for Filipino taxpayers. It removes the "process anxiety" that has kept many families in legal limbo for decades. You now have a clear window to clear your titles and secure your family's future.
Navigating tax laws can be complex, and every family's situation is unique. If you have questions about how these upcoming changes apply to your specific inheritance, you may find it helpful to discuss with a legal team to help you. If you wish to discuss things with our legal team, click [HERE] to schedule a discussion with our legal team.
