Below is a comprehensive overview of donating property to relatives in the Philippines, covering the key legal concepts, processes, and considerations. Note that this discussion is for general informational purposes only and does not constitute legal advice. For specific concerns, consult a qualified Philippine attorney or the appropriate government agencies.

1. Legal Basis for Donations

1.1. Definition of a Donation

Under Philippine law, a donation is an act of liberality whereby a person (the donor) disposes of a thing in favor of another (the donee), who accepts it. The donation is perfected from the moment the donor knows of the donee’s acceptance. This concept is found in the Civil Code of the Philippines (primarily in Articles 725–773).

1.2. Types of Donations

Donation Inter Vivos
- A donation inter vivos is made and intended to take effect during the donor’s lifetime.
- It requires the donor to divest himself or herself of ownership of the property while alive and deliver such ownership to the donee.
Donation Mortis Causa
- A donation mortis causa is akin to a testamentary disposition and takes effect only upon the donor’s death.
- It is generally subject to the formalities of a will, and is seldom used except in very specific estate-planning scenarios.

Most individuals donate property to relatives through a donation inter vivos, which then becomes effective during the donor’s lifetime.

2. What Can Be Donated?

A donor may donate real property (e.g., land, house and lot, condominium) or personal property (e.g., cash, vehicles, shares of stock, jewelry). Donations of real property in the Philippines must follow stricter formalities than donations of personal property.

3. Formal Requirements for Donations

3.1. Donations of Real Property

Must be made in a public instrument (i.e., a notarized deed of donation).
Acceptance must be made in the same deed of donation or in a separate public instrument, with notice to the donor if accepted in a separate instrument.
The deed should describe the property being donated, identify the donor and donee, and state the donor’s clear intention to donate.

3.2. Donations of Personal Property

If the value exceeds PHP 5,000.00, the donation must be in writing (notarial form is preferred for evidentiary and tax purposes).
The donee’s acceptance may be written directly on the same instrument or on a separate instrument.
For property under certain registration systems (e.g., motor vehicles), additional registration or transfer procedures may apply.

4. Tax Implications

4.1. Donor’s Tax

When donating property, the donor is generally subject to donor’s tax under the National Internal Revenue Code (NIRC), as amended by the TRAIN Law (Republic Act No. 10963), subject to certain exemptions or thresholds.

Tax Rates
- The current donor’s tax rate in the Philippines is a flat rate of 6% on the total value of the donation (in excess of any allowed deductions or exemptions).
Exemptions & Deductible Amounts
- Donations between spouses or to legitimate, illegitimate, or adopted children are not automatically tax-exempt; they are generally subject to the same 6% tax (minus certain allowed deductions).
- Family home considerations or minimal value donations may have specific exemptions, but these are limited; consult a tax professional or lawyer.
Filing and Payment
- The donor must file a Donor’s Tax Return (BIR Form 1800) with the Bureau of Internal Revenue (BIR) within thirty (30) days after the donation.
- The donor pays the tax to an Authorized Agent Bank (AAB) or other payment channels authorized by the BIR.

4.2. Local Taxes and Fees

Transfer tax or local transfer fees (imposed by the local government unit) may apply if real property is involved.
Registration fees for issuing new land titles, updating tax declarations, and other documentation.

5. Key Steps in Donating Real Property to a Relative

Draft the Deed of Donation
- Engage a lawyer or a qualified legal professional to prepare the deed of donation. Ensure correct details about the donor, the donee, the property description, and the intention to donate.
Secure Acceptance
- The donee or an authorized representative must accept the donation in the same document (or via a separate instrument, then notify the donor).
Notarize the Deed of Donation
- Appear before a notary public with proper identification and sign the document in the notary’s presence.
- If acceptance is in a separate document, the donee must also notarize that acceptance.
Assess and Pay Donor’s Tax
- Within 30 days from execution of the donation, the donor must file the donor’s tax return (BIR Form 1800) and pay the corresponding donor’s tax.
- Keep proof of tax payment for future reference.
Transfer of Title
- Obtain a Certificate Authorizing Registration (CAR) or eCAR from the BIR, showing that donor’s tax and applicable taxes were paid.
- Present the notarized deed of donation, the CAR/eCAR, and any other required documents (e.g., tax clearance, identification) to the Registry of Deeds for issuance of a new title in the donee’s name.
- Update the tax declaration at the local Assessor’s Office under the donee’s name.
Local Government Requirements
- Pay the transfer tax, if any, at the city or municipal treasurer’s office within the period prescribed by local ordinances.
- Obtain a new tax declaration in the donee’s name.

6. Common Issues and Points of Caution

Requirement of Acceptance
- A donation is void if the donee fails to accept it properly. For real property, acceptance must be in a public instrument.
Reserved Portions and Legitimes
- Philippine law protects compulsory heirs (spouse, children, parents), so a donation that infringes on the legitime could be reduced or invalidated. This typically arises if the donor later passes away and the donation is found to diminish the compulsory heirs’ shares.
Mortis Causa vs. Inter Vivos
- If the donation is made to take effect upon death but does not follow the formalities of a will, the donation mortis causa may be declared invalid.
Avoiding Confusion with Sale or Simulated Transactions
- A deed of donation should clearly state that there is no consideration for the transfer of property. A simulated sale or donation could be challenged by the BIR or other parties.
Deadlines for Payment of Taxes
- Noncompliance with tax obligations (donor’s tax, local transfer tax) can result in penalties, interest, and surcharges.
Document Consistency
- Ensure the name of the property owner on the title matches the donor’s name.
- Check existing encumbrances (e.g., mortgages, liens). If the property is encumbered, the mortgagee’s consent may be required.
Spousal Consent
- If the property is conjugal or part of the absolute community of property, the donor might need the spouse’s consent to donate.
Professional Assistance
- Engaging a lawyer and/or a tax professional at the start can reduce errors and speed up the donation and transfer process.

7. Frequently Asked Questions

Do I have to pay donor’s tax if I’m only giving a small gift?
- There is no donor’s tax on donations of relatively small value (generally below PHP 250,000 in aggregate per year to the same donee), but for clarity, verify the current thresholds under BIR regulations.
What if the property is co-owned by siblings or relatives?
- Each co-owner wishing to donate their share must execute a donation for their respective share. Acceptance and donor’s tax computation would then apply to each donor’s share.
Is it cheaper to donate or to sell the property to a relative for a nominal amount?
- A “sale” at a price far below market value can be treated by the BIR as a donation, triggering donor’s tax. Consult a tax professional for guidance.
Can the donor revoke the donation?
- As a general rule, donations are irrevocable once perfected. However, the Civil Code provides limited grounds for revocation (e.g., ingratitude, non-fulfillment of conditions, birth of a child when the donor had none, etc.).
How long does the transfer process take?
- The timeline varies by local Registry of Deeds and BIR offices. Typically, weeks to months, depending on the completeness of documentation and any backlogs.

8. Practical Tips

Plan Ahead
- Donations have estate-planning implications. Ensure you are not jeopardizing your financial security by transferring valuable assets prematurely.
Keep Records
- Retain copies of the deed of donation, acceptance, official receipts of donor’s tax payment, CAR/eCAR, updated title, and other relevant documents.
- Proper documentation will help avoid issues if the donation is later challenged.
Seek Professional Advice
- Consult with a Philippine-licensed lawyer for drafting, notarization, and compliance with the formal requirements.
- A tax consultant or accountant can ensure proper donor’s tax computation and timely filing.
Coordinate with Family
- Communication with relatives helps ensure they understand the process, especially if the donation is part of a broader family estate plan.

9. Conclusion

Donating property to relatives in the Philippines can be an effective way to share resources or implement an estate plan. However, compliance with the Civil Code, BIR regulations, and local government rules is critical. Key steps include properly executing the deed of donation (with notarized acceptance), filing and paying donor’s tax, and transferring title through the Registry of Deeds. Because mistakes or omissions can lead to legal complications, it is wise to consult an attorney and/or tax professional before proceeding.

Disclaimer: The discussion above is for general informational purposes and is not a substitute for professional legal advice. Philippine laws and regulations may change, and individual circumstances can vary considerably. Always consult a lawyer or qualified professional for personalized guidance on donating property.