Disclaimer: The information provided herein is for general informational and educational purposes only and does not constitute legal advice. Laws and regulations may change over time and can vary based on specific circumstances. For advice tailored to your particular situation, consult a qualified attorney or tax professional.

I. Introduction

In the Philippines, estate tax is a national tax imposed on the right of the decedent (the deceased person) to transmit their estate to lawful heirs and beneficiaries at the time of death. This tax is governed primarily by the National Internal Revenue Code (NIRC) as amended, most recently in significant ways by the Tax Reform for Acceleration and Inclusion (TRAIN) Law (Republic Act No. 10963). While it is a national tax administered by the Bureau of Internal Revenue (BIR), the location of the real property—such as in Quezon City—can affect certain valuation methods (e.g., the Fair Market Value vs. Zonal Value) as well as some local documentary requirements.

This article covers the essential aspects of estate tax calculation for real property in Quezon City, including legal bases, valuation of properties, filing requirements, deadlines, and practical steps to ensure compliance.

II. Legal Basis for Estate Tax in the Philippines

National Internal Revenue Code (NIRC) – The overarching statute that outlines the imposition of estate tax, calculation details, allowable deductions, and filing procedures.
TRAIN Law (RA 10963) – Enacted in 2018, the TRAIN Law introduced a flat estate tax rate of 6% on the net estate, simplifying the previously graduated rates.
BIR Regulations and Revenue Memorandum Orders – The Bureau of Internal Revenue regularly issues regulations, revenue memorandum circulars (RMCs), and orders that provide clarification on compliance requirements, including documentary submissions, deadlines, and valuation references.

Because estate tax is a national tax, Quezon City government (being a local government unit) does not impose or regulate estate tax rates. However, Quezon City’s assessed values and Zonal Values within its jurisdiction are used as references for the property’s valuation.

III. Understanding Key Concepts in Estate Tax

Gross Estate
The gross estate includes all the properties, rights, and interests of the decedent at the time of death. For real property situated in Quezon City, the primary valuation references are:
- Zonal Value published by the BIR for specific areas/barangays in Quezon City; or
- Fair Market Value (FMV) as shown in the local Assessor’s schedule of values (i.e., Quezon City’s tax declaration).
Whichever is higher (the Zonal Value or the Assessor’s Fair Market Value) must be used as the basis for calculating the value of the property.
Allowable Deductions
The net estate is determined by deducting certain allowable expenses, losses, and standard deductions from the gross estate. Under the TRAIN Law, common deductions include:
- Standard deduction of ₱5,000,000 for a resident decedent.
- Claims against the estate (valid debts the decedent owed at the time of death).
- Funeral expenses (if not using the standard deduction or if incurred prior to the TRAIN Law transition, but under TRAIN a simplified approach is often used).
- Unpaid mortgages related to real property (provided the amounts were contracted bona fide and the corresponding property or debt is properly reported).
- Medical expenses, subject to certain limits for deaths before the TRAIN Law took effect (not typically separated anymore under TRAIN because of the new Standard Deduction mechanism).
- Vanishing deductions for properties previously subjected to donor’s or estate tax within five years.
Always refer to the latest BIR guidelines for the full list of applicable deductions.
Flat Rate
Since the TRAIN Law took effect, the estate tax rate has been simplified to a flat 6% of the net estate.
Net Estate
[ \text{Net Estate} = \text{Gross Estate} - \text{Allowable Deductions} ]
Estate Tax Due
[ \text{Estate Tax Due} = 6% \times \text{(Net Estate)} ]

IV. Valuation of Real Property in Quezon City

Zonal Value vs. Assessed/Fair Market Value
- The BIR periodically publishes Zonal Values per city, which serve as one reference for property valuation.
- The Quezon City Assessor’s Office maintains a schedule of values for local taxation (commonly reflected on a property’s Tax Declaration).
When computing the real property’s value for estate tax purposes, you must compare the Zonal Value and the Assessor’s Fair Market Value and choose the higher of the two.
Documents to Obtain
- Certified True Copy of the Transfer Certificate of Title (TCT) for land (or Condominium Certificate of Title [CCT] for condo units).
- Certified True Copy of the latest Tax Declaration for land and improvements, issued by the Quezon City Assessor’s Office.
- Zonal Value Certification (optional but advisable for clarity) from the BIR’s Revenue District Office (RDO) with jurisdiction over the property’s location. (In Quezon City, multiple RDOs handle different barangays, so identify the correct one.)

V. Filing Requirements and Process

Who Must File
- The executor, administrator, or the legal heirs if no executor or administrator is appointed.
- Any authorized representative on behalf of the heirs or the estate.
Where to File
- The estate tax return (BIR Form 1801) is typically filed at the Revenue District Office (RDO) where the decedent resided at the time of death.
- If the decedent was residing outside the Philippines, the return is filed in the RDO where the estate is administered or where the property is located.
- For real property specifically located in Quezon City but the decedent resided elsewhere, coordinate with the BIR to confirm the correct RDO to file the estate tax return. Generally, it would still be the RDO of the decedent’s place of residence, but documents relating to Quezon City property valuations will be obtained from the BIR RDO or Quezon City Assessor’s Office that covers that location.
When to File
- The estate tax return must be filed within one (1) year from the date of the decedent’s death.
- An extension of up to thirty (30) days may be granted by the BIR Commissioner in meritorious cases. Longer extensions might be requested but require strong justification and possible partial payments.
Documents Needed
Typical requirements include:
- BIR Form 1801 (Estate Tax Return)
- Death Certificate (Certified by the Philippine Statistics Authority or the Local Civil Registrar)
- TIN (Tax Identification Number) of the Estate (and of the heirs, if applicable)
- Affidavit of Self-Adjudication or Extra-Judicial Settlement (if applicable)
- Deed of Extra-Judicial Settlement (notarized) or Court Order if judicially settled
- Certified True Copies of the Transfer Certificates of Title (TCT)/Condominium Certificates of Title (CCT)
- Certified True Copies of the latest Tax Declarations for land and improvements
- Proof of settlement of any outstanding loans/mortgages (if claiming a deduction for mortgage or claims against the estate)
- Valid identification of the filer/heirs/administrator
- Any other documents required by the BIR depending on the complexity of the estate (e.g., bank certificates, etc.).
Payment of the Estate Tax
- Payment can be done at the Authorized Agent Bank (AAB) within the RDO’s jurisdiction.
- In places without AABs, payment may be made at the RDO cashier or via online payment channels (as allowed by the BIR).
Issuance of Electronic Certificate Authorizing Registration (eCAR)
- Once the estate tax due is fully paid (and the BIR is satisfied with all documentation), the BIR issues an eCAR.
- The eCAR is essential to transfer the title of the property in Quezon City from the decedent to the heirs or new owners.
- Present the eCAR to the Quezon City Registry of Deeds to update the TCT/CCT, and then to the Quezon City Assessor’s Office to update the tax declaration under the new owner’s name.

VI. Calculation Example (Hypothetical)

Suppose the decedent owned a residential lot in Quezon City with:

Zonal Value per square meter = ₱20,000
Fair Market Value (per Tax Declaration) = ₱18,000 per square meter
Lot area = 200 square meters

Determine the Higher Value per m²:
- Zonal Value = ₱20,000 (higher than ₱18,000)
- Use ₱20,000/m².
Compute Gross Value of Land:
[ 200 , \text{sq. m.} \times ₱20,000 = ₱4,000,000 ]
Add Any Other Assets (e.g., improvements, bank accounts, personal property, if included in the estate). Suppose there is a residential building on the lot valued (per Tax Declaration) at ₱2,000,000, and bank accounts worth ₱1,000,000.
[ \text{Total Gross Estate} = ₱4,000,000 + ₱2,000,000 + ₱1,000,000 = ₱7,000,000 ]
Subtract Allowable Deductions. Assume:
- Standard Deduction = ₱5,000,000
  [ \text{Net Estate} = ₱7,000,000 - ₱5,000,000 = ₱2,000,000 ]
Compute the 6% Estate Tax:
[ \text{Estate Tax Due} = 6% \times ₱2,000,000 = ₱120,000 ]

This hypothetical scenario shows how to apply the rules. Real-life cases often involve additional assets, liabilities, or conditions affecting deductions.

VII. Deadlines, Penalties, and Surcharges

Deadline
Estate tax must be filed and paid within one (1) year from the date of death.
Penalties for Late Filing
- Surcharge of 25% (or 50% in cases of willful neglect) on the tax due if not filed and paid on time.
- Interest at the prevailing rate (12% per annum subject to recent changes in legal interest rates) applied from the date of the deadline until full payment.
Installment Payment or Extension
- In meritorious cases, the BIR Commissioner may allow the estate tax to be paid by installment.
- Delays without approved extension result in interest and surcharges.

VIII. Estate Tax Amnesty (If Applicable)

The Philippine government has, at times, offered Estate Tax Amnesty to encourage taxpayers to settle outstanding estate taxes.
As of the latest regulations, the Estate Tax Amnesty under RA 11213, extended by RA 11569 and further extended by RA 11956, may cover deaths that occurred on or before specific cut-off dates.
If you are dealing with older, unsettled estates, verify if amnesty provisions still apply. This can significantly reduce penalties and interest.

IX. Local Taxes and Other Fees in Quezon City

While estate tax is national in scope, you will also encounter local fees in Quezon City for the transfer of property titles:

Transfer Tax – This is a local tax imposed by Quezon City government for the transfer of real property located within its jurisdiction (different from the national estate tax). The rate is usually up to 50% of 1% of the property’s value but verify the current rates at the Quezon City Treasurer’s Office.
Registration Fees – Payable to the Registry of Deeds for the issuance of the new title.
Documentary Stamp Tax (DST) – A national tax that may apply upon transfer of property title. For estate settlements, certain DST rates apply based on the BIR’s rules.
Real Property Tax (RPT) – An annual local tax paid to the Quezon City government. This is not part of the estate tax but must be updated once the property’s ownership is transferred.

X. Practical Steps Summary

Obtain Required Documents:
- Death certificate, titles, tax declarations, etc.
Secure Valuation:
- Determine the Zonal Value and the Assessed (FMV) value from Quezon City documents; choose the higher value.
Compute the Gross Estate:
- Add up all properties, both real and personal, belonging to the decedent.
Determine Allowable Deductions:
- Standard deduction, claims against the estate, etc.
Calculate Estate Tax Due:
[ \text{Estate Tax} = 6% \times \text{(Net Estate)} ]
File BIR Form 1801 and submit supporting documents at the appropriate RDO.
Pay the Estate Tax at an Authorized Agent Bank or BIR office.
Obtain eCAR once payment and documentation are cleared.
Process Transfer of Title at the Registry of Deeds in Quezon City.
Update the Tax Declaration at the Quezon City Assessor’s Office to reflect the new owner’s name.

XI. Common Challenges and Tips

Identifying the Correct RDO
- Confusion can arise if the decedent’s residence is different from the property location. Confirm with BIR which RDO has jurisdiction to accept and process the return.
Partial or Incomplete Records
- Missing land titles, tax declarations, or bank details can delay or complicate the estate settlement. Start gathering documents early.
Multiple Heirs and Disputes
- If heirs disagree on the distribution of property or the method of settlement, the process (and the estate tax filing) can be delayed, leading to penalties. An extra-judicial settlement or court proceeding might be needed.
Timely Filing
- Even if not all documents are available, consult the BIR for possible request for extension or partial compliance to mitigate penalties.
Professional Assistance
- Employing a tax practitioner or legal counsel can be beneficial, especially for complex estates or if deadlines are approaching.

XII. Conclusion

Calculating and settling estate tax for real property in Quezon City involves a combination of national rules under the TRAIN Law and local Quezon City documentation/valuation for the property. While the estate tax rate itself is straightforward at 6% of the net estate, proper determination of the gross estate, application of allowable deductions, and timely filing are crucial to avoid penalties. Understanding local property valuation methods, collecting complete documentation, and coordinating with the relevant BIR offices and Quezon City government offices will help ensure a smoother estate settlement process.

For specific concerns related to your situation, especially if the estate is large or complex, consult with a qualified attorney or a tax professional to ensure full compliance with all legal requirements.