Notarial Fee for Deed of Donation

Below is a comprehensive discussion on Notarial Fees for a Deed of Donation in the Philippines, covering the legal basis, how fees are generally calculated or determined, and related considerations that donors and donees should bear in mind. Please note that this information is for general guidance only and does not constitute legal advice. For specific questions or concerns, it is best to consult a qualified lawyer in the Philippines.

1. Overview of Donations Under Philippine Law

  1. Definition of Donation
    A donation is an act of liberality by which a person (the donor) disposes of a thing or right in favor of another (the donee), who accepts it. This is governed primarily by the Civil Code of the Philippines (Articles 725–773).

  2. Formalities for Valid Donations

    • Donation of Movable Property (Personal Property)
      • If the value of the movable property exceeds PHP 5,000, the donation and acceptance must be made in writing. If it is below PHP 5,000, no formal writing is strictly required, though it is often recommended to document it.
    • Donation of Immovable Property (Real Property)
      • Must be made in a public instrument (i.e., notarized document).
      • The donee must accept the donation in the same public instrument or in a separate public instrument, and the donor must be informed in an authentic (i.e., notarized) form.

  3. Importance of Notarization

    • For real property, the Deed of Donation must appear in a public instrument to be considered valid.
    • Notarization helps prove the authenticity of the Deed of Donation and ensures it meets legal requirements.
    • A properly notarized Deed of Donation is typically required by government offices such as the Bureau of Internal Revenue (BIR) and the Registry of Deeds.

2. Legal Basis for Notarial Fees in the Philippines

  1. The 2004 Rules on Notarial Practice (A.M. No. 02-8-13-SC)
    These rules set forth the guidelines on how notarization should be done in the Philippines. The Supreme Court, through these rules, delegates some authority to the Integrated Bar of the Philippines (IBP) chapters or local organizations to recommend schedules of fees.

  2. Integrated Bar of the Philippines (IBP) Fee Guidelines

    • The IBP often recommends a schedule of notarial fees, but these fees are not uniform across the country. Different IBP chapters may adopt different recommended ranges for notarial fees.
    • The purpose of these guidelines is to prevent overcharging or undercutting by notaries public.

  3. Local Court or Chapter Regulations

    • In some areas, local executive judges (in coordination with the IBP) approve a schedule of notarial fees.
    • Courts, however, will only step in if the fees are found to be unconscionable or extremely excessive.

In practice, the notarial fee for a Deed of Donation can vary widely depending on:

  • The value of the property or right being donated.
  • The complexity of the document preparation.
  • The region or locality where the notary public practices.

3. Typical Range or Basis of Notarial Fees

  1. Value-Based or Fixed Fee

    • Some notaries charge a percentage of the property’s fair market value or zonal value (if the donation involves land or other real property).
    • Others charge a fixed fee based on the type of instrument—especially if the donation involves relatively low-value property.
    • A notary public in a high-cost-of-living area (e.g., Metro Manila, Cebu, Davao) may charge higher fees compared to notaries in smaller cities or rural areas.

  2. Complexity of the Deed

    • When the deed requires additional clauses or involves complex stipulations (e.g., reservation of usufruct, conditions on the donation, third-party rights, etc.), the lawyer may charge more because more drafting and due diligence are required.
    • If you request additional legal services—such as title verification, background checks, or drafting of side agreements—these can add to the cost over and above the standard notarial fee.

  3. Minimum Charges vs. Professional Fees

    • Certain notaries maintain a minimum charge even for relatively straightforward notarial acts.
    • If the value of the donation is very large, the lawyer may apply a tiered or incremental percentage fee.

4. Procedure for Notarizing a Deed of Donation

  1. Drafting the Deed

    • Typically, a lawyer drafts or reviews the Deed of Donation to ensure compliance with the Civil Code.
    • It should contain the details of the donor, donee, the property or right being donated, and any conditions (if applicable).

  2. Acceptance by the Donee

    • The donee’s acceptance must be explicitly stated in the same Deed of Donation or in a separate public instrument.
    • Both donor and donee must appear before the notary public (either together or separately, depending on the logistics and the notary’s procedure) to acknowledge that they signed the document voluntarily.

  3. Notarization

    • The notary public will verify the identities of the parties, confirm that they voluntarily signed the instrument, and ensure all the formalities are observed.
    • The notary public will then affix the notarial seal and details (commission number, roll of attorneys number, etc.), making the document a public instrument.

5. Taxes and Related Fees Beyond Notarial Fees

It is important to distinguish Notarial Fees from other payments that may arise from a Deed of Donation:

  1. Donor’s Tax

    • Imposed by the Bureau of Internal Revenue (BIR) on the donor (giver).
    • Under the TRAIN Law (Republic Act No. 10963), donations above a certain threshold within a calendar year are subject to a 6% donor’s tax (calculated on the fair market value or zonal value of the property, whichever is higher, less any allowable deductions).
    • Certain exemptions and deductibles apply, depending on the relationship between donor and donee and the nature of the donation (e.g., donations to qualified charitable institutions may be exempt or have special treatment).

  2. Documentary Stamp Tax (DST)

    • Donations of real property generally also attract documentary stamp taxes (commonly 1.5% of the fair market value or zonal value of the property).

  3. Registration Fees

    • If the property is registered real estate, once the BIR has issued the Certificate Authorizing Registration (CAR) or eCAR, the Deed of Donation must be presented to the Registry of Deeds for the transfer of title.
    • The Registry of Deeds charges registration fees, usually based on a government schedule.

  4. Local Transfer Tax

    • Some local government units (LGUs) impose a transfer tax (ranging from 0.5% to 0.75% of the value of the property). While this is often associated with a sale, some LGUs also require a transfer tax in the case of donation.

These taxes and fees are separate from the payment made to the notary public.

6. Practical Tips for Parties to a Donation

  1. Obtain Multiple Quotes

    • If notarial fees appear too high, you can check with other notaries or law offices. However, also consider the experience and reputation of the lawyer or notary.

  2. Discuss the Scope of Services

    • Clarify with the lawyer whether the quoted fee covers only notarization or includes drafting, tax advice, and administrative assistance with the BIR and Registry of Deeds.

  3. Gather All Necessary Documents

    • For real property donations, prepare the latest Tax Declaration, Certified True Copy of Title, and government-issued IDs of donor(s) and donee(s).
    • Keep ready any proof of relationship (if needed), since the BIR may request additional documents for donor’s tax calculations or exemptions.

  4. Ensure Valid Acceptance

    • Remind the notary public and the lawyer to record the donee’s acceptance on the deed or in a separate instrument. Missing the acceptance could invalidate the donation.

  5. File and Pay Donor’s Tax Promptly

    • The BIR imposes deadlines (generally thirty (30) days from date of donation) for the filing of the donor’s tax return and payment of donor’s tax, to avoid penalties and surcharges.
    • Consult with an accountant or tax lawyer if needed.

  6. Retain Certified Copies

    • After notarization and payment of taxes, keep multiple certified copies of the Deed of Donation, including the official receipt(s) for the notarial fee and tax payments.

7. Key Takeaways

  • No Fixed Uniform Fee: Notarial fees for a Deed of Donation are not standardized nationwide. They may be determined by the complexity of the document, the value of the property donated, and local IBP chapter guidelines.
  • Legal Requirements: For donations of real property, notarization is mandatory to ensure validity; failure to notarize can invalidate the donation.
  • Taxes and Other Charges: Parties must consider donor’s tax, documentary stamp tax, and registration fees, which are entirely separate from notarial fees.
  • Professional Advice: Because donations can have significant legal and tax consequences, parties frequently engage a lawyer to handle drafting, notarization, and compliance with BIR regulations and local government requirements.

Disclaimer

This write-up provides general information on the notarial fees for a Deed of Donation in the Philippines and related requirements. It is not a substitute for professional legal counsel. For personalized advice, you should consult a lawyer familiar with the specifics of your situation.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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