Below is a comprehensive overview of the taxes, fees, and procedural considerations for a Deed of Donation of land in the Philippines, written in English. This summary is based on existing laws, regulations, and common practices. Please note that laws and regulations may change over time, and it is always best to consult with a lawyer or tax professional for specific legal advice.

1. Introduction

A Deed of Donation is a legal document through which a donor voluntarily transfers ownership of a piece of real property (such as land) to a donee, without receiving any payment or consideration in return. In the Philippines, donations of real property are subject to specific taxes, fees, and procedural requirements. Proper compliance with these legal obligations is crucial to ensure the validity of the donation and avoid penalties.

2. Key Philippine Laws and Regulations

Civil Code of the Philippines – Governs the general rules on donations (their form, capacity of donors and donees, revocation, etc.).
National Internal Revenue Code (NIRC) – Outlines tax obligations, including Donor’s Tax and Documentary Stamp Tax (DST).
Local Government Code – Provides for local transfer taxes.
Registry of Deeds Regulations – Sets out the requirements for registering the deed and transferring the title.
Rules on Notarial Practice – Governs the notarization process, which is essential to make the Deed of Donation a public instrument.

3. Donor’s Tax

3.1. Definition and Rate

What is Donor’s Tax? Donor’s Tax is a tax imposed on the privilege of transferring property by way of gift or donation. The rate and exemptions are governed primarily by the National Internal Revenue Code, as amended by the TRAIN Law (Republic Act No. 10963), which took effect on January 1, 2018.
Tax Rate Under the TRAIN Law. For donations made on or after January 1, 2018, the donor’s tax rate is a flat six percent (6%) on the total gifts in excess of PHP 250,000 made during the calendar year. Prior to TRAIN, donor’s tax rates were progressive and more complicated, but the new law simplified the structure.

3.2. Computation and Exemptions

Exemption Threshold. The first PHP 250,000 worth of donations in a calendar year is exempt from donor’s tax. Any amount above that threshold is taxed at 6%.
Special Exemptions. Certain donations to accredited nonprofit, religious, charitable, or educational institutions may qualify for exemptions or reduced rates, provided they meet specific legal requirements. Always check with the Bureau of Internal Revenue (BIR) or consult a tax professional for eligibility.

3.3. Filing Requirements

BIR Form 1800 (Donor’s Tax Return). The donor (or the donor’s authorized representative) must file this form.
Deadline. The donor’s tax return must be filed and the tax paid within thirty (30) days after the date the donation is made (the date appearing on the Deed of Donation).

3.4. Penalties for Late Filing or Non-Payment

Failure to file or pay donor’s tax on time can result in surcharges, interest, and penalties. The BIR imposes:

Surcharge. Up to 25% of the tax due if the return is filed late, among other grounds.
Interest. 12% per annum (subject to change per BIR rules) imposed on the tax due until paid.
Compromise Penalty. May also be imposed depending on the circumstances.

4. Documentary Stamp Tax (DST)

In addition to Donor’s Tax, donations of real property may be subject to Documentary Stamp Tax under the NIRC.

DST Rate. The usual DST for transfer of real property (in the case of donations) is computed at PHP 15.00 for every PHP 1,000 of the property’s fair market value, zonal value, or consideration, whichever is higher.
Payment and Filing. The DST return (often BIR Form 2000-OT for one-time transactions) must be filed and paid within five (5) days after the close of the month when the Deed of Donation was executed.
Basis of Computation. The BIR generally uses the higher of the property’s zonal value or fair market value as determined by the provincial or city assessor for tax purposes.

5. Local Transfer Tax

Local government units (LGUs) also impose transfer taxes for the registration of donated real property. While this tax is typically associated with sales or other conveyances, many LGUs likewise collect a transfer tax on donations. Key points:

Applicable Rate. Depends on the city or municipality, but is often around 0.50% to 0.75% (or as set by the local ordinance) of the property’s value.
Basis of Computation. Usually computed on the taxable base used for real property tax purposes (again, typically the higher of fair market value or zonal value).
Payment. Paid to the local treasurer’s office where the property is located. The local treasurer will issue a certification or receipt, which is required for registration.

6. Registration Fees at the Registry of Deeds

Once the donor’s tax, DST, and local transfer tax are settled, the Deed of Donation must be registered at the Registry of Deeds to transfer and issue a new title in the name of the donee. The registration fees vary depending on:

Assessed Value or Consideration. The Registry of Deeds typically has a schedule of fees based on the property’s declared value.
Other Incidental Fees. Includes fees for the issuance of a new Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT), entry fees, registration fees, and certification fees.

7. Notarial Fees

A Deed of Donation must be executed in a public instrument to be valid for real property. This requires:

Notarization by a Notary Public. The cost of notarization can vary, often depending on the value of the property. Some notaries have set fees, while others charge based on the complexity and value of the transaction.
Documentary Requirements. A valid ID, proof of property ownership (existing title, tax declarations, etc.), and the donor’s and donee’s personal information are typically needed by the notary.

8. Other Important Considerations

Authentication of Signatures (for Overseas Donors). If the donor is abroad, documents may need to be consularized or apostilled for the deed to be recognized in the Philippines.
Spousal Consent (If Married). Under the Family Code, if the land is conjugal or community property, the consent of the donor’s spouse may be required.
Capacity and Acceptance. The donor must have legal capacity to donate, and the donee must accept the donation. The donee’s acceptance must appear in the same Deed of Donation (or in a separate public instrument) for it to be valid.
Real Property Taxes. The donee becomes responsible for paying real property taxes (amilyar) going forward, starting from the year after the donation is completed, unless otherwise agreed upon in the deed.

9. Step-by-Step Checklist

Below is a simplified process outline:

Drafting the Deed of Donation.
- Ensure it contains the complete details of donor, donee, and the property.
- Make sure to include acceptance by the donee.
Notarization.
- Present proof of ownership (the current title) and valid IDs to the notary public.
- Obtain a notarized copy of the Deed of Donation.
Payment of Taxes.
- Donor’s Tax – File BIR Form 1800 within 30 days from execution of the deed and pay the tax due (if any, after considering the PHP 250,000 exemption).
- Documentary Stamp Tax – File the relevant DST return (BIR Form 2000-OT) within five days after the month of donation and pay the DST.
- Local Transfer Tax – Pay to the local treasurer’s office where the property is located.
Registration with the Registry of Deeds.
- Submit the notarized Deed of Donation, proof of payment of donor’s tax, DST, local transfer tax, and other required documents to the Registry of Deeds.
- Pay the registration fees.
Issuance of New Title.
- The Registry of Deeds will cancel the donor’s title and issue a new one in the name of the donee.
Keep All Documents.
- Maintain certified true copies of the new title, Deed of Donation, receipts of tax payments, and notarization records.

10. Conclusion

Donating land in the Philippines involves several tax obligations and fees that both donors and donees should understand to ensure a valid and legally binding transfer. The most critical taxes are Donor’s Tax (6% of the net donation above PHP 250,000), Documentary Stamp Tax, and local transfer tax. Additionally, there are registration fees, notarial fees, and other incidental costs that arise in the process of transferring property rights.

To avoid complications and potential penalties, it is always wise to seek professional advice—whether from a lawyer, a notary public, or a tax expert—before and during the preparation and execution of a Deed of Donation. Proper compliance with these requirements guarantees a smooth and valid transfer of land ownership.

Disclaimer: This overview is for general informational purposes only and does not constitute legal, tax, or financial advice. Laws and regulations may change, and the application of these laws and regulations can vary based on individual circumstances. Always consult a qualified attorney or tax professional to address your specific needs and situation.