Real Estate Donation

by AB&B on July 16, 2022

Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is direct or indirect and whether the property is real or personal, tangible or intangible. 

BIR Form 1800

Documentary Requirements 
The following requirements must be submitted upon field or office audit of the tax case before the Tax Clearance Certificate/Certificate Authorizing Registration can be released: 

Mandatory Requirements:

1. Notarized Deed of Donation but only photocopied documents shall be retained by BIR; (One (1) original copy and two (2) photocopies)
2. TIN of Donor and Donee/s; One (1) original copy for presentation only)
3. Proof of claimed tax credit, if applicable; (One (1) original copy and two (2) photocopies)
4. Duly Notarized Special Power of Attorney (SPA) for the transacting party if the latter is not one of the parties to the Deed of Donation; (One (1) original copy and two (2) photocopies)
5. Official Receipt/Deposit Slip and duly validated return as proof of payment; (One (1) original copy and two (2) photocopies)
6. Copy of Tax Debit Memo used as payment, if applicable. (One (1) original copy and two (2) photocopies)
7. Certified True Copy/ies of the Original/Transfer/ Condominium Certificate/s of Title (front and back pages) of the donated property, if applicable; (One (1) original copy and two (2) photocopies)
8. Certified True Copy/ies of the Tax Declaration at the time or nearest to the date of the transaction issued by the Local Assessor’s Office for land and improvement, if applicable; (One (1) original copy and two (2) photocopies)
9. Sworn Declaration of No Improvement by at least one (1) of the transferees or Certificate of No Improvement issued by the Assessor’s Office, if applicable. (One (1) original copy and two (2) photocopies)

Other Additional Requirements, if applicable:

• Special Power of Attorney (SPA), if the person transacting/processing the transfer is not a party to the transaction; (One (1) original copy and two (2) photocopies)
• Certification from the Philippine Consulate or Hague Apostille Convention (if executed abroad); (One (1) original copy and two (2) photocopies)
• Location Plan/Vicinity map if zonal value cannot be readily determined from the documents submitted; (One (1) original copy and two (2) photocopies)
• Certificate of Exemption/BIR Ruling issued by the Commissioner of Internal Revenue or his authorized representative, if tax exempt; (One (1) original copy and two (2) photocopies)
• Such other documents as may be required by law/rulings/regulations/etc. (One (1) original copy and two (2) photocopies)

Tax Rates

(The rate applicable shall be based on the law prevailing at the time of donation)

For Donations Made on January 1, 2018 and onwards (Republic Act (RA) No. 10963/TRAIN)

Rate – The donor’s tax for each calendar year shall be six percent (6%) computed on the basis of the total gifts in excess of Two Hundred Fifty Thousand Pesos (P250,000) exempt gift made during the calendar year.

Notes:

1.  When the gifts are made during the same calendar year but on different dates, the donor’s tax shall be computed based on the total net gifts during the year.

2.  The relationship between the donor and the donee(s) shall not be considered. Republic Act No. 10963 (TRAIN Law) does not distinguish donations made to relatives, or donations made to strangers.