How Donor's Tax Works
Section 99 of the National Internal Revenue Code (NIRC), as amended by Republic Act No. 10963 (RA 10963), the TRAIN law, taxes gifts at a single rate: 6% of the total net gifts you make in a calendar year above ₱250,000. The rate is the same whether you give to your child, a relative or someone unrelated.
The ₱250,000 is a yearly allowance, not a per-gift one. If you give ₱150,000 in March and ₱200,000 in October, your gifts for the year total ₱350,000, so ₱100,000 is taxable and the tax is ₱6,000, all of it on the October gift. That is why the calculator asks for your earlier gifts this year.
What Counts, and What Is Exempt
- A gift of money, land, a house, a car, shares or any other property counts at its fair market value on the date of the gift. For real property, that is the BIR zonal value or the value in the Tax Declaration, whichever is higher.
- Selling property other than land or buildings for less than it is worth can count as a gift of the difference (NIRC Section 100).
- Gifts to the national government or a local government (a political subdivision), and to qualifying non-profit educational, charitable, religious, cultural or social welfare institutions, are exempt (NIRC Section 101), with conditions.
- Deductions from a gift include a mortgage or other debt on the property that the person receiving it agrees to take over.
Filing and Paying
File BIR Form 1800 and pay within 30 days of the gift. For a Deed of Donation, the BIR counts the 30 days from its notarization. Ask the BIR which revenue district office handles your return. It depends on where you live and, for land, where the property is.
For land or a building, documentary stamp tax of ₱15 per ₱1,000 is also due within 5 days after the end of the month of the notarization, and the city or province charges a transfer tax. After the BIR gives its go-signal for the transfer (the eCAR), the Registry of Deeds can transfer the title.
Common Questions
How Much Is the Donor's Tax in the Philippines?
6% of your total net gifts in a calendar year above ₱250,000, under the TRAIN law. A single gift of ₱1,000,000 in a year carries ₱45,000 in donor's tax.
Is a Gift to My Child Taxed at a Lower Rate?
No. Since 1 January 2018, the same 6% applies whoever receives the gift, family or not.
Is the ₱250,000 Exemption per Person Who Receives a Gift?
No. It is per donor, per calendar year, for all gifts to everyone combined.
Do I Need to File If My Gift Is Under ₱250,000?
The tax will be zero, but the BIR may still ask for the return, for example before it issues an eCAR to transfer a title. Ask your revenue district office.
Not legal advice. This is general information. For advice on your own situation, consult a lawyer. If you cannot afford one, the Public Attorney's Office (PAO) or an IBP legal aid office may help for free.
This is an estimate to help you plan. The BIR, the city or municipal treasurer or the Registry of Deeds works out what you actually pay. Government fees, rules and requirements change, so always check with the office concerned before you go.