Transfer property to a relative

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What’s the Tea, Katie? or WTTK, is where I answer financial and investment questions from the readers of Katie Scarlett Needs Money blog. Although I try my best to answer the questions based on the information provided, I want to reiterate that I am not a not a licensed professional. These are my opinions and suggestions. 

On the other hand, I have no hidden agenda to sell you things, so, that even things out, 😀

Names and other identifying details were changed, and narration was edited for clarity.


Sasha V. is a Pinoy based in the USA. She is also a fellow fan of Dave Ramsey and the Total Money Makeover framework (which I covered in the post How to Achieve a Total Money Makeover in the Philippines). She wants to know what I think about transferring real estate properties to relatives.

As a reference and to give context to her question, Sasha V. provided a link to this Ask Dave article “Deed House to Son Before or In A Will?”

In the article, Dave discussed the tax implications of transferring ownership of a real estate property thru (1) a will versus (2) a donation. 

If the real estate property will be transferred to the relative once the current owner dies, it’s transfer by will. 

If the current owner wants to transfer the property now while they’re still alive, it will be considered a gift. 

But of course, the tax implications discussed by Dave in the article is applicable only to the USA. In the Philippines, we have an entirely different taxation regime.


To discuss Sasha V.’s concern, I think we should break down the issue into two parts: 

  • How much taxes will Sasha V. pay if she transfers ownership of the real estate property now? and
  • How Sasha V. feels about the very real possibility of losing control of the property while she’s still alive

Taxation for the transfer of property

Under the TRAIN Law, (Section 2 of Revenue Regulation 12-2018 dated January 25 2018), the donor’s tax is 6% for gifts in excess of Php 250,000 every calendar year

TRAIN no longer differentiates between donation to relatives and donation to non-relatives. We now only have one donor’s tax rate. 

So if the real estate property’s fair market value is more than Php 250,000, Sasha V. will pay a 6% donor’s tax for the excess. 

For example, if Sasha wants to transfer ownership of a commercial building with a fair market value of Php 3 million to her child, she will pay 6% of Php 2,750,000, or Php 165,000. 

Who will control the property?

Apart from the tax burden of the donation, I think the bigger question is, would Sasha V. be amendable to relinquishing control of the real estate property to her relative while she’s still alive?

I know of parents who put their children’s names on the property title which means that the child now owns the property. At the same time, the parents fully expect that they will still retain control of the property in question, even if their names are no longer in the title.

The underlying assumption is of course, that the children will keep their hands off the property as long as the parents are alive.  Even if the child legally owns the property.

Sasha V. did not mention the age of the relative (of their exact relation) to whom she’s thinking of giving the property to. But let’s assume that she’s planning on donating the property to her child. Let’s look at 2 scenarios. 

  • The child is a minor. In this case, Sasha V. will not have any problem controlling the property since she can make decisions on behalf of her minor child, including selling the property. This changes once her child becomes an adult (which will happen eventually).
  • The child is an adult. As an adult, they can do whatever they want with their property. They will also be able to legally enter into contracts. 


One factor that Sasha V. should consider before the transfer of the property is the feelings of the rest of the family. Transfer of property to a relative oftentimes is the cause of feuds and jealousy. But that’s information that we have no access to; so my answer is based on what we know. 

If Sasha V. is willing to pay the 6% donor’s tax and is willing to relinquish full control of the real estate property to her relative, then by all means she should transfer ownership.

But if her intention is still to retain control of the property even if it’s under another person’s name, I think it would be better for everyone involved if she retains ownership. 

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Katie Scarlett

is a personal finance advocate working towards achieving financial independence and early retirement (FIRE).

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