FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
1 
First Regular Session 
) 
Introduced by Senator Richard J. Gordon 
EXPLANATORY NOTE 
Upon the death of a spouse, the surviving spouse is usually burdened with 
the payment of the estate tax on the decedent’s net estate, which often reach an 
unconscionable amount largely due to the inclusion of the family home whose 
current fair market value exceeds One Million Pesos (Pl,OOO,OOO.OO) in the 
computation of the net estate of the decedent. In most cases, the surviving spouse 
does not have the available cash to pay for this and ends up losing the family home 
just to raise the needed cash to pay for the estate tax. 
More often than not, the surviving spouse still needs the family home to live 
in. It would be highly unfair to deprive the surviving spouse of the family home just to 
pay for the estate tax of the decedent. 
Thus, this bill proposes to suspend the payment of the estate tax on the 
family home by allowing the deduction of the full current fair market value of the 
family home from the net estate of the decedent, if the decedent leaves a surviving 
spouse behind. Only when the surviving spouse eventually dies will the family 
home, with its current fair market value exceeding One Million Pesos 
(Pl,OOO,OOO.OO), be included in the computation of the net estate for the payment of 
the estate tax of the surviving spouse. This intends to ease the burden of the 
surviving spouse from the ordeal of putting up cash to pay for the estate tax on the 
family home, especially after having suffered the death of the decedent, mourning 
the loss of the family, and shouldering many other expenses, particularly medical 
and burial expenses of the decedent. 


I 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
FOURTEENTH CONGRESS OF THE REPUBLIC) 
OF THE PHILIPPINES 
) 
Firsf Regular Session 
1 
SENATE 
S. No. 28 
Introduced by Senator Richard J. Gordon 
AN ACT AMENDING SECTION 86 (A) (4) OF REPUBLIC ACT NO. 8424, AS AMENDED, 
OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997 
Be if enacfed by the Senate and fhe House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 86 (A) (4) of Republic Act No. 8424, as amended, otherwise 
known as the National Internal Revenue Code of 1997, is hereby amended to read as 
follows: 
"(6) The Fami/y Home. - An amount equivalent to the current fair 
market value of the decedent's family home: Provided, however, That if the 
said current fair market value exceeds One Million Pesos (PI ,OOO,OOO.OO), 
the excess shall be subject to estate tax. NOTWITHSTANDING, IF THE 
DECEDENT HAS A ,SURVIVING SPOUSE, THE FULL AMOUNT 
EQUIVALENT TO THE CURRENT FAIR MARKET VALUE OF THE 
DECEDENT'S FAMILY HOME SHALL BE ALLOWED TO BE DEDUCTED 
FROM THE VALUE OF THE DECEDENT'S GROSS ESTATE AND SHALL 
NOT BE SUBJECT TO ESTATE TAX. As a condition sine qua non for the 
exemption or deduction, said family home must have been the decedent's 
family home as certified by the barangay captain of the locality." 
Sec. 2. Repealing Clause. - All laws, decrees, orders, rules and regulations or 
other issuances or parts thereof inconsistent with the provisions of this Act are hereby 
repealed and modified accordingly. 
Sec. 3. Effectivity. - This Act shall take effect fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
Approved,