THIRTEENTH CONGRESS OF THE REPUBLIC ) 
OF THE PHILIPPINES 
Third 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 (PI ,000,000) 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), 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 ~
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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 de& of the ~
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of the family, and s h o u ~ ~ e r ~ n ~  
many other expenses, particularly medical and burial 
expenses of the decedent. 
Senator 
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THIRTEENTH CONGRESS OF THE REPUBLJC ) 
OF THE PHILIPPINES 
1 
Third Regular Session 
) 
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 it enacted by the Senate and the House of Representafives 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: 
"(4) The Family 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 (Pl,OOO,OOO), 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 sine qua non condition 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 or 
modified accordingly. 
Sec. 3. Effectivity. - This Act shall take effect after fifteen (15) days following the 
completion of its publication either in the Official Gazette or in a newspaper of general 
circulation in the Philippines. 
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Approved,