Cebu News

LGUs told to gear up to implement new property and tax valuation law

Mitchelle L. Palaubsanon - The Freeman

CEBU, Philippines — Local government units (LGU) in the Philippines will have to ensure their respective property and tax assessment policies are updated following the signing of the new law by President Ferdinand Bongbong Marcos Jr., that aims for a standardized valuation of real property based on internationally accepted principles.

The recently signed House Bill 6558, otherwise known as "An Act Instituting Reforms in Real Property Valuation and Assessment (RPVARA) in the Philippines, Reorganizing the Bureau of Local Government Finance, and Appropriating Funds Therefore", seeks to institute reforms in the country's more than a decade-old real property valuation and assessment.

RPVARA was one of the priority legislative measures of PBBM in his first State of the National Address and part of Package 3 of the Department of Finance's Comprehensive Tax Reform Program.

Mandaue City Lone District Representative Emmarie “Lolypop” Ouano-Dizon, the co-author of the newly-approved law, said that it is also her interest that LGUs must manage assessment levels, otherwise it will result to higher real property taxes, thus businessmen and ordinary real property owners will suffer.

Ouano-Dizon said that the implementation of this measure will provide much needed transparency and provide a solid benchmark for taxation.

“The RPVARA intends to address this by establishing uniform valuation standards,” Ouano-Dizon said in a statement.

According to the explanatory note of the new law, this reform on real property valuation can benefit Philippine real estate by having a more efficient assessment as it would not only raise revenues, “but also streamline the government's right of way acquisitions, which will speed up infrastructure projects to create more jobs and bring more value to land.”

But this will neither impose new taxes nor current tax rates since the LGUs will continue to set, adjust, and regulate tax rates and assessment levels.

It further aims to “improve tax collections without increasing tax rates by improving transparency, standardizing valuations and promoting fair tax practices, thus creating a more stable and attractive real estate market.”

Currently, different government agencies prepare valuations for multiple different purposes, such as taxation, expropriation, road-right-of-way acquisitions, and mortgage lending, among others. Apart from the costs and time allocated by different agencies involved, doing multiple different valuations can cause confusion and disputes in values, their bases, and even in methodologies.

With the signing of the measure into law, all provincial, municipal and city assessors are mandated to adopt Schedule of Market Values (SMVs), which shall be subject to the approval of the Secretary of Finance. SMVs will be updated every three years.

It also directed LGUs to enact an ordinance setting the assessment levels and real property tax rates to be implemented in their respective localities, taking into consideration the estimated revenue and tax impact of the new schedule of market values.

The Bureau of Local Government Finance (BLGF) under DOF, will lead the implementation of the RPVARA.

It will develop and maintain the planned centralized real property transactions electronic database, wherein the offices of the Register of Deeds, Bureau of Internal Revenue, notary public, officials issuing building permits, and geodetic engineers conducting surveys within a locality are required to electronically submit relevant transactions data quarterly. — (FREEMAN)

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