Real Property Taxation

Fundamental Principles
1. Current and fair market value is the basis of
appraisal
2. Uniformity in classification in each LGU should be
observed
3. Actual use of the property is the basis of classification
4. Appraisal, assessment, ley and collection should not be let
to any private person
5. Equitable appraisal and assessment
Nature and Characteristic of Real Property Tax
Is a direct tax on ownership of lands and buildings or other
improvements thereon payable regardless of whether the property
is used or not

Ad valorem tax the assessed value is the tax base

Proportionate the tax is calculated on the basis of a certain

percentage of the value of the property assessed

Indivisible single obligation

Local Tax

Real Property Taxation covers the administration, appraisal,

assessment, levy and collection of RPT (includes land building,
other structures including machineries)
Properties which are liable for Real
property tax

Land

Buildings

Machinery and

Other improvements not otherwise exempted under the

LGC
Classification of Land for purposes of
Assessment
Commercial

Agricultural

Residential

Mineral

Industrial

Timberland

Special Hospitals, Cultural and scientific purposes ; owned

and used by local water districts; GOCCs rendering essential
public services in the supply and distribution of water and/or
generation or transmission of electric power
Properties Exempt from RPT
Owned by the Republic or its political subdivisions ( except
when beneficial use has been granted to a taxable person)

Charitable institutions, churches, parsonages, convents

appurtenant thereto, mosques, non profit or religious
cemeteries, buildings and improvements actually directly and
exclusively used for religious, charitable or educational
purposes.

Those owned by Cooperatives

Machineries and equipment for pollution control and

environmental protection.
ppraisal And Assessment of real property
tax

Rule on appraisal of RPT at FMV

Declaration of Real property

Listing of real property in the assessment rolls

Preparation of schedules of FMV

Classes of Real property

Actual Use of real property

Assessment of real property

Assessment of machinery
Appraisal and Assessment of RPT
Rule on appraisal of real property at FMV
Real property shall be classified, valued and assessed on the
basis of actual use regardless of where located, whoever owns it
and whoever uses it.
Unpaid RPT attached to the property and are chargeable against
the person who had actual or beneficial use and possession of it,
regardless whether or not he is the owner.
 Appraisal and Assessment of Real Property
Tax
Declaration of real property
Sworn statement declaring the true current FMV filed with the
LGU assessor once every 3 years

Refusal or failure to make such declaration: Assessor shall

declare the property in the name of the defaulting owner or
against an unknown owner and assess the property for
taxation
Appraisal and assessment of real
property tax

Listing of Real property in assessment rolls

Appraisal and Assessment of Real
Property Tax

Preparation of schedules of FMV

Authority of assessor to take evidence, he may
Summon owners or persons having legal interest or
witnesses
Administer oaths, or
Take depositions
Amendment of schedule of FMV- local assessors may
recommend amendments to correct errors in valuation
Classes of Real Property for Assessment
purposes

Residential

Agricultural

Commercial

Industrial

Mineral

Timberland

Special
Actual Use as basis of assessment
Real properties are classified valued and assessed based
on its actual use, regardless of location or owner
Assessment of real property
Assessment the act or process of determining the value of
the property, or proportion thereof subject to tax, including
the discovery listing, classification and appraisal of properties

Assessment levels the percentage applied to the FMV to

determine the taxable value of the property

Assessed value or taxable value = FMV x assessment level

;assessed value x tax rate = RPT
Assessment Levels
Residential 20%

Agricultural 40%

Commercial 50%

Industrial - 50%

Mineral 50%

Timberland 20%
General Revisions
General revisions of assessments and property
classification is done every 3 year
Date of Effectivity of Assessment or
Reassessment
All Assessments or reassessment made after the 1st day
of January of any year shall take effect on the 1st day of
January of the succeeding year. Section 221 of the LGC
Assessment of property subject to
Back taxes

Real property declared for the first time shall be

assessed for back taxes for the period it would have
been liable but in no case more than 10 years prior ro
the date of initial assessment

Computation based on the schedule of values

corresponding to the period

Taxes shall be subjec to 2 % per month

Assessment of Machinery
FMV of brand new machinery is the acquisiion cost; in
all other cases , FMV divided by the remaining economic
life

If imported acquisition cost includes, freight insurance,

custom duties, plus all inland transportation cost
Collection of Real Property Tax
Date of accrual
First day of January
It will constitute a lien from such date and shall be extinguished only upon
payment of delinquent tax

Collecting authority
City of municipal treasurer
May deputize barangay treasurer to collect

Duty of the assessor is to furnish local treasurer with the assessment

rolls

Notice and time to collect

On or before 31st of January each year, the Municipal or city treasurer may
post a notice of dates when tax maybe paid without interest
 Periods within which to collect
RPT
Within 5 years within which they become due
In case of fraud 10 years from discovery of such fraud
Period maybe suspended under the following circumstances
Local treasurer is legally prevented from collecting tax
Owner or the person having legal interest requests for
reinvestigation and executes a waiver in writing before the
expiration of the period
Owner of the property or the person having legal interest is out of
the country or can not be located
Special Rules on payment
Payment in installments
Basic RPT and SEF in four equal installments
Special Levy- depends upon the provisions of the ordinance
imposing such special levy
Special Rule on Interests on unpaid
RPT
2 % per month but not to exceed 36 months
Special Rules on Payment of RPT
The Sanggunian concerned, by ordinance, and upon
recommendation of the Local Disaster Coordinating Council
may condone reduce the RPT, due to
General failure of crops
Substantial decrease in the price of agricultural or agri based
products
calamity
Types of Real Property Tax
Basic real property tax

Special levies
Special Education Fund (SEF )
Additional AD valorem on lands not exceeding 5% of the
assessed value of the property
Special assessments on lands specially benefited by public
works, projects or improvements funded by LGU shall not
exceed 60% of the actual cost of such projects, including
the land
Other types of RPT
Idle land tax
Agricultural land- more than 1 hectare if
more than of which remain
uncultivated or unimproved
Non agricultural lands more than
1000sq.m. in area if more than of
which remain uncultivated or
unimproved
Remedies of LGUs for Collection of RPT

Issuance of Notice of delinquency of the RPT payment

Impose local governments lien

Levy
Levy
Issuance of warrant by the LGU treasurer (on or before or
simultaneously with the institution of civil action for collection of
delinquent tax)

Advertise sale or auction (within 30 days after service of warrant)

by posting and publication

Sale

Report of sale (within 30 days after sale). Preparation of certificate

of sale containing the name of the purchaser, description of the
property , amount of delinquent tax and its interest, and expenses.

Redemption (within 1 year from date of sale)

Issuance of final Deed to purchaser (upon the delinquent taxpayers

failure to redeem)

Purchase of property by local treasurer for want of bidder in case

there is no bidder for the real property advertised or if the highest
bid is insufficient to pay the RPT and other costs.
Taxpayers Remedies
Contesting an assessment of value of real property
By Taxpayer who has legal interest in the property may
contest an assessment ( does not include an entity that
assumes another persons tax liability by contract (NPC vs
Prov of Quezon, 611 SCRA 71)
Within 60 days from receipt of written notice of
assessment appeal to the LBAA
Real Property Taxation
1. Protest: Assessment of Land Value 2. Protest Assessment/Collection of
RPT
Assessment Notice from Date of Payment
Local Assessor (Payment under Protest
Required)
Protest within 60 days
Protest within 30 days
LBAA
(120 days to decide) Local Treasurer
(60 days to decide)
Appeal within 30 days
Appeal within 60 days
CBAA
Petition for review within 30 LBAA
days ( 120 days to decide)

CTA En Banc Appeal within 30 days

Petition for review on
Certiorari within 15 days CBAA
SC Petition for review within 30
days
CTA En Banc
Petition for review on
Certiorari within 15 days

SC