BY ONLINE BALITA NEWS
Finance Secretary Ralph G. Recto has welcomed the enactment of the Real Property Valuation and Assessment Reform Act, which was signed into law as Republic Act No. (RA) 12001 by President Ferdinand R. Marcos, Jr. on June 13, 2024, to establish a just, equitable, and efficient real property valuation system in the Philippines, empowering local government units (LGUs) to be financially self-sufficient.
“With this milestone DOF priority bill, we are finally fixing the long outdated system for property valuation in the country and putting an end to inconsistent and unjust costs that hinder our local governments from delivering fast and reliable public service,” he said.
“We can expect our LGUs to be adequately funded and more equipped to attend to the needs of their constituents. Investors and landowners alike can expect one hundred percent transparency and accuracy in the valuation of their properties with this new law,” he added.
RA 12001 will establish a single system of valuation for real properties that is aligned with international standards to be used for local and national taxation, among other purposes.
In particular, the reform professionalizes the assessors and separates the technical aspect of the valuation process from the political aspect of taxation, addressing overregulation, overlapping policies, and jurisdiction resulting in inconsistency in valuations.
There are currently at least 20 government agencies engaged in their respective valuation processes for various purposes.
To standardize property valuation, the RPVARA utilizes the Philippine Valuation Standards (PVS), which is based on the International Valuation Standards (IVS)––an international principle-based standard that promotes transparency and consistency and maintains a high level of public trust in the valuation practice.
The implementation of a standardized valuation system involves the development of an electronic and comprehensive Real Property Information System (RPIS), which shall function as a database of all real property transactions with the inclusion of the duty of the Registers of Deeds, Bureau of Internal Revenue (BIR), and notaries public, among others
The RPIS will transmit all real property-related transaction data to the BLGF to aid in the preparation of the Schedule of Market Values (SMVs) and the development of the database.
The new law will not only foster investor confidence and public trust in the government’s valuation system but also increase LGUs’ revenue generation and resource mobilization, helping them fund their service delivery requirements.
As the primary implementing agency of the RPVAR, the BLGF will be tasked with the development, adoption, maintenance, regulation, and specification of the PVS.
The law also institutes the creation of the Real Property Tax Administration Fund (RPTAF), which shall be used for the updating of the SMVs, general revision of real property assessments, and the administration of real property taxes in all LGUs.
This requires LGUs to appropriate funds from locally generated revenues, the national tax allotment, or such other sources every fiscal year.
In light of this, the secretary of Finance, through the BLGF, shall grant a subsidy to third- and lower-income class LGUs to augment their resources for the purposes of creating the RPTAF.
Moreover, the law grants a real property tax amnesty which shall cover penalties, surcharges, and interests from all unpaid real property taxes, including Special Education Fund, idle land tax, and other special levy taxes, prior to the effectivity of RA 12001.
The amnesty granted can only be availed within a period of two years after the effectivity of the law.
Present during the ceremonial signing were representatives from the Senate led by Senate President Francis “Chiz” Escudero and the House of Representatives led by Speaker Martin Romualdez.
“I extend my utmost gratitude to the Bureau of Local Government Finance [BLGF] for their efforts and dedication to enhance local governance through the passage of the RPVARA,” Recto said.
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