Finance Secretary Ralph G. Recto praised the new Real Property Valuation and Assessment Reform Act (RA 12001), signed into law by President Ferdinand R. Marcos, Jr. on June 13, 2024, as a significant advancement for the Philippines’ property valuation system.
The law aims to establish a just, equitable, and efficient real property valuation system, enhancing financial self-sufficiency among local government units (LGUs).
“With this milestone DOF priority bill, we are finally fixing the long-outdated system for property valuation in the country and putting an end to inconsistent and unjust costs that hinder our local governments from delivering fast and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,” Recto stated.
He added, “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.”
The new legislation introduces a single valuation system for real properties aligned with international standards, ensuring consistency and transparency in both local and national taxation processes.
The reform is expected to professionalize assessors and separate technical valuation from the political aspects of taxation, addressing issues of overregulation and overlapping policies.
To standardize property valuation, RA 12001 employs the Philippine Valuation Standards (PVS), based on the International Valuation Standards (IVS).
The implementation includes developing an electronic Real Property Information System (RPIS), a comprehensive database for all real property transactions. This system will transmit data to the Bureau of Local Government Finance (BLGF) to aid in preparing the Schedule of Market Values (SMVs).
Additionally, the law establishes the Real Property Tax Administration Fund (RPTAF) to update SMVs, revise real property assessments, and manage property taxes across all LGUs. The BLGF will oversee the development and maintenance of PVS.
Furthermore, a real property tax amnesty covering penalties, surcharges, and interests from unpaid real property taxes is available for two years post-enactment. The provision aims to encourage compliance and provide financial relief to property owners.
The law is also designed to improve tax collection without increasing tax rates by expanding the tax base.
Updated property values will lead to higher property tax revenues, enabling LGUs to fund better services and infrastructure projects, potentially making urban areas more attractive for investment and living.
While the law promises enhanced funding and service delivery for LGUs, there are concerns that the new valuation system might lead to increased real estate prices, particularly in urban areas.
By standardizing property valuations and making them more transparent, the reform is expected to increase property values, particularly in cities.
More accurate valuations could lead to higher assessed values, which in turn could drive up market prices as property assessments become more aligned with market realities.
The new law is poised to foster investor confidence, increase public trust in the government’s valuation system, and improve LGU revenue generation, enabling them to meet their service delivery requirements effectively.
Source: Daily Guardian