Finance Secretary Ralph 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 Marcos, Jr. on June 13, 2024 to establish a just, equitable and efficient real property valuation system in the Philippines.
“With this milestone DOF priority bill, we are finally fixing the long outdated system for property valuation in the country and putting an end to inconsistent and unjust costs that hinder our local governments from delivering fast and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 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 said.
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. The reform also 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 will 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.
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 will 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.
