President Ferdinand Marcos Jr. on Thursday, June 13, 2024, signed into law the Real Property Valuation and Assessment Reform Act (RPVARA), which aims to standardize the country’s valuation of real property. The law is now called Republic Act No. (RA) 12001.
To encourage tax compliance, the administration will offer a two-year amnesty on interests and penalties for unpaid real property taxes.
The President led the ceremonial signing of this key priority measure, aligned with the 8-Point Socioeconomic Agenda, inside Malacañang Palace.
Senate President Francis “Chiz” Escudero and the House of Representatives led by Speaker Martin Romualdez graced the signing of the law. Representing the BLGF were Executive Director Consolacion Agcaoili and Director Pamela Quizon.
“This new law is necessary to enhance the country’s tax collection system, generate revenues, create jobs, and attract investments. No longer will we rely on the outdated valuation system,” the President said.
Republic Act 12001 or the RPVARA aims to standardize real property appraisal with international standards and use prevailing market value for tax assessments.
It would also support local government modernization through the Real Property Information System.
“At the heart of this new law, we have adopted a strategy that will instill and encourage long-term and consistent tax compliance by providing a two-year amnesty on interests and penalties for taxpayers with unpaid real property tax,” Marcos said.
On this note, Finance Secretary Ralph G. Recto welcomed the enactment of the RPVARA, which seeks 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“With this milestone DOF priority bill, we are finally fixing the long outdated system for property valuation in the country and putting an end to inconsistent and unjust costs that hinder our local governments from delivering fast and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,” Recto said.
Recto added that it would adequately fund local government units (LGUs) and equip them 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.
This reform in taxation will enable the professionalization of assessors, separating the technical aspect from the political aspect of taxation. It seeks to address problems associated with overregulation, overlapping policies, and questions on jurisdiction which often results in inconsistencies in valuation.
At least 20 government agencies are currently engaged in their respective valuation processes for various purposes.
By standardizing property evaluation, the RPVARA is now free to utilize the Philippine Valuation Standards (PVS) based on International Valuation Standards. This is a principle-based standard that promotes transparency and maintains a high level of trust in the practice of valuation.
It involves a comprehensive electronic Real Property Information System (RPIS) designed to 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). This updates the SMVs, general revision of real property assessments, and the administration of real property taxes in all LGUs.
This would require LGUs to appropriate funds from locally generated incomes, the national tax allotment, or such other sources for each fiscal year.
In light of this, the Secretary of Finance, through the BLGF, shall grant a subsidy to third- and lower-income class LGUs aimed at augmenting their resources for the purposes of creating the RPTAF.
Furthermore, this tax law offers real property tax amnesty– availed within a period of two years –designed to 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.
“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,” Secretary Recto said.
Editor’s Note: This is an updated article. Originally posted with the headline: “Marcos inks Real Property Valuation and Assessment Reform Act “
