Introduction to the Real

Property Tax Administration

(RPTA)
Definition of terms

Real Estate – the physical land and all those

items, which are attached to the land. It is
physical, tangible entity which can be seen and
touched, together with all additions on, above or
below the ground.
Real Property – includes all the rights , interests
and benefits related to the ownership of real
estate is evidenced by a Title, Free Patent or Tax
Declaration in the absence of Certificate of Title.
Four Kinds of Real Property

Land
Buildings and other structures
Machinery
Plant
Commonly used terms

 Penalty – The interest imposed o unpaid

RPT from the year it was due. 2% is
imposed for every month but shall not
exceed 72% or 36 months.
 Barangay Share (Municipality) – 25%
share of barangay governments received
from the collection of Basic Real Property
Tax.
 Barangay Share (City) – 30% share of
barangay governments received from the
collection of Basic Real Property Tax.
Commonly used terms

 Cost-to-Collection Ratio – the amount spent

to collect 1 peso.
 Property Class – For purposes of real property
taxation, properties are classified into
Residential, Agricultural, Commercial,
Industrial, Mineral and Timberlands.
 Property Sub-Class – The actual use of the
property per given property classification.
 Base Unit Value – the value per square meter
of land or building or value per hectare for
agricultural lands and Timberlands.
Real Property Tax Administration (RA
7160)
Important provisions:
 Power to Levy Real Property Tax
Section 232 of the LGC authorizes LGUs to
levy an annual ad valorem tax on real
property.

 Administration of Real property Tax

Section 200 of the LGC authorizes the
provinces, cities, and municipalities within
the Metropolitan Manila Area to administer
real property taxation.
Real Property Tax Administration (RA
7160)
 Preparation of Schedule of Fair Market
Values.
Section 212 requires the preparation of
and enactment to an ordinance a schedule
of fair market values prior to the conduct of
a general revision.
 Appraisal of Real Property
Section 201 provides the appraisal of
properties at the current and fair market
value. The DOF promulgates rules and
regulations for the classification, appraisal,
and assessment of real property.
Real Property Tax Administration (RA
7160)
 General Revision of Assessments
Section 219 requires the undertaking of a
general revision of real property assessments
within two(2) years after the effectivity of the
LGC Code and every three(3) years thereafter.
 Actual Use of Real Property as Basis for
Assessment
Section 217 provides that properties be
classified, valued and assessed based on its
actual use regardless of location, ownership,
and use.
Computing Market Value(MV)

 For Buildings:
MV = Area x Base Unit Value
Where: MV - market value of the property
Area - in square meters for all Classes of
properties.
Base Unit Value – the value of property per
square meter for all classes of properties.
Assessment levels
 Assessment Level is the percentage applied
to the Market Value(MV) to determine the
taxable value of the property.

 Section 218 provides that the assessment

levels to be applied to the fair market value
of real property to determine its assessed
value shall be fixed by ordinances of the
sangguniang concerned but shall not exceed
that of which is provided in the LGC.
Assessment levels
 Assessment Levels
 (a) On Lands:

CLASS ASSESSMENT LEVELS

 Residential 5%
 Agricultural 20%
 Commercial 12%
 Industrial 12%
 Mineral 40%
 Timberland 10%
 Four Phases of RPTA:

 Phase 1- PROPERTY IDENTIFICATION

 Phase 2-APPRAISAL AND ASSESSMENT

 PHASE 3- RECORDS MANAGEMENT

 PHASE 4- COLLECTION AND

ENFORCEMENT
Phases of RPTA

 Phase I: Real Property Identification

Property identification includes tax mapping
and field ocular inspection to accurately identify
the attributes of real properties.

 Phase II: Appraisal and Assessment Process

Assessment is the determination of the value
of a property, or proportion thereof subject to
tax, including the discovery, listing, classification,
and appraisal of properties. Appraisal is the
valuation of property as of a specific date for a
specific purpose
Phases of RPTA

 Phase III: Records Management

-Data and other information gathered from

the field including the taxable assessed values
are translated into usable records for purposes
of records keeping, reporting, and inventory.

There are two records:

 Technical records
 Non-Technical Records.
 Phases of RPTA
 Phase III: Records Management (Assessor)

 Technical records:
Tax Maps (TM), Tax Map Control Rolls (TMCR), Tax
Declarations (TD), Field Appraisal and Assessment Sheets
(FAAS), and Reports of reappraisal.

 Non-technical records:
Journal of Assessment Transactions (JAT), Property
Record Forms (PRF), Assessment Roll (AR), Journal of
Cancelled Assessment (JCA), Notice of Assessment and Tax
Bill (NATB), and Real Property Tax Order of Payment
(RPTOP).
Phases of RPTA

 Phase III: Records Management

 Treasury records:
Notice of Assessment and Tax Bill (NATB),
Real Property Tax Account Register (RPTAR),
Real Property Tax Order of Payment (RPTOP),
Notice of Delinquency and others pertinent to
administrative and judicial functions.
Phases of RPTA
 Phase IV. Tax Collection and Enforcement

 The collection portion of this phase

includes billing, collection and recording of
regular and delinquent accounts.

 The enforcement portion of this phase

includes administrative proceedings as
well as the application of Judicial
remedies.
 USES OF THE SEF TAX
 The organization and operation of
extension classes and the creation of new
positions for teachers;
 School infrastructure projects;
 Teachers salaries and benefits;
 Preparation and printing of textbooks and
other publications;
 Purchase, improvement and repair of
vocational equipment;
 Establishment of printing plant;
 Purchase of teaching materials and other
teaching aids;
 Implementation of program for citizenship
development and adult education;
 Uses of SEF
 Operation and maintenance of public school;
 Construction and repair of school buildings, facilities
and equipment;
 Educational Research;
 Purchase of books and periodicals; and
 Sports development.
 Educational research;
 Scholarships; and
 Promotion of physical education.
CALCULATING AND ANALYZING TAX
COLLECTIBLES
 Fair Market Value (FMV) – The value of a
property as agreed by the buyer and a
seller in arm’s length transaction. It is
commonly based from a schedule of fair
market values if the property
characteristics suits the criteria for the
said schedule.
 Assessment Level(AL) – The rate applied
to property value subject for real property
tax, as approved by local ordinance.
 Assessed Value (AV) – The resulting value
subject to RPT after applying the
Assessment Level.
 CALCULATING AND ANALYZING TAX
COLLECTIBLES

 Total Assessed Value – The aggregate of every

taxable real property located in each barangay.
 Tax Rate – The rate to be imposed to the Assessed
Value to arrive at the tax due. Maximum of 1%
basic tax for Municipalities and Component Cities
or a maximum of 2% for Cities. An additional of
1% rate is imposed for Special Education Fund
that accrues to the Local School Board.
 Total Collectible – The total amount of taxes due
for collection for the current year and including
previous taxes and penalties.
COMPUTING THE TAX DUE

For Lands:
MV = Area x Base Unit Value
Where: MV - market value of the
property
Area - in sq.m. for residential,
commercial, industrial, mineral and
special properties and hectares for
agricultural and timberland.
Base Unit Value – the value of property
per unit area.
Example: for residential land
Poblacion,Rosario
 Area=500 sq.m
 2nd class residential
 Unit value(UV)= 950/sq.m
 MV=Area x U.V.
MV= 500 x 950 =475,000
 AV= MV x AL
Av= 475,000 X 5%
AV = 23,750
 Tax due = 23,750 x 2%
= 475
COMPUTATION OF MARKET VALUE

For agricultural land: 3rd class

Example : rice land without irrigation UV = 106,560/ha.
Area = 3.0000has.
MV = 3.0000 x 173,780
= 521,340
AV = 521,340 x 20%
= 104,270
Tax due = 104,270 x 2%
= 2,085.40
COMPUTATION OF MARKET VALUE
 For Machinery:

 MV = Acquisition cost + cost of freight, handling

and installation

 Where: MV - market value of the property

 Acquisition cost – price in peso or foreign currency
converted to peso at the time of purchase.
 Cost of freight, handling or installation (10% of
acquisition cost) – added cost over and above the
price of machinery when delivered and installed at
the site.
COMPUTATION OF ASSESSED VALUE

 AV = MV x AL

 Where: AV – Assessed Value

 MV – Market Value
 AL – Assessment Level not exceeding those
prescribed under the LGC
 REQUIREMENTS TO DECLARE REAL
ESTATE

1. For newly surveyed alienable and disposable

lands(A&D)
-approved survey plan from DENR.
-xerox copy of the Certificate of Title , approved
application or Certification from DENR .
-Sworn statement duly accomplished and signed
by owner, administrator or authorized
representative.
Requirements to declare the real
Estate

2. for new assessment on buildings

- Sworn Statement duly accomplished and
signed by owner.
- inspection report of Municipal Assessor
-picture of the building
-building plan and building permit
-cost estimate of material and labor cost of
the building
Requirements to declare

3. for new assessment on machineries:

- official receipt (OR) of the machinery
- inspection report of the Municipal
Assessor
-Sworn Statement duly signed by the
owner
-freight and handling, insurance ,
brokerage and installation costs
 Importance of taxation

Tax is the lifeblood of the government. It

will be used to finance infrastructure projects
of the government like farm to market roads,
bridges and other structures.
Sharing of the proceeds of the
tax dues

Province - 35%
Municipality - 40%
Barangay - 25%

TOTAL 100%
Tax Rate on RPT

Levy =2% of the assessed value (AV)

1% - Basic Tax
1% - SEF
The Fundamental Principles in the appraisal,
assessment, levy and the collection of the Real
Property Tax

1.Realproperty should be appraised at its

current and fair market value;
2. Real property shall be classified for
assessment purposes on the basis of its
actual use.
Fundamental principles
3. Real property shall be assessed on the
basis of a uniform classification within the
local government unit.

4. The appraisal, assessment, levy and

collection of the real property tax shall not
be let to any private person;

5. The appraisal and assessment of real

property shall be equitable
What is a Real Property Tax?
 Real Property Tax is a regular ad-
valorem tax on real property such
as lands and other improvements,
buildings and other structures, and
machineries, not specifically
exempted by existing laws.
(Ad valorem tax is determined on
the basis of a fixed proportion of the
value of the property).
What is meant by appraisal and
assessment of real property?
 Appraisal is the act or process of
determining the value of property as of a
specific date for a specific purpose.
 Assessment is the act or process of
determining the value of a property, or
proportion thereof subject to tax,
including the discovery, listing,
classification, and appraisal of the
property.
Classification of real properties
for assessment purposes.

 For purposes of assessment, all real

properties such as land and other
improvements, buildings and other
structures, and machineries, shall be
classified as Residential, Agricultural,
Commercial, Industrial, Mineral,
Timberland, and Special. (RACIMTS)
 Public land titling project
RA 10023 Residential Free Patent
-administrative procedure in land titling
- processing of patent in 120 working days at CENRO
level
-covers public land zoned as residential and townsites

DENR – AO NO.2011-06 prescribing the guidelines for the

implementation public land titling in partnership with LGU’s.

Land Classification
47%- Agricultural(agricultural, residential and commercial)
50%- Forest Land
3%- unclassified
Mga sumbanan ug gitugutan nga
sukod sa yuta(residential)

 Alang sa mga dagkong syudad (urbanized

cities) ang sukod dili mulapas sa 200 sqm
 Sa ubang syudad ang sukod dili mulapas sa
500 sqm
 Nag una ug segunda klase(1st,2nd) nga
munisipyo ang sukod dili mulapas ug 750
sqm.
 Sa ubang munisipyo ang sukod dili mulapas
sa 1000 sqm.
 Mga kinahanglanon sa interesadong
aplikante

 Kopya sa aprobadong plano nga gihimo sa usa ka

lisensyado nga geodetic engineer
 Kopya sa technical description sa maong luna sa
yuta nga aplayan (LMB form 700-2A/700-2B)
 Mapa sa yuta (Sketch Map) nga mutudlo sa sa
insaktong utlanan( boundary)
 Affidavit of two disinterested persons
 Alang sa isolated nga application, sertipayan sa
Regional Trial Court nga ang maong luna sa yuta
walay pending nga kaso.
Asa man ta mo apply?

 Bisitahi ang Municipal Assessment Office

(MASSO) sa inyong mga lugar.

 Land Management Unit (LMU) nga

nahimutang sa buhatan sa Provincial
Assessor ning lalawigan sa Agusan del
Sur.
THANK YOU