How much is the real estate (property) tax in the Philippines ?

1. In provinces
- not exceeding 1% of assessed value

2. In cities or, municipalities
- not exceeding 2% of assessed value within Metro Manila

ASSESSMENT LEVELS FOR LAND

The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixes by ordinances of the sangguniang panlalawigan, sangguniang panglungsod or sangguniang bayan of a municipality within Metro Manila Area, at the rates not exceeding the following (Sec. 218, LGTC of 1991)

CLASSIFICATION ASSESSMENT LEVEL
Residential 20%
Agricultural 40%
Commercial, Industrial, Mineral 50%

ASSESSMENT LEVELS FOR IMPROVEMENT

FMV over Not Over Res Com/Ind Agr Timber
175,000 0% 0% 0% 0%
175,000 300,000 10% 30% 25% 45%
300,000 500,000 20% 35% 30% 50%
500,000 750,000 25% 40% 35% 55%
750,000 1,000,000 30% 50% 40% 60%
1,000,000 2,000,000 35% 60% 45% 65%
2,000,000 5,000,000 40% 70% 50% 70%
5,000,000 10,000,000 50% 75% 50% 70%
10,000,000 60% 80% 50% 70%

FORMULAS for Real Estate Taxes

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FMV x AL = AV
Fair Market Value x Assessment Level = Assessed Value

AV x TR = Tax Due
Assessed Value x Tax Rate = Due Date

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DECLARATION OF PROPERTY FOR ASSESSMENT

1. By the owner – must file a sworn declaration of value of the property once every three (3)years, during the period from January 1 to June 30 and every three (3)years thereafter.

2. By the person acquiring real property or making improvement thereon – must file a sworn declaration of the true value of the property within sixty (60) days after the acquisition of the property or upon completion or occupancy of the improvement, whichever comes earlier.

3. By the assessor – If the owner refuses or fails to make such declaration the prescribed time as required, the local assessor may make a declaration of the true value of the property.

GENERAL REVISIONS OF ASSESSMENTS AND PROPERTY CLASSIFICATIONS

The provincial, city or municipal assessor shall undertake a general revision of real property assessments every three (3)years.

DATE OF EFFECTIVITY OR ASSESSMENT OR REASSESSMENT

General Rule – all assessments and reassessments made after January 1 of any year shall take effect on January 1 of the next year.

Other Effective Dates – reassessment which will take effect at the beginning of the quarter following the reassessment which shall be made within ninety (90) days from the date any such cause or causes occured, due to:

a. A partial or total destruction of real property
b. A major change in its actual use
c. Any great and sudden inflation or deflation of real property values
d. Gross illegality of the assessment, or
e. Any other abnormal cause

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