Real Property Tax

The Real Property Tax

The real property tax (RPT) is an annual
imposition on lands, buildings and
improvements.

RPT = FMV x AL = AV X RATE

 Assessment Level
On land
Class Assessment
Levels
Residential 20%
Agricultural 40%
Commercial 50%
Industrial 50%
Mineral 50%
Timberland 20%
 Assessment Level
On building and other structures
 Residential
Fair market value Assessment
Levels
Over Not over
175,000 0%

175,000 300,000 10%

300,000 500,000 20%
500,000 750,000 25%
750,000 1,000,000 30%
1,000,000 2,000,000 35%
2,000,000 5,000,000 40%
5,000,000 10,000,000 50%
10,000,000 60%
 Assessment Level
On building and other structures
 Agricultural

Fair market value Assessment

Levels
Over Not over
300,000 25%
300,000 500,000 30%
500,000 750,000 35%
750,000 1,000,000 40%
1,000,000 2,000,000 45%
2,000,000 50%
 Assessment Level
On building and other structures
 Commercial/Industrial

Fair market value Assessment

Levels
Over Not over
300,000 30%

300,000 500,000 35%

500,000 750,000 40%
750,000 1,000,000 50%
1,000,000 2,000,000 60%
2,000,000 5,000,000 70%
5,000,000 10,000,000 75%
10,000,000 80%
 Assessment Level
On building and other structures
 Timberland

Fair market value Assessment

Levels
Over Not over
300,000 45%
300,000 500,000 50%
500,000 750,000 55%
750,000 1,000,000 60%
1,000,000 2,000,000 65%
2,000,000 70%
 Assessment Level
On building and other structures
 Machineries

Class Assessment levels

agricultural 40%
residential 50%
commercial 80%
industrial 80%
 Assessment Level
On building and other structures
 Special classes (land, buildings, machineries,
other improvements

Class Assessment levels

Cultural 15%
Scientific 15%
Hospital 15%
Local water district 10%
 General Revisions of
Assessments and Property
Classification
The provincial, city or municipal assessor
shall undertake a general revision of real
property assessment within (2) years after the
effectivity of the Code and every three(3)
years thereafter.
 Rates of Levy(Maximum)
Province - 1 % of Assessed Value

Cities/Municipalities within MMA - 2% of

Assessed Value

Additional Levy on RPT for the SEF – 1%

Additional ad Valorem Tax on Idle Lands – 5%

 Idle Land Coverage
a) Agricultural land more than 1 hectare
in area, ½ of which remain
uncultivated.
b) Land other than agricultural more than
1,000 sq. meters in area ½ of which
remain unutilized
c) Residential lots in subdivisions
regardless of area
Distribution of Proceeds
In the case of provinces:
 Province – 35%
 Municipality – 40%
 Barangay – 25%
In the case of cities
 City – 70%
 Barangays – 30% (released 5 days after end of every quarter)
 50% shall accrue to the barangay where the property is located
 50% shall accrue equally to all the component barangays of the city
In the case of a municipality within the MMA
 Metropolitan Manila Development Authority – 35%
 Municipality – 35%
 Barangays – 30% (released 5 days after end of every quarter)
 50% shall accrue to the barangay where the property is located
 50% shall accrue equally to all the component barangays of the municipality
 Interests on Unpaid RPT
Interest – 2% per month not to exceed 36 months or
72%

Discounts for RPT

Prompt payment – 10% maximum
Advanced payment – 20% maximum

Payment of RPT in Installment

1st installment – on or before 31 March
2nd installment – on or before 30 June
3rd installment – on or before 30 September
4th installment – on or before 31 December
 Exemptions from RPT
a) Real property owned by the Republic of the
Philippines
b) All charitable institutions, religious, non-profit
or religious cemeteries
c) All machineries and equipment used by local
water districts and GOCCs, generation and
transmission of electric power
d) Registered cooperatives
e) Machinery and equipment used for pollution
control and environmental protection
Remedies for Collection
of RPT
A. Administrative Remedies
1. Levy on real property, and
2. Sale of real property at public auction
B. Judicial Remedy
 Strategies for RPT
Conduct house to house campaign on all delinquent real
property owners.
Send out notices to all delinquent real property owner and
issue destrain and levy letters.
Hold public auction on delinquent real property owner.
Conduct a physical inventory of all machinery and equipment
in industrial and commercial establishments and countercheck
this with that appearing in the Office of the City Assessor.
Verify from the tax declaration the total value of machinery and
equipment and counter check this with the financial statement.
Enforce additional 5% on the idle land tax.
Republic Asahi Glass Corporation
Tax Deficiency – RPT Machinery and Equipment
Total Market value per Tax Declaration P 585,353,560.00
=====================
Machinery and Equipment per F/S 4,207,497,000.00
Less 5% Depreciation 210,374,850.00
=====================
3,997,122,150.00
Add: Machinery in Transit 67,468,000.000
=====================
Assessment Level P 4,064,590,150.00
80%
=====================
Rate 3%
=====================
RPT Tax due 1998 P 97,550,163.60
Less: 1998 tax paid 16,682,576.52
=====================
Tax due P 80,867,587.08
Add:16% Penalty 12,938,813.93
=====================
Total Tax Due 1998 P 93,806,401.05