Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 1446)
The main objective is to promote the maximum and efficient utilization of land to support government programs like rural development, low-cost housing, and infrastructure, by imposing an additional tax on idle lands to discourage land speculation and non-productive holding.
An additional ad valorem tax at the rate of five percent (5%) per annum based on the assessed value of the land as determined by the local assessor.
The additional tax began to accrue on July 1, 1978.
Idle lands refer to agricultural lands suitable for cultivation, dairying, fishery, and other uses where at least half remains uncultivated or unimproved. It also includes non-agricultural lands in cities or municipalities over 2,000 square meters where half remains unutilized or unimproved.
Yes. It applies to residential lots in duly approved subdivisions that have been transferred to individual owners, who are liable for the tax. Lots not yet transferred remain part of the subdivision and are taxable to the subdivision operator.
Exemptions include lands that are unimproved due to adverse peace and order conditions, financial losses from natural calamities, ongoing court litigation, necessity to leave land fallow, unfavorable physical conditions making cultivation impossible, and idle subdivision lots due to developer failure to develop the subdivision.
The owner or legal representative must file an application stating the grounds for exemption with the local Assessor within six months from the effectivity of the Decree.
In provinces, 50% goes to the municipality where the property is located and 50% to the province. In cities, all proceeds go to the city. In Metro Manila, 50% goes to the Metropolitan Manila Commission and 50% to the city or municipality.
The Secretary of Finance is tasked to promulgate the implementing rules and regulations.
The Decree took effect immediately upon its signing on June 11, 1978.