QuestionsQuestions (Republic Act No. 12001)
RA 12001 declares the State’s policy to promote a just, equitable, impartial, and nationally consistent real property valuation based on international valuation standards, while its purposes include establishing Philippine Valuation Standards (PVS), adopting market value as the single base for assessment, strengthening LGU revenue capacity, separating valuation from tax policy administration, creating an electronic real property transactions database, and promoting transparency, research, and innovative digital technology.
“Market value” is the estimated amount for which a real property shall exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing, with both parties acting knowledgeably, prudently, and without compulsion. It is important because RA 12001 requires valuation (for taxable and even exempt properties) to be based on prevailing market values using the PVS.
RA 12001 defines “Assessed value” (taxable value) as market value multiplied by the corresponding assessment level (the percentage applied to market value based on property classifications under the Local Government Code).
The primary implementing agency is the Bureau of Local Government Finance (BLGF) under the Department of Finance (DOF). BLGF leads implementation by developing PVS, reviewing compliance of Schedule of Market Values (SMVs), interpreting valuation policies, providing technical assistance and supervision, maintaining valuation/e-transaction databases, and coordinating SMV procedures and compliance reporting.
RA 12001 reorganizes the BLGF headed by an Assistant Secretary and creates the Real Property Valuation Service (RPVS) within the BLGF. It also requires the creation of a Real Property Valuation Unit (RPVU) under the Office of the Local Assessor in every province and city (municipalities may likewise create one).
The Central Consultative Committee is a forum for setting/adopting international valuation standards and related concerns. It is chaired by the head of BLGF and includes representatives from the BIR, DENR, BSP, national organization of government assessors, ULAP, LRA, private appraisal sector, and real estate sector, with specified qualifications and per diem. The BLGF serves as Secretariat.
Local assessors must prepare proposed SMVs within timelines tied to BLGF notice. Mandatory public consultations must be conducted (at least two, within 60 days before submission). Proposed SMVs must be published at least two weeks prior and posted in conspicuous places. After consultation, the local assessor submits to BLGF Regional Office (or BLGF Central Office for cities and lone MM municipality). BLGF Regional Office reviews/endorses within 45 days; BLGF head reviews/endorses within 30 days. The Secretary of Finance certifies within 30 days; otherwise, existing SMV remains. Approved SMVs take effect 15 days after publication/posting.
The Secretary must order remand to the concerned LGU’s assessor for revision with a written explanation of non-compliance. The assessor may conduct at least one public consultation. The revised SMV must be resubmitted within 30 days; the Secretary decides within 10 days. If no decision is made, the existing SMV remains.
No. Section 14 requires that for valuation purposes, all real properties—whether taxable or exempt—must be valued/appraised based on prevailing market values in the locality, conforming to the PVS, and depreciation must be considered for depreciable assets.
SMVs must be updated by provincial/city/municipal assessors within two (2) years from RA 12001 effectivity. Thereafter, LGUs must update and conduct general revision every three (3) years. BLGF prepares schedules for updating across provinces/cities, including MM and PHIVIDEC areas. The law also allows revisions upon significant market value changes or correction of errors/inequalities, subject to BLGF review.
In times of national emergency declared by the local chief executive (and if national state of emergency, until lifted by the President). For local state of calamity, suspension lasts for 30 days from declaration; BLGF may recommend further extension for another 30 days or during continued existence of calamity, whichever is shorter.
RA 12001 directs BLGF to develop and maintain an up-to-date electronic database of real property transactions and related data (including cost of construction/renovation and prices of machinery/equipment). Officials and LGUs must mandatorily submit documents, subject to Data Privacy Act protections and security rules. Non-submission may lead to administrative penalties under Section 26. It also requires LGUs to automate their real property tax administration operations, with guidance from BLGF and free support (equipment/connectivity/platform and training) from DICT.
Section 23 requires Registers of Deeds to submit to assessors an abstract of the entire registry every three months and copies of contracts selling/transferring/leasing/mortgaging/other conversions every end of month free of fees, including sufficient descriptions, owners, and dates of most recent transfer. Section 24 requires electronic transmission of relevant transaction data quarterly to BLGF by Registers of Deeds, BIR, notaries public, officials issuing building permits, and geodetic engineers, free of charge, based on rules by the Secretary of Finance.
Section 26 imposes a fine equivalent to one (1) month to six (6) months of basic salary or suspension not exceeding one (1) year, or both, plus any applicable criminal/administrative penalties. It covers: (a) failure to provide/furnish required data without justifiable reason; (b) assessor’s failure to comply with valuation standards or concealment of deviations; (c) failure/refusal to prepare/submit/revise/implement SMVs or conduct general revisions within required periods; and (d) failure to review/approve/implement SMVs or cause improper use of SMVs.
Section 27 states that unauthorized processing, accessing, disposal, disclosure, sharing, publication, or use of RPIS data—particularly illegal acts under the Data Privacy Act—shall be punishable according to the Data Privacy Act, its IRR, the Cybercrime Prevention Act, and other relevant laws.
Section 29 limits increases in real property taxes for the first year of effectivity of the approved SMV to a maximum of 6% of taxes assessed before effectivity, applicable per type of real property tax (including SEF, idle land tax, and other special levies). LGUs may enact ordinances to cap increases in succeeding years. Section 30 grants real property tax amnesty covering penalties, surcharges, and interests from unpaid real property taxes prior to RA 12001 effectivity, but only within 2 years after effectivity; it can be paid one-time or via installments. Exclusions: (a) properties already disposed of at public auction for delinquencies; (b) properties whose delinquencies are being paid under a compromise agreement; and (c) properties subject to pending court cases for delinquency.
Section 18(a)(3) provides that for internal revenue tax computation, the Commissioner of Internal Revenue shall use either the SMV or the actual gross selling price stated in real property transaction documents, whichever is higher.