Question & AnswerQ&A (DOF LOCAL ASSESSMENT REGULATIONS NO. 1-92)
A general revision of real property assessments must be undertaken within two years after the effectivity of the Local Government Code of 1991 and once every three years thereafter by the provincial, city or municipal assessor.
The primary purpose is to equalize and update valuations, rediscover properties lost from the tax roll, and purge double assessments of destroyed properties, akin to a periodic physical inventory.
Schedules of market values for different classes of real property must be prepared and submitted to the sanggunian concerned for enactment by ordinance not later than October 31 of the first year, after which the sanggunian has 90 days to review them for conformity.
Expenses must be covered by appropriations provided by the sanggunian of provinces, cities, and municipalities and apportioned by ordinance equally between province and municipalities, with municipal shares based on taxable area proportion.
Assessment can be increased more often in cases of new improvements substantially increasing property value or changes in actual use.
Back taxes not exceeding ten years may be assessed on undeclared property based on the applicable market value schedule in force during the corresponding period.
If back taxes are paid on or before the end of the quarter following receipt of the notice, no interest is imposed. Otherwise, a 2% monthly interest or fraction thereof applies from receipt of assessment until full payment.
Notices must be given within 30 days of assessment and may be served personally, to occupants, via mail to last known address, or with assistance of the punong barangay, with required documentation to prove receipt.
Real property is classified, valued, and assessed based on its actual use, regardless of location, ownership, or user.
Residential lands shall be assessed up to a maximum of 20% of their fair market value.
The lot is divided into strips by depth, with each strip assigned a percentage value decreasing from the street frontage inward, and the unit value per square meter adjusted accordingly.
The three approaches are Sales Analysis Approach (Market Data), Income Capitalization Approach, and Replacement or Reproduction Cost Approach.
Buildings are classified by structural design and intended use, e.g., residential (one-family, two-family), commercial (store, office), industrial (factory), and farmhouses.
Assessment level is the percentage applied to the fair market value to determine the taxable or assessed value of the property.
Undeclared buildings and improvements subject to back taxes are valued according to the current schedule of base unit construction cost and assessed like similar properties, recognizing depreciation.
Depreciation is accounted for by a schedule prepared by the assessor, using combined observed depreciation and effective age methods, to reflect reduced value due to wear and tear.
Interest at 2% per month or fraction thereof applies from the date of receipt of the assessment until full payment if not paid by the deadline.
Form RPA Form No. 2, marked Annex "H," is prescribed for notices of assessment and may be mimeographed by assessors.
All assessments made after January 1 take effect on January 1 of the succeeding year, except for reassessments due to destruction, change of use, or abnormal causes which have different effective dates.
In mixed land use areas, the predominant use governs classification and assessment; for example, if residential use predominates, lands will be assessed as residential.