Definitions of Key Terms
- Agricultural land: Land devoted to raising crops, pasturing, dairying, fishing, salt-making, including timber and forest lands (Real Property Tax Code, P.D. No. 464 as amended)
- Commercial land: Land primarily used for commercial profit-making purposes, including its improvements (Real Property Tax Code)
- Condominium: An interest in real property consisting of separate units with undivided interest in common areas and land (Condominium Act, R.A. No. 4726)
- Condominium Unit: A designated part of a condominium project used independently, may include multiple rooms/floors and accessories (Condominium Act)
- Improvement: Valuable addition or enhancement to property that improves its value, beauty, or utility beyond mere repairs (Real Property Tax Code)
- Industrial land: Land principally devoted to industrial capital investment, including improvements (Real Property Tax Code)
- Townhouse: An independent dwelling attached by party walls on adjacent lots (Housing and Planning Manual by De Chiara and Koppelman)
Determination of Tax Base: When Zonal Value is Established
- Compute value of improvement either by:
- Selling price less zonal value of land, or
- Construction cost per permit plus 10% per year after construction, or
- Market value per latest tax declaration plus 100%/150%
- Tax base formula: Zonal value of land plus market value of improvement (whichever method yields higher value)
Determination of Tax Base: When Zonal Value is Not Established
- Use either:
- Total selling price per deed of sale, or
- Market value of land plus improvements (construction cost plus 10% annual increase or market value plus 100%/150%)
- Tax base is the higher of these values
Market Value of Land
- Add 100% to market value per latest tax declaration generally
- For commercial, industrial, agricultural devoted to fishpond or prawn farm, add 150%
Market Value of Improvement
- For improvements constructed 1986 to 1990:
- Use construction cost from building/occupancy permit plus 10% per year after construction
- For places without permits outside NCR and chartered cities, use market value plus 100%
- Add 150% for commercial, industrial, and agricultural fishpond/prawn farm
- For improvements constructed 1985 and earlier:
- Use market value per latest tax declaration plus 100%, or plus 150% for commercial, industrial, and agricultural fishpond/prawn farm
Additional Requirements on Transfer or Disposition
- If property has no improvements, taxpayer must submit an affidavit or certification from local assessor confirming no existing improvements
Amendatory and Effectivity Provisions
- This Order amends previous RMO 3-87, RAMO 1-88, and other inconsistent issuances
- Effective immediately upon adoption on February 18, 1991