DAR Land Valuation Rules Amendment 1992

Section 17 of RA 6657 guides valuation considering acquisition cost, value of comparable properties, nature, use, income, owner's sworn valuation, tax declarations, and government assessments.
Socio-economic contributions of farmers and government, and unpaid taxes or loans on the land, also factor into valuation.

The land valuation process must involve agrarian reform beneficiaries, farmer and farmworker organizations, Barangay Agrarian Reform Committees, the Department of Agrarian Reform (DAR), and the Land Bank of the Philippines (LBP).
EO No. 129-A and RA 6657 mandate institutional partnerships and the involvement of Barangay Agrarian Reform Committees in the value determination.
Compensation amount is to be agreed upon among the landowner, DAR, and LBP.

A basic valuation formula applies to both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA): LV = (CNI × 0.6) + (CS × 0.3) + (MV × 0.1) where LV = Land Value; CNI = Capitalized Net Income; CS = Comparable Sales; MV = Market Value per Tax Declaration.
Adjusted formulas exist when some factors are unavailable.
The adopted land value is the lesser of the computed value or the Declared Value by the landowner, adjusted for inflation using the Regional Consumer Price Index (RCPI).

CNI equals net income (gross sales less operating costs) capitalized at 12%.
Gross sales calculated from average gross production times average selling price, with data sourced from government reports or local sources.
If costs cannot be verified, an assumed net income rate is used: 20% generally, 70% for coconut plantations.
The landowner must submit detailed income and cost data; verification involves farmer consultations.
Special provisions for permanent crops, intercropping, and unproductive crops exist, including substitution of cumulative cost for unfruitful trees.
For leased lands, lease rental income is used in lieu of production data.

CS depends on sales transactions, acquisition costs, and market values based on mortgages.
At least three comparable sales transactions, involving land areas of at least one hectare, must be considered.
Comparable sales should closely match the subject property's characteristics—topography, land use, crop type, productivity stage.
Sales data must be recent, from January 1, 1985 to June 15, 1988, and indexed for inflation.
Acquisition cost and mortgage-based market value are supplementary inputs when sales data are insufficient.

MV is based on pre-EO 229 tax declaration values, adjusted for inflation.
Adjusted for actual land area and classification determined by ocular inspection.
For unproductive trees, only land value counts; for productive trees, valuation considers land productivity classification.
Value of trees introduced by beneficiaries is excluded.

The LBP is responsible for valuing non-crop improvements.
Landowners are not compensated for improvements made or contributed by the government or farmer-beneficiaries.

LBP may issue clarifying guidelines for implementation.
All pending claims with unprocessed valuations must conform to these amended rules.
The Order repeals or amends inconsistent prior administrative orders.
Effective ten days after publication in two national newspapers.