Senate approves bill instituting real property valuation, assessment

The Senate on Monday approved, on the third and final reading, a measure instituting reforms in real property valuation and assessment in the Philippines. 

The Senate Bill 2386, or Real Property Valuation and Assessment Act (RPVARA), has garnered 23 affirmative votes, zero negative votes, and no abstentions during the plenary session.

The measure  was also a priority legislation of the Marcos administration.

Senator Win Gatchalian, who sponsored the bill, said the enactment of the SB 2386 will provide a respite for real property taxpayers as the measure sets a two-year amnesty on interests and penalties for taxpayers with unpaid real property tax.

“Waiving the payment of interests, penalties, and surcharges on unpaid or delinquent real property taxes through the amnesty component of RPVARA would encourage tax compliance later on and significantly enhance the government’s revenue-collection efforts,” he said.

Gatchalian, who chairs the Senate Committee on Ways and Means, said the proposed legislation, once enacted into law, would hasten the automation of services provided by local government units (LGUs), which in turn would enhance the efficiency of tax collection and improve the delivery of public services.

The measure includes creation of Real Property Information System which will maintain an up-to-date electronic database of the sale, exchange, lease, mortgage, donation, transfer, and all other real property transactions and declaration in the country. 

“Through RPVARA, the country will have uniform valuation standards for real property assets, promoting transparency and enhancing confidence among investors,” Gatchalian stressed. 

He added that establishing a standard valuation will foster equity as it will facilitate property rights enforcement, resulting in wealth generation by converting and mobilizing lands and other real property units into economically productive use.

Gatchalian cited the country’s real estate and land enable wealth generation is only at 30.7 percent, lower than the average of major economies in Southeast Asia which is at 35 percent.

Thus, the necessity to establish a uniform valuation standard for real estate in order to attract investments that would make use of real estate assets.

Citing a data from the Philippine Statistics Authority (PSA), Gatchalian pointed that the gross value-added contribution of real estate and ownership of dwelling in 2023 stood at an impressive P1.37 trillion pesos—equivalent to 5.6 percent of our gross domestic product (GDP).

Gatchalian emphasized that real property tax would include other taxes such as Special Education Fund, Idle Land Tax, and other special levy taxes, which can be imposed by an LGU, pursuant to the Local Government Code.