President Ferdinand Marcos Jr. signed into law on Thursday the Real Property Valuation and Assessment Reform Act (RPVARA) aimed at modernizing the country’s real estate landscape.

The new law, Republic Act 12001, replaced the outdated valuation system with a uniform real property appraisal system that, its proponents said, adheres to international standards.

The RPVARA also establishes market value as the sole basis for assessing real property taxes.

“This new law is born of the necessity to enhance the country’s tax collection system. We can generate revenue, jobs, and investments all over the country,” Marcos said.

“No longer will we rely on the outdated valuation system,” he added.

To encourage taxpayer compliance, the RPVARA offers a two-year amnesty on interest and penalties for those with unpaid real property taxes.

“We hope this will encourage and instill long-term and consistent tax compliance,” Marcos said.

The new law, the President said, is one of his administration’s priority legislations and is included in the Common Legislative Agenda.

Negros Region Act

Marcos congratulated both chambers of Congress on the passage of the law, as well as of the Negros Island Region (NIR) Act.

The NIR Act places the provinces of Negros Oriental, Negros Occidental and Siquijor under one region where before they were under separate regions.

“And I call on all government agencies to efficiently and effectively implement the newly enacted laws to their fullest extent so our people may reap their benefits at the soonest possible time,” Marcos said.

Senator Win Gatchalian, who sponsored the valuation bill, had explained that the RPVARA “adopts market value as the single valuation base for the assessment of real property tax.”

Gatchalian said the RPVARA waives numerous fees.

“Waiving the payment of interest, 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,” Gatchalian said.

He said the country’s real estate enabled wealth generation at 30.7 percent, lower than the Southeast Asian average of 35 percent, highlighting the need for a uniform valuation to attract investments in real estate assets.

He noted that the Philippine Statistics Authority reported that real estate and home ownership contributed P1.37 trillion to the gross domestic product in 2023, or 5.6 percent of GDP.