The Department of Finance (DOF) clarified that the recently enacted Real Property Valuation and Assessment Reform Act (RPVARA) will not automatically result in higher real property taxes, stressing that local government units (LGUs) retain full authority to adjust assessment levels and tax rates based on local priorities and fiscal needs.

Speaking at the National Executive Forum of Governors and City Mayors on RPVARA implementation last Thursday, Finance Secretary Frederick Go, represented by Finance Undersecretary and Chief Economist Domini Velasquez Go, underscored the crucial role of LGUs in carrying out the reform, which seeks to establish a uniform property valuation system nationwide.

“RPVARA does not mean an increase in real property tax. This is a common misconception surrounding the law. There is an assumption that once market values are updated, taxes will shoot up. The authority to determine assessment levels and tax rates remains exactly where it has always been, which is with local governments,” Go said.

The law aims to align property values with current market conditions, replacing outdated and inconsistent assessments that have long complicated property taxation and investment decisions.

According to the DOF, RPVARA is designed to create a fairer, more transparent and investment-friendly property valuation framework while strengthening public confidence in the system and improving the delivery of local services.

Signed into law in 2024, RPVARA seeks to modernize and standardize real property valuation and assessment across the Philippines. The measure addresses long-standing issues arising from outdated and inconsistent property values among LGUs by adopting a uniform, market-based valuation system guided by Philippine Valuation Standards. It also strengthens the role of the Bureau of Local Government Finance (BLGF), requires the regular updating of Schedules of Market Values (SMVs), and establishes a single valuation base for government transactions involving real property.

Go emphasized that LGUs retain fiscal autonomy under the law and may calibrate assessment levels, tax rates, or both depending on their financial position and development priorities.

“Updated market values do not automatically translate to higher real property taxes,” he said, noting that local governments may lower assessment levels or tax rates to reduce the tax burden on property owners.

To support implementation, the DOF said the BLGF will provide technical assistance and capacity-building programs to help LGUs transition to the new system.

“We will help you navigate the transition, address challenges, and build the capabilities needed to sustain this reform. We want every LGU to have the confidence, capability, and support to make RPVARA work for your communities and for the growth of your municipalities,” Go said.