‘Updated property values key to investments’

Finance officials endorse legislation barring local government units (LGU) that fail to update their schedule of market valuation (SMV) on real property be denied credit financing from the national government.

Finance Secretary Carlos G. Dominguez III also proposed streamlining the data gathering for the regularly updated SMV as that function is already being done by an adjunct of the Department of Finance (DoF) in coordination with the Bureau of Internal Revenue.

But on the whole, Dominguez supports proposed legislation intending to elevate patently outdated SMV numbers at the moment to present day standards.

“Essentially, real estate is the most valuable asset and biggest financial resource. But its contribution to government revenues, particularly for local governments, has remained dismal due to outdated SMV, poor collection efficiency and tax administration and lack of uniformity in the valuation of real property,” Dominguez said in his letters to three separate legislators.

According to him, there is a need to put in place an “equitable, efficient and transparent valuation system” that has become even more urgent and necessary to “stimulate the property market, attract investments, improve government’s resource mobilization through property taxation and foster greater confidence in the real estate sector.”

This pertains to pending legislative proposals to reform the country’s outdated real property valuation system in hopes of attracting more investments, further invigorate the property market and generate additional revenues for LGU.

Senate Bill 44 filed by Sen. Panfilo Lacson and its counterparts, House Bill 2207 introduced by Speaker Gloria Macapagal-Arroyo and HB 68 by Albay Second District Rep. Joey Salceda have the support of the DoF.

The fundamental valuation reforms being pushed by the government in the real property sector are already outlined in both measures, Dominguez said.

The proposed reforms in the Salceda, Arroyo and Lacson bills aim to adopt international standards in real property valuation and strengthen local autonomy by “setting up a single valuation base for taxation and benchmarking purposes, insulating the valuation process from politics as LGU will continue to regulate tax rates and assessment levels, improving the oversight functions of the national government and establishing an electronic database to support valuation.”

Among the enhancements proposed by Dominguez to SB 44, HB 2207 and HB 68 are: The establishment of a Real Property Valuation Service (RPVS) within the Bureau of Local Government Finance (BLGF), an attached agency of the DoF. While all the three bills provide for the creation of the RPVS, Dominguez has proposed the inclusion of a provision designating counterpart BLGF personnel in the RPVS in the bureau’s regional offices.

With the BLGF serving as the lead agency in implementing the proposed reforms in real property valuation, Dominguez said the DoF is recommending the removal of the provision in SB 44 creating a Regional Technical Committee on Real Property Valuation.

Dominguez said doing away with this committee will streamline the review of the SMV, because the same function will already be performed by the BLGF regional offices in coordination with BIR regional offices.

The DoF has added a proposed provision barring an LGU from receiving any “conditional or performance-based grants or any form of credit financing from the national government” in cases when it fails to update its SMV and conduct a general revision of property assessments every time the Secretary of Finance approves a new set of SMV.