Philippine regulators back extended timeline for property valuation reform
The Department of Finance and Bureau of Local Government Finance have told a Congressional hearing they support extending compliance timelines for the Real Property Valuation and Reform Act. Unreliable market data, stalled local government automation and failed valuation testing prompted the move. T
The Department of Finance (DoF) and the Bureau of Local Government Finance (BLGF) have told a Congressional hearing that they support extending the compliance timelines for the Real Property Valuation and Reform Act (RPVARA), citing unreliable property market data and stalled local government automation efforts. At a 10 Nov hearing convened by the House Committee on Government Reorganization, officials said the extension is needed to ensure the technical integrity of market valuations and shield property owners from unvalidated tax adjustments.
“We support the proposed extension of the implementation timelines under the RPVARA,” said Undersecretary Krystal Lyn T. Uy. “We recognize that RPVARA is an important reform. At the same time, the success of any reform must be measured not merely by the timeliness of its implementation but by the quality and sustainability of its outcome.” All 233 local government units (LGUs) have submitted their proposed Schedules of Market Values (SMVs), though none has been approved to date.
Ms Uy said a review turned up incomplete land value maps, unverifiable sales data, and reliance on secondary sources such as sworn statements and opinion values rather than actual transaction records. Evaluators also identified income computation errors in agricultural land valuation, missing capitalization rates, and outdated sales transactions extending beyond the prescribed three-year valuation window. Valuation testing failed to meet statutory standards, with errors exceeding the 10 per cent allowable margin of error and coefficients of dispersion surpassing the 20 per cent standard threshold.
“The proposed deferment is, therefore, not a retreat from the reforms sought by RPVARA, but a tactical move towards ensuring that the reform achieves its intended objectives,” Ms Uy stressed. BLGF Executive Director Wryan Martin C. Te warned legislators that prematurely enforcing unvalidated SMVs poses substantial risks for property owners, businesses and local governments alike. Section 18 of Republic Act No. 12001 makes certified SMVs the mandatory valuation baseline for local real property taxes and national property-related assessments, including capital gains tax, documentary stamp tax, estate tax, donor’s tax and local transfer tax.
“Considering the prevailing economic conditions, elevated inflation, and the impact of recent calamities, a time-bound extension will provide a more gradual and manageable transition for property owners, taxpayers, and businesses,” Mr Te said. He added that a carefully calibrated timeline would help mitigate the risk of abrupt increases in property-related tax liabilities while allowing stakeholders time to prepare.
Legislators were also briefed on the slow progress of LGU digital transformation. Neil A. Lamban, BLGF Local Assessment Operations Divisions chief, estimated the LGU digitalisation rate at around 50 per cent. The BLGF is currently testing prototype software for the Real Property Information System and Computer-Aided Mass Appraisal in 22 pilot LGUs in a program supported by the Asian Development Bank. “Given the right manpower, (technology) skills in the LGU plus the equipment provided by the LGU or any National Government agency… I think it would take the suggested two years, more or less, for the full implementation of digitalisation because every LGU’s capacity is unique,” Mr Lamban said.
Philippine Tax Academy Chancellor Ma. Pamela P. Quizon advised that the transition period should match the duration of comprehensive multi-agency training. “Whatever transition period Congress ultimately adopts, PTA submits that it must not become our waiting time. Let us use this for our active readiness,” Ms Quizon said, adding that training efforts must extend beyond assessors and treasurers to include private appraisers, real estate developers, banking institutions and assessment appeals boards.
