Republic of the Philippines Ls oN
House of Representatives /” RECEIVED
Quezon City = are: 2 %
Eighteenth Congress
First Regular Session
2400
House Bill No.

Introduced by Representatives
Estrellita B. Suansing and Horacio P. Suansing, Jr.

EXPLANATORY NOTE

Real property is the country’s most important resource and biggest
financial asset. A World Bank study indicated that 50% to 75% of the national
wealth is contained in land alone. Real property, therefore, has the largest
potential contribution to national income for funding economic and social
developments.

One of the principal sources of income of local government units (LGUs)
is derived from the taxes imposed on real properties. The LGU Taxation and
Revenue Practices report of the Bureau of Local Government Finance (BLGF)
shows that, on the average, real property taxes contribute about 31% of the
LGU’s local sources over the period of 2009 to 2014.

While the LGUs are given powers by the Local Government Code of 1991
to generate local income in order to be effective partners in nation building, it
is a fact that there are still municipalities that remain dependent on national
government revenues. BLGF data shows that, of the 286 first class
municipalities in the country, 116 municipalities (40%) remain dependent on
their share from the Internal Revenue Allotment (IRA). This dependence is
partly because 199 municipalities (70%) have poor collections for real
property taxes, making up less than 15% of their respective local incomes.

Hence, this proposal seeks to promote the development and
maintenance of just, equitable, impartial, and nationally consistent real
property valuation by establishing appraisal standards, methods and
procedures of property valuations and assessment. The bill’s enactment will
assist the LGUs in maximizing revenue collections, which in turn, will
promote genuine local autonomy.



‘The passage of the proposed Real Property Valuation and Assessment
Reform Act is intended to resolve the following issues in the present valuation
system, to wit:

1. Multiple land valuation systems and methodologies used by at
least 23 national government agencies and 1,712 LGUs, including private
individuals and institutional appraiser — each using their own systems and
measures, resulting in as many conflicting values for the same piece of real
property;

2. Multiple impositions of national and local taxes on land and
property ownership and transactions which encourage tax evasion and
rampant underreporting of sales prices in official documents;

3. Lack of valuation standards, formal education and training for
valuers resulting in incompetence and outdated techniques in the appraisal
practice;

4. Undervaluation and overvaluation of real properties for tax
purposes causing unnecessary delays and huge financial losses in the form
of foregone government revenues and cost overruns;

5. Outdated real property values which no longer capture the true
economic realities in the community where the property is situated; local
governments fail to revise the Schedule of Market Values, as required by
Republic Act No, 7160, otherwise known as the Local Government Code of
1991, as basis for local real property taxation, due to political ambivalence
and apprehensions of political backlash; and

6. Distorted real property transactions database due to cluttered
real property sales transactions among various groups and individuals, e.g.
the assessors, the Registry of Deeds, the Bureau of Internal Revenue, bank/s,
among others.

This bill has been approved on third and final reading during the 17”
Congress. In view of the foregoing, immediate approval of this bill is earnestly
sought.

IG REP. HORAGPE suANSING, JR.
1%t District, Nueva Ecija] 24 District, Sultan Kudarat


worn

1
2

13
14
15

16
17
18

19
20
2

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City
EIGHTEENTH CONGRESS
First Regular Session

House Bill No, 7400

Introduced by Representatives
ESTRELLITA B. SUANSING AND HORACIO P. SUANSING, JR.

AN ACT
INSTITUTING REFORMS IN REAL PROPERTY VALUATION AND
ASSESSMENT IN THE PHILIPPINES, REORGANIZING THE BUREAU OF
LOCAL GOVERNMENT FINANCE, AND APPROPRIATING FUNDS
THEREFOR

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “Real Property
Valuation and Assessment Reform Act.”

ARTICLE I
DECLARATION OF STATE POLICY AND OBJECTIVES,
AND DEFINITION OF TERMS

SEC. 2. Declaration of Policy and Objectives. - It is the policy of the State
to promote the development and maintenance of a just, equitable, impartial,
and nationally consistent real property valuation based on internationally
accepted valuation standards, concepts, principles, and practices. Towards
this end, the State shall:

(a) Establish and maintain standards to govern the valuation of real
property in the country;

(b) Adopt market value as the single real property valuation base for
the assessment of real property related taxes in the country, and for the
valuation of real property for various transactions by all government agencies;

(©) Promote the fiscal autonomy of local government units to provide
basic services to their constituency by enhancing their capacity to generate
local revenues from real property;

(4) Separate the function of valuation of real properties from the
functions of tax policy formulation and the administration of the taxes due
thereon;


w NN

ware

oe
12

13
14
15
16

7
18

19
20
21

22
23
24
25

26
27
28
29

30
31

32
33

35

36
37
38
39

(©) _ Support the development and professionalization of the valuation
practice in the country pursuant to Republic Act No. 9646, otherwise known
as the “Real Estate Service Act of the Philippines.”

() Provide a comprehensive and up-to-date electronic database of
all real property transactions;

(g) Support the development of an information database on valuation
through continuing research and monitoring of new developments in the
discipline to upgrade the country’s valuation system to be at par with global
standards; and

(h) Ensure transparency in real property transactions to protect the
public interest and develop confidence in the valuation system.

SEC. 3. Definition of Terms. - As used in this Act:

(a) Appraiser, also known as valuer, refers to a person who conducts
valuation; specifically, one who possesses the necessary qualifications,
license, ability, and experience to execute or direct the valuation of real
Property;

(b) Assessed value, also known as taxable value, refers to the market
value of the property multiplied by the corresponding assessment level;

(c) Assessment refers to the act or process of determining the value
of a property, or proportion thereof, subject to taxation, including the
discovery, listing, classification, and appraisal of properties;

(@) Assessment Level refers to the percentage applied to the market
value to determine the taxable value of the property based on property
classifications as prescribed in Republic Act 7160, otherwise known as the
Local Government Code of 1991, as amended;

(6) Assessor refers to an official in the local government unit (LGU)
who is a licensed appraiser and performs appraisal and assessment of real
properties, including plant, machinery, and equipment, essentially for
taxation and other purposes;

() Building refers to a man-made structure permanently attached
to land for residential, commercial, industrial, recreational or other purposes;

(2) Improvement refers to a valuable addition made to a property or
an amelioration in its condition, amounting to more than a mere repair or
replacement of parts, involving capital expenditures and labor intended to
enhance its value, beauty or utility or to adapt it for new or further purposes;

(h) International Valuation Standards refer to standards that provide
property valuers with a framework composed of recognized principles and
concepts as well as internally accepted definitions, best practices, and
reporting system;


() Land refers to one of the major factors of production which is
supplied by nature without the aid of man. Land may include not only the
earth’s surface, both land and water, but also anything that is attached to the
earth’s surface including all natural resources in their original state, such as
mineral deposits, wildlife, and timber;

() Machinery refers to machines, equipment, mechanical
contrivances, instruments, appliances or apparatus which may be attached,
permanently or temporarily, to the real property. It includes the physical
facilities for production, the installations and appurtenant service facilities,
those which are mobile, self-powered or self-propelled, and those not
permanently attached to the real property which are actually, directly, and
exclusively used to meet the needs of the particular industry, business or
activity and which by their very nature and purpose are designed for, or
necessary to its manufacturing, mining, logging, commercial, industrial or
agricultural purposes;

(k) Market value refers to the estimated amount for which a property
shall exchange on the date of valuation between a willing buyer and a willing
seller in an arm’s length transaction which is a transaction between
independent, unrelated parties involving no irregularity, after proper
marketing wherein the parties had each acted knowledgeably, prudently, and
without compulsion;

() Private appraisal sector refers to licensed non-governmental real
estate service practitioners who have been active in the practice of real estate
appraisal for at least five (5) years;

(m) Real estate refers to the land and all those items which are
attached to the land. It is the physical, tangible entity, together with all the
additions or improvements on, above or below the ground;

(n) Real property refers to all the rights, interests and benefits related
to the ownership of real estate. It is a legal concept distinct from real estate,
which is a physical asset;

(0) Schedule of Market Values, hereinafter referred to as SMV, refers
to a table of base unit market values for all kinds of real property, except
machinery within a local government unit prepared by assessors pursuant to
existing laws, rules and regulations;

(p) Special purpose property refers to a property that is designed,
constructed and developed for a specific use or purpose. By its very nature
this type of property is rarely offered for sale in the open market except as
part of a going concern. Due to the special design and the function, conversion
of special purpose property to other types of development or application is
generally not economically feasible; and


wewne

o

10
oa
12
13

14
15
16
7
18

19
20
2
22
23
24
25

26
27
28

29
30
31
32

33

35
36
37

(q@)_ Valuation, also known as appraisal, refers to the systematic,
analytic and logical analysis of the recording or property facts, circumstances,
investments and other relevant data resulting in a supportable estimate or
professional opinion of the value of the property as of a specific date and for
a specific purpose.
ARTICLE IL
THE BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF)
Chapter I
BLGF Central Operations

SEC. 4. Powers and Functions of the Bureau of Local Government
Finance (BLGF). - The BLGF of the Department of Finance (DOF) shall lead
and manage the implementation of the provisions of this Act. It shall have the
following powers and functions:

(a) Develop, adopt, and maintain valuation standards consistent
with generally accepted international valuation standards, regulations, and
specifications for real property appraisal used for taxation and other
purposes, and ensure compliance therewith by Local Government Units and
other concerned parties;

(b) In coordination with the Bureau of Internal Revenue, review and
ensure that the Schedule of Market Values (SMVs) as prepared by the
provincial assessors, together with municipal assessors, and city assessors,
including the municipal assessors in the Metropolitan Manila area, is
compliant with real property valuation policies and standards, and
recommend its approval to the Secretary of Finance for local and national
taxation, and for other purposes;

() Provide technical assistance on real property appraisal matters
to government agencies and instrumentalities, and coordinate or conduct the
valuation of special purpose property, when requested;

(@) Provide leadership and policy direction to LGUs on real property
valuation for taxation and other purposes, including the development and
maintenance of valuation standards, the regulation of valuation activities and
other related matters, and the promotion of valuation training and seminars;

(©) Maintain a roster of licensed local government appraisers and
assessors;

() Develop and maintain a comprehensive and up-to-date electronic
database of real property transactions and prices of materials for buildings,
machinery, and other structures;


wn

aus

on

10
1

12
13
14
15

16
7
18
19

20

2
22
23
24

25
26

27
28
29

(g) Conduct continuing study and research on valuation, and
maintain information on current global and country trends and developments
in real property valuation;

(h) Formulate and provide for uniform procedure on the different
transactions in the assessor's office, including the transfer, annotation, and
issuance of tax declarations;

(i) Determine, fix, and collect a reasonable amount to be charged as.
administration fees, fines, and penalties relative to the implementation of this
Act; and

() Perform such other functions as are necessary, proper, and
incidental to implement the provisions of this Act.

SEC. 5. Establishment of the Real Property Valuation Service. - To
achieve the policies and objectives declared in this Act, the Real Property
Valuation Service, hereinafter referred to as the RPVS, within the BLGF with
counterpart personnel in the BLGF Regional Office is hereby established.

SEC. 6. The BLGF Executive Director. — The BLGF Executive Director shall
be responsible for the efficient and effective day-to-day performance of the
responsibilities set forth in this Act and shall be responsible for the overall
internal management and governance of the RPVS.

SEC. 7. Creation of a Central Consultative Committee. —

(a) A Central Consultative Committee shall be created and shall
serve as the consultative forum on matters pertaining to the setting, adoption,
and maintenance of the valuation standards and other related concerns on
real property valuation.

(b) _ It shall be chaired by the BLGF Executive Director and shall be
composed of a representative each from the:

(1) Bureau of Internal Revenue (BIR);

(2) Department of Environment and Natural Resources (DENR);
(3) Bangko Sentral ng Pilipinas (BSP);

(4) National organization of government assessors;

(5) National organization of appraisers in national government
agencies; and
(6) Private appraisal sector.
(©) The representatives of the BIR, DENR, and BSP must be
performing valuation-related functions. The national organization of

government assessors, and the private appraisal sector shall be represented
by their respective heads of organization.


Carn vewne

1
12

13
14
15

16
7

18
19
20

2
22

23
24

25
26
27

28
29

30

31
32
33

35
36

(4) The Chairperson and members of the Committee shall not receive
additional salary for the performance of their functions. Members of the
consultative committee who are not incumbent government officials or
employees shall be entitled to honoraria, pursuant to existing laws and
regulations.

(e) The Committee shall meet at the initiation of the Chairperson at
least once every semester and shall have as many meetings as the
Chairperson may deem necessary for the adoption of valuation standards. The
Chairperson may invite resource persons on issues concerning real property
valuation.

Chapter 2
BLGF Regional Operations

SEC. 8. Role of the BLGF Regional Offices. — The BLGF Regional Offices,
through the Regional Director, shall be responsible for all matters relating to
the valuation and the supervision of the SMVs in the region. They shall:

(a) Implement policies, plans, programs, rules and regulations on
real property valuation of local government units in the region;

(b) _ Review, in coordination with the BIR, and endorse to the RPVS,
the proposed SMVs prepared by the assessors of the local government units
in the region;

(<) Provide for economical, efficient and effective valuation services
in the region;

(4) Coordinate and consult with other government departments,
bureaus and agencies within the region dealing with real property valuation;

(e) Adopt and maintain a comprehensive and up-to-date electronic
database of all regional real property-related transactions, and have custody
of all transaction records submitted by local government assessors; and

() Perform other functions as may be assigned by the BLGF
Executive Director.

SEC. 9. The Regional Consultative Committee. —

(a) There shall be a Regional Consultative Committee that shall be
chaired by the BLGF Regional Director and shall be composed of a
representative from the:

(1) BIR - Regional Office;
(2) DENR ~ Regional Office;

(3) Head of Regional organization of government assessors;



(4)Head of Regional organization of national government
appraisers;

(5) Head of the private appraisal sector within the region; and

(6) Head of the bankers association within the region.

(b) The members of the Regional Consultative Committee must be
performing valuation-related functions in their respective agencies
or sector.

(c) The Committee shall meet at the initiation of the BLGF Regional
Director at least once every quarter and shall have as many meetings
as the BLGF Refional Director may deem necessary for the
performance of its function. The BLGF Regional Director may invite
resource persons on issues concerning real property valuation.

SEC. 10. Function of the Regional Consultative Committee. - The
Regional Consultative Committee shall serve as a consultative forum in the
region for discussion on developments in the local real property market;
concerns of taxpayers, civil society, and other stakeholders; outcome of
compliance reporting in the region; level of complaints and appeals; training
of local government assessors in the region; appraisal and assessment
concerns in general; and other matters as may be determined by the
Committee.

ARTICLE I
VALUATION OF REAL PROPERTIES
Chapter 1
Valuation Standards and Market Values

SEC. 11. Development of Valuation Standards. — Notwithstanding the
provisions of existing laws to the contrary, the BLGF shall develop, adopt,
maintain, and implement uniform valuation standards which shall be used
by all appraisers and assessors in the local government units and other
concerned parties in the appraisal or valuation of lands, buildings, machinery
and other real properties for taxation and other purposes. The valuation
standards shall conform with the generally accepted international valuation
standards and principles.

SEC. 12. Valuation of Real Property. - For valuation purposes, all real
properties, whether taxable or exempt, shall be valued or appraised based on
prevailing market values in the locality where the property is situated, in
conformity with the valuation standards adopted pursuant to this Act. The
Secretary of Finance shall promulgate the rules and regulations for the
valuation of real property pursuant to the provisions of this Act.


wewne

ware

oe
12
13
4

15
16
7
18

19
20
21

2
23
24

25
26
27
28
29
30
31
32
33

35
36
37

39

41
42

For real property intended for low-cost or socialized housing and other
programs of the government imbued with social policy objectives, the
provision of existing pertinent laws shall be applied after determination of the
prevailing market value of these properties in accordance with generally
accepted international valuation standards.

SEC. 13. Preparation of Schedule of Market Values. — The provincial
assessors together with city and municipal assessors, including the municipal
assessors in the Metropolitan Manila Area, shall prepare the SMV for the
different classes of real property situated within their respective local
government units, pursuant to the valuation standards, rules, regulations
and other specifications set by the DOF. The proposed SMV shall be
submitted to the BLGF Regional Office and the BIR Regional Office for their
joint review and to ensure that the SMV complies with other requirements
within ninety (90) days from the receipt of the BLGF and BIR Regional Offices.

SEC. 14. Approval of Schedule of Market Values. - The Secretary of Finance
shall approve the SMV within sixty (60) days from receipt of the joint
endorsement of the BLGF Executive Director and the Commissioner of
Internal Revenue; otherwise, said schedule shall be deemed approved.

‘The approved SMV shall be published by the DOF in the Official Gazette
or in at least two (2) newspapers of general circulation. The SMV shall take
effect fifteen (15) days after its publication.

‘The DOF shall post the approved SMV in its official website and shall
furnish the concerned local government unit, through the BLGF and the BIR,
with copies thereof.

SEC. 15. Setting Assessment Levels of Tax Rates. — The approved SMV
shall be transmitted to the concerned assessor who shall confer with the local
chief executive regarding the approved SMV. The assessor, in coordination
with the local treasurer, shall estimate the tax impact of the new SMV as
against the existing assessment levels and tax rates, calculate the expected
level of tax burden that the taxpayers will bear based on the new SMV and
recommend amendments on the assessment levels and/or tax rates. The
assessor shall prepare a minimum of three estimates of the tax impact based
on different scenarios and submit the tax impact report to the local chief
executive and the Sanggunian.

‘The local chief executive shall transmit the approved SMV, together
with the tax impact report, within fifteen (15) days from receipt of the same to
the Sanggunian for the enactment of an ordinance setting the appropriate
assessment levels and tax rates. During the Sanggunian’s deliberations prior
to the enactment of the tax ordinance, it may call upon the assessor to provide
technical assistance and calculate the tax impact of additional options in
order to arrive at a desired level of taxes that the Sanggunian will adopt. The
concerned Sanggunian shall enact the tax ordinance upon conduct of public


waorvauns

u
2
23
4
15
16

7
18
19

20
21
22
23
24

25
26
27

28
29
30
31

32
33
35
36

37
38
39

41

hearings and proper consultations within sixty (60) days from receipt thereof;
otherwise, the existing ordinance on assessment levels and tax rates shall
remain in force and effect.

Upon the enactment by the Sanggunian of an ordinance for the
assessment levels and tax rates, the local chief executive shall act within ten
(10) days, in the case of cities and the municipality in the Metropolitan Manila
Area, or within fifteen (15) days, in the case of provinces, to approve the same.
Failure of the concerned local chief executive to act on the ordinance within
the prescribed period shall render the same approved.

SEC. 16. Publication of Assessment Levels and Tax Rates. - The approved
ordinance for the assessment levels and tax rates shall be published by the
concerned local government unit in a newspaper of local circulation once a
week for two (2) consecutive weeks: Provided, That in provinces, cities, and
municipalities where there are no newspapers of local circulation, the same
shall be posted in the provincial capitol, including all concerned city halls,
municipal halls, and in two (2) other conspicuous public places therein.

SEC. 17. Use of Schedule of Market Values. — The approved SMV shall be
used as basis for the determination of real property-related taxes of national
and local governments, as follows:

(a) For purposes of real property taxation, the approved SMV shall
in no case be adopted by the local government unit less than six (6) months
prior to the effectivity of the new assessment rates to ensure the proper
cleansing and updating of records, and notification of property owners in the
conduct of general revision of assessment and property classification;

(b) In computing any internal revenue tax, the BIR Commissioner
shall use the SMV, or the actual gross selling price in consideration, as stated
in real property transaction documents, whichever is higher;

(c) _ For other purposes, such as local transfer tax, tax on sand and
gravel, community tax, fees and charges, or as benchmark for real property
appraisal of other government agencies, the approved SMV may be used upon
its effectivity.

Notwithstanding the provisions of existing laws to the contrary, the
failure to conduct a general revision of assessment and property classification,
and use of the SMV shall render a local government unit ineligible for any
conditional or performance-based grants or to contract any form of credit
financing from the national government.

SEC. 18. Updating of Schedule of Market Values. ~ All provincial assessors,
together with the city assessors, including the municipal assessors in the
Metropolitan Manila Area, shall update their respective SMVs within two (2)
years from the effectivity of this Act. Thereafter, they shall update the SMVs
and conduct general revision of property assessments not earlier than three


waor]9H.s

1
2

13
14
15
16
7
18
19

20
2

22
23
24
25
26

27
28
29

31
32
33
34
35

36
37
38
39

41
42

(3) years, but not later than five (5) years, from the date of last revision. The
BLGF shall prepare the schedule for the updating of the SMVs in all provinces,
cities, and municipalities within the Metropolitan Manila Area.

In case of any significant change in market value where the property is
located after the SMVs have been approved and prior to next revision, or
where correction of errors and inequalities in any SMV is deemed necessary
or upon the directive of the Secretary of Finance, the provincial assessors
shall, together with the city assessors, and the municipal assessors, including
the municipal assessor in the Metropolitan Manila Area, recommend revisions
to their existing SMVs to the BLGF Regional Office, through the Regional
Director of the BLGF having jurisdiction over the local government unit
concerned.

SEC. 19. Conduct of Capacity Building Interventions. - The BLGF shall,
in coordination with the Philippine Tax Academy of the DOF, develop and
conduct the necessary training for all local assessors, local officials, and staff,
and other concerned BIR personnel on the preparation of the SMV in
accordance with generally accepted international valuation standard,
concepts, principles and practices; conduct of SMV impact studies,
preparation of compliance reports, and other subject areas.

Chapter 2
Development and Maintenance of Real Property Market Database

SEC. 20. Development of Real Property Information System. —- The BLGF
shall develop and maintain an up-to-date electronic database of the sale,
exchange, lease, mortgage, donation and all other real property transactions
and declarations in the country and on the cost of construction or renovation
of buildings and other structure, and on prices of machinery.

For this purpose, the BLGF shall require the mandatory submission of
necessary documents from the concerned officials or employees of national
government offices or instrumentalities, local government units, and the
private sector. The updated database shall be made available to the local
government units, national government agencies and the private sector:
Provided, That the Commissioner of Internal Revenue or a duly authorized
representative shall be allowed access to the database without need of prior
approval: Provided, further, That non-submission of the required documents
to the BLGF will be subject to the provisions of Section 28 of this Act.

To further achieve these objectives and ensure efficient real property
tax administration, all provinces, cities, and municipalities shall automate
their operations, adopt tax mapping technology, maintain software-enabled
valuation systems, undertake regular data cleansing, and computerize
records management. The national government, through the Department of
Information and Communications Technology, shall provide the appropriate
equipment and connectivity, information and communications technology

10


Cera wawne

u
12
13
14
15
16

7
18
19
20
21
22
23
24
25
26

27
28
29

31
32
33

35

36
37
38
39

41
42

platform, and the appropriate training and capability building programs to
third class up to sixth class municipalities and provinces to ensure
compliance with this Section. The BLGF shall establish mechanisms for the
electronic submission of the required documents in accordance with the
succeeding sections of Chapter 2 of this Act.

SEC. 21. Duty of Register of Deeds to Supply Assessors with Real
Property Transactions Data. - The Register of Deeds shall prepare and
submit to the provincial assessors, together with the city assessors, and
municipal assessors, including the municipal assessors in the Metropolitan
Manila Area, an abstract of the entire registry every three (3) months and
copies of all contracts selling, transferring, or otherwise converting, leasing,
or mortgaging real property registered every end of the month. The abstract
shall include brief but sufficient description of the real properties entered
therein, their present owners, and the dates of their most recent transfer or
alienation accompanied by copies of corresponding deeds of sale, donation, or
partition, or other forms of alienation.

SEC. 22. Duty of Official Issuing Building Permits or Certificates of
Registration of Machinery to Transmit Copy of Permit to the Assessor. —
Any public official or employee who may now or hereafter be required by law
or regulation to issue to any person a permit for the construction, addition,
repair or renovation of a building, or permanent improvement on land, or a
certificate of registration for any machinery, including machines, mechanical
contrivances and apparatus attached or affixed on land or to another real
property, shall transmit a copy of such permit or certification within thirty
(30) days of its issuance to the assessor of the province, city, or municipality
where the property is situated.

SEC. 23. Duty of Geodetic Engineers to Furnish Copy of Plans to
Assessor. - It shall be the duty of all geodetic engineers, public or private, to
furnish, free of charge, the assessor of the province, city, or municipality
where the land is located, a copy of the blue or white print of each of all
approved original subdivision plans or maps of surveys, duly signed by a
Senior Geodetic Engineer, executed by them every end of the month from
receipt of such approved plans from the Land Management Bureau (LMB), the
Land Registration Authority (LRA), or the Housing and Land Use Regulatory
Board (HLURB), as the case may be.

SEC. 24. Duty of Registrar of Deeds and Notaries Public to Assist the
Provincial, City, or Municipal Assessor. — It shall be the duty of the
Registrar of Deeds and notaries public to furnish, free of charge, the
provincial, city, or municipal assessor with copies of all contracts selling,
transferring, or otherwise conveying, leasing, or mortgaging real property
received by, or acknowledged before them within such periods as the BLGF
shall prescribe.

1


ey auawne

©

10

u
12
13
14

15
16
w7

18
19
20
21

22
23
24

25
26
27

28
29

31
32
33

35
36
37

38
39

SEC. 25. Duty of Assessors to Transmit Documents to the BLGF. - It shall
be the duty of the assessors to transmit to the concerned BLGF Regional Office
all real property transactions data from the Register of Deeds, and the names
of the official issuing the building permit and those of the geodetic engineers
within one (1) month after the receipt of such data. The BLGF’s Regional Office
shall record, process and make a summary report of the real property data
and submit the same to the BLGF Central Office within one (1) month from
receipt of such data.

Chapter 3
Appointment and Qualifications of Assessors

SEC. 26. Appointment of Assessors. - The local chief executive shall appoint
the provincial, city, and municipal assessors and assistant assessors, as the
case may be, in accordance with civil service law, rules and regulations, and
the following guidelines:

(a) __ In the case of provincial and assistant provincial assessors and
city and assistant city assessors, the appointee shall be chosen from the list
of at least three (3) ranking eligible candidates within the region;

(b) Inthe case of city and assistant city assessors, and the municipal
and assistant municipal assessors in the Metropolitan Manila Area, the
appointee shall be chosen from the list of at least three (3) ranking eligible
candidates within the region; and

()__ In the case of municipal and assistant municipal assessors, the
appointee shall be choses from the list of at least three (3) ranking eligible
candidates within the province.

The assessors shall be under the technical supervision of the BLGF,
primarily through a system of compliance reporting and of capacity-building
through education and training programs.

SEC. 27. Qualifications of Local Government Assessors. — No person shall
be appointed assessor or assistant assessor unless a citizen of the Philippines,
a resident of the region for a provincial or city assessor/assistant assessor,
and of the province for a municipal assessor/assistant assessor, a registered
and licensed appraiser, of good moral character, and must not have been
convicted of any crime involving moral turpitude. The appointee must have
experience in real property valuation or assessment work or in any suitable
field, either in private or public practice, for at least five (5) years in the case
of the provincial or city assessor, and three (3) years in the case of the
municipal assessor.

ARTICLE IV
PENAL PROVISIONS

12


Nouswne

© o

10
1
12
13
14

15
16
7
18
19
20
2
22
23

24
25
26
27
28
29

31

32
33
34
35

36
37
38
39

SEC. 28. Failure to Comply with the Required Submission of Documents.
— Any government official or employee who fails without justifiable reason to
provide or furnish data or information required pursuant to Sections 20, 21,
22, 23, and 24 of this Act, shall be punished by a fine equivalent to the
official’s or employee’s six (6) months basic salary or suspension from the
service for a period not exceeding one (1) year, or both, at the discretion of the
competent authority.

SEC. 29. Failure to Comply with the Valuation Standards. - An assessor
who, for unjustifiable reasons, fails to comply with the valuation standards
developed and adopted pursuant to this Act, or deliberately conceals any
deviations or departures from such standards in the valuation of real
property, shall be punished by a fine equivalent to the official’s or employee’s
six (6) months basic salary or suspension from the service for a period not
exceeding one (1) year, or both, at the discretion of the competent authority.

SEC. 30. Failure to Prepare Schedule of Market Values. - An assessor who,
for unjustifiable reasons, intentionally or deliberately refuses or fails to
prepare the SMVs within the period set forth in this Act shall be punishable
by a fine equivalent to the official’s or employee’s basic salary for a period of
one (1) month to six (6) months, or by suspension from the service for not
more than one (1) year, or both, at the discretion of the competent authority.
This shall also be a ground for administrative and criminal liability in
accordance with the provisions of Republic Act No. 9646, otherwise known as
the “Real Estate Service Act of the Philippines”.

SEC. 31. Government Agents Delaying the Review, Approval, and
Implementation of SMV, and Conduct of General Revisions. — Any
government official who delays, without justifiable cause, the review,
approval, and implementation of the SMV, the conduct of general revisions,
or cause the improper use thereof shall be punished by a fine equivalent to
the official’s or employee’s six (6) months basic salary or suspension from the
service for a period not exceeding one (1) year, or both, at the discretion of the
competent authority.

SEC. 32. Violation of Other Provisions. - Any person, whether natural or
juridical, who violates any provision of this Act other than those punishable
under Sections 28, 29, and 30 hereof shall, when warranted, be dealt with
under applicable existing laws.

SEC. 33. Taxpayers’ Remedies in Case of Erroneous Assessments of Real
Properties. - The provisions of Sections 226 on Local Board Assessment
Appeals and 229 on Action by the Local Board of Assessment Appeals of
Republic Act No. 7160, as amended, shall apply in all cases of appeal as
remedies for taxpayers in the assessment of their property.

13


w

worn

oe
12
13

4
15
16
7
18
19
20
21
22
23

24
25

26
27
28
29

31
32
33

35
36
37
38
39

41

All concerned local governments shall cause the constitution of a fully
functioning Local Board of Assessment Appeals in their respective
jurisdictions in coordination with the Land Registration Authority.

ARTICLE V
TRANSITORY PROVISIONS

SEC. 34, Transitory Guidelines. — Local government units which are in the
process of updating their SMVs, upon the effectivity of this Act, shall continue
with such revisions in accordance with Section 16 of this Act: Provided, That
proper notification and coordination with the BLGF shall be undertaken.

In case the SMV is not yet available or updated, the BIR Commissioner
shall adopt the existing SMV, zonal values or the actual price in consideration
as stated in real property transaction documents, whichever is higher, for
purposes of computing any internal revenue tax.

SEC. 35. Saving Clause. - The zonal values, as determined by the BIR and
approved by the Secretary of Finance for internal revenue tax purposes, and
the SMVs prepared by the provincial assessors, together with the city
assessors and municipal assessors, including the municipal assessors in the
Metropolitan Manila Area, that have been approved by their respective
sanggunians for real property taxation purposes shall continue to be in force
and effect until repealed, superseded, modified, revised, set aside, or replaced
by the values provided under the updated SMVs as approved in accordance
with Section 15 of this Act, which shall be within two (2) years upon the
effectivity of this Act.

ARTICLE VI
FUNDING REQUIREMENTS

SEC. 36, Budgetary Requirements for the Updating of Schedule of Market
Values. - Each local sanggunian shall appropriate the necessary funds from
locally generated revenues, the internal revenue allotment or such other
sources every fiscal year. The accumulated amount so appropriated shall be
known as the Real Property Tax Administration Fund (RPTAF) which shall be
used for the proper implementation of the updating of SMVs and general
revision of real property assessments, and the administration of real property
taxes in all local government units.

‘The BLGF shall annually furnish the Department of Budget and
Management (DBM) with a list of local government units with SMVs that are
due for updating. The DBM, in their review of the ensuing year budget of
provinces, highly urbanized cities, independent component cities and
municipalities within the Metropolitan Manila Area, shall ensure that
sufficient funds have been budgeted to comply with the requirements of this
Act: Provided, That failure to provide the appropriations herein required shall
render their annual budgets inoperative.

14


2

© arva|an

et
12

13
14
15

16

17
18
19
20

2

22
23

24

25
26
27

28
29
30

31
32
33

35
36

37
38

ARTICLE VIL
MISCELLANEOUS PROVISIONS

SEC. 37. Appropriations. - The amount necessary for the implementation of
this Act shall be included in the annual General Appropriations Act.

SEC. 38. Implementing Rules and Regulations (IRR). - Within six (6)
months after the effectivity of this Act, the DOF, in consultation with
concerned parties, shall issue the IRR for the effective implementation of this
Act.

SEC. 39. Suppletory Application of Existing Laws. — The provisions of
Republic Act No. 7160, otherwise known as the “Local Government Code of
1991”, as amended, and other laws consistent with this Act shall have
suppletory effect.

SEC. 40. Separability Clause. - If any section or provision of this Act shall
be declared unconstitutional or invalid, other sections or provisions not
affected thereby shall continue to be in full force and effect.

SEC. 41. Repealing Clause. —

(a) Sections 188, 199(0), 201, 202, 209(a), 212, 214, 219, 220, 472(a)
paragraph 1, 472(b)(8), and 473(a) paragraph 1 of Republic Act No. 7160,
otherwise known as the “Local Government Code of 1991”, are hereby
repealed;

(b) Section 3(n) of PD 464 of 1974 is hereby repealed;

(c) Section 6 of Republic Act No. 10752, otherwise known as “The
Right-of-Way Act” is hereby repealed;

(4) Section 4(a) and (b) of Republic Act No. 8974 are hereby repealed;

(e) Section 9 of PD 921 on the administration of local financial
services in Metropolitan Manila and creating Local Treasury and Assessment
Districts, is hereby repealed;

() Sections 19, 135(a), 138, 198(a), 199(0), 218, and 224(a) of
Republic Act No. 7160, otherwise known as the “Local Government Code of
1991”, are amended or modified accordingly;

(g) Sections 6(E), 24(D), 27(D)(5), 88(B) and 102 of Republic Act No.
8424, otherwise known as the “Tax Reform Act of 1997”, are amended or
modified accordingly;

(h) Section 4(h) and Section 9 of PD 538 on the power of Philippine
Veterans Investment Development Corporation Industrial Authority to collect
real property tax; and

(i) All laws, presidential decrees, executive orders, presidential
proclamations, rules and regulations or parts thereof contrary to or

15


inconsistent with this Act are hereby repealed, superseded, or modified
accordingly.

SEC. 42. Effectivity. - This Act shall take effect fifteen (15) days after its
publication in the Official Gazette or in a newspaper of general circulation.

Approved,

16