Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

io S488

HOUSE BILL NO.

Introduced by Representative Jaime R. Fresnedi

EXPLANATORY NOTE

The absence of a uniform set of standards for land valuation in the country has caused
the existence of multiple, unrealistic, and corruption-prone land valuation systems. This, in
tum, has generated inefficiencies in the allocation and utilization of the land market, a lack of
confidence of the public and investors in the real property sector, and, above all, loss of
income and unrealized revenues from real property for the Philippine Government. Estimated
to contribute 50 percent to the national wealth, the land market contributes only 6.6 percent,
and national revenues from real estate transactions have consistently declined over the years,

There are at least twenty-three (23) national government agencies undertaking real
property valuation, each using its system and methodology for its own purpose (i.e., the
Bureau of Internal Revenue (BIR) with its zonal values for various national land tax
transactions like capital gains tax, estate tax, and documentary stamp tax, the DPWH for
expropriation of real property, etc.). The Local Government Units (LGUs) likewise prepare,
legislate, and implement their own schedules of market values (SMVs) on which real
property tax assessment is based. Thus, the same property is given different values depending
‘on the nature and purpose for valuation, confounding the property owners and the public, and
making valuation susceptible to political influence and corruption. For example, the zonal
values of the BIR are generally 25 percent higher than the SMVs of the LGUs. But even this
higher level was found out to be 25 to 70 percent lower than the prevailing market prices.
Due to these rampant undervaluations, the national and local governments are thus deprived
‘of much needed revenues from a most stable and convenient source.

Valuations used by both BIR and LGUs for taxation purposes are also outdated. While
the Local Government Code requires the LGUs to revise their SMVs every three years, this is,
hardly observed. The same is true for the BIR which has no statutory requirement to revise its
zonal values. The situation does not provide equity and fairness to taxpayers and property
‘owners, nor is it conducive to encouraging investments and confidence in the land market.

The Valuation Reform Act (VRA) hopes to address these problems. It seeks to
establish uniform and internationally-accepted standards for the valuation of real property in
the country, It also adopts market value as a single real property valuation base for the
assessment of real property related taxes. The proposed measure also establishes market



value for valuing or appraising real property for various government purposes. Reform is also
introduced by separating the function of appraising and assessing property from tax policy
and administration. For this purpose a National Valuation Authority (NVA) is being proposed
to be created to regulate and have oversight of the valuation and appraisal of real property in
the country. This would also ensure that a nationally consistent, equitable, and impartial
valuation system of real property for taxation and other purposes is put in place. Hopefully,
ich will result in broadening the valuation base of real property for taxation and thus
contribute to improving the national income for the country’s social and economic
development.

As a necessary support to improving the valuation system and keeping it abreast with
international standards and practices, assessors are professionalized and insulated from undue
political intervention by setting the qualifications standards for their appointment.

A similar version of this bill was previously filed by my predecessor during the last
Congress.This representation is refiling this proposed measure because of the belief that it is
an important piece of legislation that would benefit our country and the Filipino people.

In view of the foregoing, the passage of this bill is earnestly requested.

R&resentative
Lone District, Muntinlupa City



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

NINETEENTH CONGRESS
First Regular Session

~ 3436

HOUSE BILL NO.

Introduced by Representative Jaime R. Fresnedi

AN ACT
INSTITUTING REFORMS IN REAL PROPERTY VALUATION IN THE
PHILIPPINES, ESTABLISHING THE NATIONAL VALUATION AUTHORITY 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 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 intemationally 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;

(c) 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;

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



(c) Support the development and professionalization of the valuation practice in the
country pursuant to Republic Act No. 9646, othetwise 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 and be at par with global standards; and,

(h) Ensure transparency in real property transactions to protect 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 lev

(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;

(d) 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, as amended;

(e) Assessor refers to the official or employee in the local government unit (LGU)
who is a duly licensed appraiser, and performs appraisal and assessment of real
properties, including plant, machinery, and equipment, for taxation and other
purposes. This definition also includes assistant assessor,

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

(g) 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) 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 atached to the earth's surface including all
natural resources in their original state, such as mineral deposits, wildlife, and
timber;

(i) Machinery refers to machines, equipment, mechanical contrivances, instruments,
appliances, or apparatus which may or may not 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 verv nature, and
ouroose are designed for or necessary to its manufacturing, mining, logging,
commercial, industrial or agricultural purposes,

(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 18 marketing, wherein the parties had each
acted knowledgeably, prudently, and without compulsion;

(k) Private appraisal sector refers to licensed non-governmental real estate service
practitioners;

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

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

{n) 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 30 machinery within
a local government unit prepared by assessors pursuant to existing laws, rules and
regulations;

(0) 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 concer since
its special design and function renders conversion to other types of development
or application not economically feasible; and,

(p) Valuation, also known as appraisal, refers to the systematic, analytic and logical
analysis of the recording of property facts, circumstances, investments and other
relevant data resulting in a supportable estimate or professional opinion of the
value of the propeny as of a specific date and for a specific purpose.

ARTICLE IL
THE BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF)

Chapter T
BLGF Central Operations

SEC. 4, Powers and Functions of the Bureau of Local Government Finance (BLGF). -
The BLGF of the Depanrnent of Finance (DOF) shall lead and manage the implementation of
the provisions of this Act, In addition to the powers vested upon it by Executive Order 292,
otherwise known as the Revised Administrative Code of 1987, it shall cxercise the following
additional powers and functions:


{a) Develop, adopt, and maintain valuation standards consistent with internationally
accepted valuation standards, regulations, and specifications for real property
appraisal used for taxation and other purposes, and ensure compliance therewith
by Local Government Units (LGUs) 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 propetty
valuation policies and standards, and recommend itsapproval 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;

(d) Provide leadership and policy direction to LGUs on real property valuation for
taxation and other purposes, including the development and maintenance of
internationally accepted 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 in
consultation and coordination with the Professional Regulation Commission;

(0 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;

(g) Conduct continuing study and research on valuation, and maintain information on
current global and country trends and developments in real propetty 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 is hereby established within the BLGF and shall have counterpart

personnel in the BLGF Regional Offices.

SEC. 6. Supervisory Role of the BLGF Executive Director over the RPVS. — 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 for the overall internal
‘management and governance of the RPVS.

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

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a) Central Consultative Committee shall be created and shall serve as the
consultative forum on matters pertaining to the setting and adoption of
internationally accepted 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,
Private appraisal sector:

Provided, That the representative from the private appraisal sector shall be
active in the practice of real estate appraisal for at least five (5) years as
certified by the Professional Regulatory Board of Real Estate Service
(PRBRES).

©) The representatives of the BIR, DENR, and BSP must be performing
valuation-related functions. The national organization of govemment
assessors. and the private appraisal sector shall be represented by their
respective heads of organizations or their duly qualified representatives.

d) 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.

©) 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, shall,
through the Regional Director, be responsible for all maters relating to valuation and the
supervision of the SMVs in the region. They shall:

5


(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;

(c) Provide for economical, efficient and effective valuation services in the region:

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

(c) 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,

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

e Committee. —

SEC. 9. The Regional Consultat

(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:

. BIR — Regional Office:
DENR - Regional Office;

. Head of Regional organization of govemment assessors or its duly authorized
representative;
Head of Regional organization of national government appraisers or its duly
authorized representative;

. Head of the private appraisal sector within the region or its duly authorized
representative; and,
Head of the bankers association within the region or its duly authorized
representative.

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

() 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 Regional
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 reason 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: Provided, That any
report thereof, as a result of the forum, shall be submitted to the Central Consultative
Committee.

ARTICLE Ill VALUATION OF REAL PROPERTIES,
Chapter J
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 LGUs
and other concemed 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 internationally accepted 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.

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

SEC. 13. Preparation of Schedule of Market Values. — The provincial and city
assessors, including the municipal assessor in the Metropolitan Manila Area, shall prepare the
SMYs for the different classes of real property situated within their respective LGUs,
pursuant to the valuation standards, rules, regulations and other specifications set by the DOF.
The preparation of the SMVs shall be completed within six (6) months following the notice
from the BLGF to all local assessors to submit their revised SMVs.

Upon its completion, the local assessor shall submit the proposed SMV to the BLGF
Regional Office. Within seventy-five (75) days from receipt thereof, the BLGF Regional
Office, in coordination with the BIR Regional Office, shall review and endorse the proposed
SMV to the BLGF Executive Director and the Commissioner of Internal Revenue: Provided,
That, in the case of ci ty within the Metropolitan Manila Area, the

jes and muni



proposed SMV shall be submitted to, and reviewed by the BLGF Central Offico, in
coordination with the concerned BIR Regional Office: Provided further, That the SMV
complies with all the requirements set by the Secretary of Finance, including the conduct of
at least one public consultation on the proposed SMVs.

SEC. 14. Approval of Schedule of Market Values. — The Secretary of Finance
shall approve the SMV within thirty (30) 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 SMVs shall take effect fifteen (15) days after its publication by the
DOF in the Official Gazette or in at least two (2) newspapers of general circulation, and
posting in the respective provincial capitol, city hall and municipal hall, and in two (2) other
conspicuous public places within the LGU covered by the approved SMVs.

The DOF and the concerned LGUs shall post the approved SMYs in their 26 official
websites.

SEC. 15. Setting Assessment Levels and Tax Rates. — The approved SMV shall be
transmited to the concerned local chief executive, through the respective provincial, city, and
municipal assessor. The concerned assessor, in coordination with the local treasurer, shall
estimate the revenue and tax impact of the new SMV on taxpayers based on existing
assessment levels and tax rates, and recommend amendments thereon based on three (3)
different scenarios. The assessor shall thereafter prepare and submit the revenue and tax
impact report to the local chief executive for consideration,

‘The local chief executive shall transmit the approved SMV, together with the revenue and tax
impact report, within fifteen (15) days from receipt of the same to the Sanggunjan 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 revenue and tax impact of additional
options in order to arrive at a desired level of revenue and tax burden that the Sanggunian
will adopt. The concemed Sanggunjan shall enact the tax ordinance within sixty (60) days
from receipt thereof, upon conduct of public hearings and proper consultations; 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, including
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 concemed LGU in
‘a newspaper of local circulation once a week for two (2) consecutive weeks: Provided, That

8


in provinces and cities, including the municipality within the Metropolitan Manila Area,
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 propefty-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 LGU 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.

©) For purposes of the local transfer tax, the LGU shall use the approved SMV
upon its effectivity or the total consideration in the transfer, whichever is
higher. For other purposes, such as tax on sand and gravel, community tax,
fees and charges, or as benchmark for real property appraisal of other
government agencies, the approved SMV shall 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 approved SMV shall render an LGU ineligible for any conditional or
performancel3 based grant or to contract any form of credit financing

SEC. 18. Updating of Schedule of Market Values. — All provincial and city
assessors, including the municipal assessor within the Metropolitan Manila Area, shall update
their respective SMVs within (2) years from the effectivity of this Act. Thereafter, they shall
update the SMVs and conduct general revision of property assessments and classifications
once every three (3) vears from the date of last revision. The BLGF shall prepare the
schedule for the updating of the SMVs in all provinces and cities, including the municipality
within the Metropolitan Manila Area. In case of any significant change in market value where
the property is located after the SMV has been approved and prior to the next revision, or
where correction of errors and inequalities in the SMV is deemed necessary, or upon the
order of the Secretary of Finance, the provincial and city assessors shall recommend revisions
to their existing SMVs to the BLGF Regional Office, through the BLGF Regional Director
exercising jurisdiction over the local government unit concerned: Provided, That, the city
assessors and municipal assessor within the Metropolitan Manila Area, shall recommend
revisions to their existing SMVs to the BLGF Central Office


Such revision or revisions shall be subject to review by the concerned BLGF Regional Office
and the BIR Regional Office which shall complete their review and submit their
recommendations to the BLGF Executive Director, in accordance with Section 13 and14
hereof.

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 trainings for all local assessors, local officials, and staff, and other concerned BIR
personnel on the preparation of the SMVs in accordance with internationally accepted
valuation standards, concepts, principles and practices, conduct of 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, transfer 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: Provided. That in the case of
aovernment aaencies and instrumentalitics. the mandatory submission of documents and
information shall be subject to the prohibition of disclosure of certain information under the
Data Privacy Act and other existing laws. The updated database shall be made available to
the local government units, national government agencies and the private sector: Provided,
further, That the Commissioner of Internal Revenue or a duly authorized representative shall
be allowed access to the database without need of prior approval: Provided, finally, That
non-submission of the required documents to the BLGF will be subject the concerned official
or employee to administrative penalties pursuant to the provisions of Section 28 of this Act.

To further ensure the efficiency of 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 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 provisions of Chapter 2. Article
Hof this Act.

10


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 descriptions 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 dutv of all geodetic engineers, public pr 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 propedy
received by, or acknowledged before them within such periods as the BLGF shall prescribe.

SEC. 25. Transmission of Real Property Transactions Data to the BLGF. — Upon
operationalization of the real property transactions database provided in Section 20 of this
Act, it shall be the duty of the registers of deeds, notaries public, officials issuing building
permits, and the geodetic engineers conducting surveys within a locality to clectronically
transmit to the concerned BLGF Regional Offi ant real property transactions data, in
accordance with rules and regulations to be promulgated by the Secretary of Finance.

rel

Chapter 3

Appointment and Qualifications of Assessors

11


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, Real Estate Service Act, 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.) In the 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,

c.) In the case of municipal and assistant municipal assessors, the appointee shall be
chosen 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, primarilythrough a
system of compliance reporting and of capacity-building through education and training

programs.

SEC. 27. Qualification 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 propety valuation or assessment work or in any suitable field, either
in private or public 3 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. Once appointed, all
assessors and local government appraisers must comply with the requirements of the
Professional Regulatory Board of Real Estate Service for the regular updating of their
licenses

ARTICLE IV
PENAL PROVISIONS

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 one (1) month to six (6) months basic salary of the official or
employee, or suspension from the service for a period not exceeding one (J) year, or both, at
the discretion of the competent authority.

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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 deviation or departure from such standards
in the valuation of real property, shall be punished by a fine equivalent to one (1) month to
six (6) months basic salary of the official or employee, 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 one (1) month to six
(6) months basic salary of the official or employee, 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 SMVs,
the conduct of general revisions, or causes the improper use thereof.shall be punished by @
fine equivalent to one (1) month to six (6) months basic salary of the official or employee, 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 of 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 the taxpayers in the assessment
of their properties.

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 shall, upon the effectivity of this Act, continue with such revisions in
accordance with Sections 15 to 18 of this Act: Provided, That proper notification and
coordination with the BLGF shall be undertaken.

B


In case the SMVs are not yet available or updated, the BIR Commissioner shall adopt the
existing SMVs, 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 assessor in the Metropolitan Manila Area, that have been approved
by their respective sanggunjans 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 IJpdating of Schedule of Market
Values. — Each local sanggunian shall appropriate the necessary funds from locally
generated revenues, the intemal revenue allotment or such other sources every fiscal year to
constitute the Real Property Tax Administration Fund (RPTAF), which shall be established
and used for the proper implementation of the updating of the 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 its review
of the ensuing year’s budget of provinces, highly urbanized cities, independent component
cities and municipalitics within the Metropolitan Manila Area, shall ensure that sufficient
funds are so appropriated for the RPTAF: Provided, That failure to provide the appropriations
required shall render their annual budgets inoperative.

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. 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.

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SEC. 39. Implementing Rules and Regulations (IRR). — Within six (6) months
after the effectivity of this Act, the DOF shall, in consultation with concerned parties. issue
the IRR for the effective implementation of this Act.

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. —
The following provisions are hereby repealed:

a.) Sections 212, 214, and 221 of Republic Act No. 7160, otherwise known as the Local
Government of 1991; and,
b.) Section 4(h) of Presidential Decree No. 538.

The following provisions are hereby amended accordingly:

a.) Section 33, Chapter LV, Title U1, Book IV, of Executive Order No. 292, otherwise known
as the Revised Administrative Code Of 1987;

b,) Sections 19, 135(a), 138, 201, 218, 220, 472(a), 472 and 476 of 8 Republic Act No. 7160;

¢.) Sections 5, 6 and 7 of Republic Act No. 10752, othenvise known as the Right-of-Way
Act;

4.) Section 9 of Presidential Decree No.921 and,

©.) Sections 6(e), and(b) of Republic Act No. 8424, otherwise known as the National
Internal Revenuc Code of 1997, as amended.

All. laws, presidential decrees, executive orders, presidential proclamations, rules and
this Act are hereby repealed.

regulations or parts thercof contrary to or inconsistent
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,

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