Republic of the Philippines:
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS.
First Regular Session

House Bit no, 128

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, JR.

EXPLANATORY NOTE

The real property valuation system in the Philippines has become inefficient and
riddled with layers of bureaucracy. Despite the World Bank report that 50% to 75% of
the country's wealth is contained inland, the land market contribution to the Gross
National Product is a mere 6%. The inefficiencies in the land administration and
management sector has hindered the growth and huge potential of the land sector.

With more than 23 national government agencies and 1,700 local government units
using different systems and methodologies, inefficiencies are sure to arise from the
lack of a unified national standard. This has caused discrepancies in the system and
has cost the government, with conflicts resulting to right-of-way compensation
problems, lengthy court disputes, delays and derails.

This bill seeks to address this by implementing reforms through the Bureau of Local
Government Finance (BLGF) under the Department of Finance. It proposes to be
reorganized and strengthened to provide the institutional support as the BLGF is
tasked to oversee all matters relating to real property valuation in the country. The
BLGF shall be the lead agency tasked to review and approve the Schedule of Market
Values of all LGUs. This reorganization hopes to separate the technical function of
real property valuation from political function of taxation practiced by local elective
officials.

The objective is to develop and maintain a just, equitable and impartial real property

valuation in the country that is also based on internationally accepted valuation
standards. In view of this, approval of this bill is earnestly sought.

Viliefi te

Luis MUND “LI ” F, VILLAFUERTE, JR.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Queson City

EIGHTEENTH CONGRESS
First Regular Session

HOUSE BILL No, 1908
a

Introduced by HON. LUIS RAYMUND “LRAY” F. VILLAFUERTE, 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 |
DECLARATION OF STATE POLICY AND OBJECTIVES,
AND DEFINITION OF TERMS

SECTION 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;

(c) Promote the fiscal autonomy of local government units (LGUs) 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 appraising of real properties from the
functions of tax policy formulation and administration of the taxes due
thereon;

(e) 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”.

(f) 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

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 public interests,
and develop confidence in the valuation system.

SECTION 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;

(0) 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 No. 7160, otherwise known as the “Local
Government Code of 1991”, as amended;


(e) Assessor refers to an official in the 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.

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

(g) Electronic database refers to an organized collection of data, or
information, that is stored in computer-readable form;

(h) 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;

International Valuation Standards (IVS) refer to standards that provide

property valuers with a framework composed of recognized principles and

concepts as well as internationally accepted definitions, best practices, and
reporting systems;

() Land refers to one of the major factors of production which is supplied by

(i

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 minerals
deposits, wildlife, and timber;

(k) 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;

r()

Market value refers to the estimated amount for which a property should
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;

(m)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;

(n) 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;

(0) 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.

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

(a) 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 function, conversion of a
special purpose property to other types of development or application is
generally not economically feasible; and

(rt) 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 a property as of a specific date and for
a specific purpose;

ARTICLE I

STRENGTHENING THE BUREAU OF LOCAL GOVERNMENT OF FINANCE

(BLGF)

Chapter |
BLGF Central Operations


SECTION 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 LGUs and other concerned parties;

(b) In coordination with the Bureau of Internal Revenue (BIR), 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 assessor in 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.;

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

(d) Provide leadership and policy direction to LGUs on real property valuation
and appraisal 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;

(e) Maintain a roster of licensed local government appraisers and assessors in
consultation and coordination with the Professional Regulatory Board of
Real Estate Service (PRBRES) under the Professional Regulation
Commission;

(f) 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
property valuation :


(h) Formulate and provide for uniform procedures on the different transactions

in the assessor's office, including the transfer, annotation and issuance of

tax declarations;

(i) Determine, fix, and collect reasonable amounts to be charged as

administration fees, fines, and penalties relative to the implementation of
this Act; and

(j) Perform such other functions as are necessary, proper, and incidental to

implement the provisions of this Act.

SECTION 5. Establishment of the Real Property Valuation Service. - To achieve
the policy 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 Offices is hereby established.

SECTION 6. The BLGF Executive Director. — The BLGF Executive Director shall be
responsible for the efficient and effective day-day performance of the responsibilities

set forth in this Act, and shall be responsible for the overall internal management and

governance of the RPVS.

SECTION 7. Creation of 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

ORON

Bureau of Internal Revenue (BIR);
Department of Environment and Natural Resources (DENR);
Bangko Sentral ng Pilipinas (BSP);

|. National organization of government assessors;

.. National organization of appraisers in national government agencies;

and

. Private appraisal sector.


(c) The representatives from the BIR, the DENR and the 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 organizations.

(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.

(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 specific issues concerning real property
valuation.

Chapter 2
BLGF Regional Operations

SECTION 8. Role of the BLGF Regional Offices. - The BLGF Regional Offices,
through the Regional Director, shall be responsible for all matters relating to 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 SMV’s 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 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


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

SECTION 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 each
from the:

4. BIR - Regional Office;
DENR — Regional Office;
Head of Regional organization of government assessors;
Head of Regional organization of national government appraisers;
Head of the private appraisal sector within the region; and

2PaRON

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
Regional Director may deem necessary for the performance of its function.
The BLGF Regional Director may invite resource persons on specific issues
concerning real property valuation.

SECTION 10. Functions 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 real property tax compliance reporting in the
region; level of complaints and appeals; LGU training in the region; appraisal and
assessment concerns in general; and other matters as may be determined by the
Committee.

ARTICLE Ill
VALUATION AND APPRAISAL OF REAL PROPERTIES

Chapter 1
Valuation Standards and Market Values


SECTION 11. Development of Valuation Standards. - Notwithstanding the
provisions of existing laws to the contrary, the BLGF shall develop, adopt, and
maintain, implement uniform valuation standards which shall be used by all appraisers
and assessors in the LGUs 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.

SECTION 12. Valuation and Appraisal 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 under this Act. The Secretary of Finance shall
promulgate the rules and regulations for the valuation and appraisal of real property
pursuant to the provisions of this Act.

For real properties intended for low-cost or socialized housing, lands included
in the government's agrarian reform program 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 values of these properties in
accordance with generally accepted international valuation standards.

SECTION 13. Preparation of the Schedule of Market Values. — The provincial
assessors together with municipal assessors, and city assessors, including the
municipal assessor in Metropolitan Manila Area, shall prepare the SMV 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. They shall
complete the preparation/updating of the SMV within six (6) months or one hundred
eighty (180) days from January to June following the announcement from the BLGF
that they are due to revise their SMV which will be issued on the last week of
December prior to the SMV preparation.

Upon completion of the proposed SMV, the same shall be submitted by the
assessors to the BLGF Regional Office who shall review the proposal in coordination
with the BIR Regional Office, within seventy-five (75) days from receipt thereof to
ensure that the SMV complies with all the requirements. The BLGF/BIR regional

10


offices shall hold at least one public consultation before they endorse the SMV to the
Secretary of Finance.

SECTION 14. Approval of the 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 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 after
fifteen (15) days after its publication.

The DOF shall post in its official website the approved SMV and furnish the
same to the concerned LGU, through the BLGF, and the BIR, with copies thereof.

SECTION 15. Setting Assessment Levels and 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 revenue and tax impact of the new SMV as against the
existing assessment levels and tax rates, calculate the expected revenue and 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 at least three (3) estimates of the revenue and tax impact based on
different scenarios and submit the revenue/tax impact report to the local chief
executive and the Sanggunian.

The local chief executive shall transmit the approved SMV, together with the
revenue/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 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 concerned
‘Sanggunian shall enact the tax ordinance upon conduct of public 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 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.

SECTION 16. Publication of Assessment Levels and Tax Rates. — The approved
ordinance for the assessment levels and tax rates shall be published by the concerned
LGU in a newspaper of local circulation once a week for two (2) consecutive weeks:
Provided, however, 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 municipal halls, and city halls and in two (2) other conspicuous
public places therein.

SECTION 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 LGU less than six (6) months prior to the effectivity of the
new assessments 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 purposes of the local transfer tax, the LGU may use the approved SMV
upon its effectivity or the total consideration in the transfer, whichever is
higher. For other purposes such as the 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

pass an ordinance providing for revised assessment levels and/or tax rates after the
approval of the SMV and to conduct a general revision of assessment and property

12


classifications, shall render an LGU ineligible for any conditional or performance-
based grants or to contract any form of credit financing from the national government.

SECTION 18. Updating of the Schedule of Market Values. — All provincial
assessors together with the municipal assessors, and the city assessors, including the
municipal assessor in Metropolitan Manila Area, shall update of their respective SMVs
within two (2) years from the effectivity of this Act. Thereafter, they shall update the
SMVs and conduct a general revision of property assessments and classifications
once every three (3) years from the date of the 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 the market where the property is located
after the said SMVs have been approved and prior to the 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
municipal assessors, and the city assessors, including the municipal assessor in
Metropolitan Manila Area, recommend revisions to their existing SMV to the BLGF
Regional Office, through the Regional Director of the BLGF having jurisdiction over
the LGU concerned.

Such revision/s shall be subject to review by the concerned BLGF Regional
Office in coordination with the BIR Regional Office, and complete the review and
submit their recommendations to the BLGF Executive Director, in accordance with
Section 14 hereof.

SECTION 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 standards, concepts, principles and practices; conduct of SMV
tax and revenue impact studies; preparation of compliance reports, and other subject

areas.

Chapter 2
Development and Maintenance of Real Property Market Database


SECTION 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, LGUs and the private sector; Provided that in
the case of government agencies and instrumentalities, 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 LGUs, national government agencies and the private
sector: Provided, that the Commissioner of Internal Revenue or his 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 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 thru the Department of Information and Communications
Technology shall provide the appropriate equipment and connectivity, information and
communications technology platform, training and capability building to ensure the
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 this Act.

SECTION 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 municipal assessors, and city assessors,
including the municipal assessor in 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

14


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.

SECTION 22. Duty of Official Issuing Building Permits or Certificates of
Registration of Machinery to Transmit Copy of 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.

SECTION 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 form 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.

SECTION 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.

SECTION 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 those of the geodetic engineers within one (1) month

15


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

SECTION 26. Appointment of Assessors. — The local chief executive shall appoint
the provincial, city and municipality 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) In the case of city and assistant city assessors, and the municipal and
assistant municipal assessors in Metropolitan Manila Area, the appointee
shall be chosen from the list of at least three (3) ranking eligible candidates
within the region; and

(0) 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, primarily
through a system of compliance reporting and of capacity-building programs through
education and training.

SECTION 27. Qualification of Local Government Assessors. — No person shall be
appointed assessor or assistant assessor unless such 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

16


three (3) years in the case of the municipal assessor. Once appointed, all assessors
must comply with the requirements of the Professional Regulatory Board of Real
Estate Service (PRBRES) for the regular updating of their licenses; otherwise, they
shall be subject to certain sanctions as may be determined by the BLGF/DOF.

ARTICLE IV
PENAL PROVISIONS

SECTION 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.

SECTION 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 and appraisal 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.

SECTION 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 meted 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 court. 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”.

SECTION 31. Government Agents Delaying the Review, Approval and
Implementation of SMV, and Conduct of General Revisions. - Any government

17


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 court.

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

SECTION 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

SECTION 34. Transitory Guidelines. — (a) LGUs 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.

SECTION 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

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prepared by the provincial assessors together with the municipal assessors, and the
city assessors, including the municipal assessor in 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

SECTION 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 (IRA) 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 the SMVs and general revision of real property
assessments, and the administration of real property taxes in all LGUs.

The BLGF shall annually furnish the Department of Budget and Management
(DBM) with a list of LGUs whose SMVs 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.

ARTICLE VII
MISCELLANEOUS PROVISIONS

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


SECTION 41. 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

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

Approved,