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

Seventeenth Congress
First Regular Session

HOUSE BILL No. _1616

Introduced by Honorable Neptali M. Gonzales II

EXPLANATORY NOTE

This bill seeks to institute reforms in the real estate property valuation and
assessment practices in the Philippines.

Real property is considered the country’s most important and biggest financial asset,
however, the ineffective and inequitable land valuation and taxation system in the country
caused huge losses in revenues, triggered informal property transactions, and affected the
quality of governance, socio-economic development, and vibrancy of the real estate market
in the country.

Philippine real property market is currently characterized by multiple systems of
valuation appraised by the different National Government Agencies (NGAs), each using its
own system and methodology. The situation is the same in the appraisal of Local
Government Units (LGUs). LGUs prepare, legislate and implement their Schedules Market
Values (SMVs) which is the basis of the assessment real estate tax. Hence, the same property
is given different values depending on the nature and purpose of valuation. The process is
not insulated from political influence as manifested, among others, in local officials allowing
minimal, selective and subjective increases on valuations and the frequent deferment of the
general revision of property assessments contrary to the provision of the Local Government
Code requiring revisions every three (3) years. Valuations used by the LGUs are therefore
outdated. The same can be said of valuations used by the Bureau of Internal Revenue (BIR)
since there is no statutory requirement for it to revise zonal values.

The lack of a single agency responsible for property valuations and the use of multiple
appraisal systems have resulted in the lack of uniformity and equity in real property appraisal
in the country. This bill proposes the establishment of an appraisal authority, the National
Valuations Authority (NVA), that will be responsible in regulating and overseeing the
valuation and appraisal activities of real property in the country. The NVA is envisioned to
maintain the integrity of real property appraisal in the country. Establishing uniform and
internationally-accepted standards for the valuation of real property in the country and
adopting the market value as a single real property valuation base for the assessment of real
property taxes will address one of the flaws of our current valuation system. Ensuring equity
in real property taxation by separating the valuation and assessment function from tax
setting and political influence is also imperative.


An equitable, creditable, transparent and impartial valuation of real property will
result in broadening the taxation base of real property which will in turn result not only in
improved revenue collection but also in foreign investors’ confidence in the country's real
property market.

In view of the foregoing considerations, approval of this proposed measure is
eamestly requested.

NEPTALI M. GONZALES IL


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

Seventeenth Congress
First Regular Session

HOUSE BILL NO. 1615

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Introduced by Honorable Neptali M. Gonzales II

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

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:
1. Establish and maintain standards to govern the valuation of real property
in the country;
2. 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 (LGUs) to
provide basic services to their constituency by enhancing their capacity
to generate local revenues from real property;

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

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

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:

1

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 ot direct the valuation of real
property;

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


10.

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

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


ll.

12.

13.

14.

15.

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;

‘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 nongovernmental real estate
service practitioners who have been active in the practice of real estate
appraisal for at least five (5) years;

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

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;

Schedule of Market Values, hereinafter referred to as SMV, refers toa
table of base unit market values for all kinds of real property, except
machinery within an LGU prepared by assessors pursuant to existing

laws, rules and regulations;


16.

17.

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 ot application is
generally not economically feasible; and

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 property as of a specific date

and for a specific purpose.

ARTICLE II

THE BUREAU OF LOCAL GOVERNMENT FINANCE (BLGF)

Chapter 1

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:

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;

In coordination with the Bureau of Internal Revenue (BIR), review and

ensure that the 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;

Conduct continuing study and research on valuation, and maintain
information on current global and country trends and developments in
real property valuations

Formulate and provide for uniform procedure on the different
transactions in the assessor’ office, including the transfer, annotation,
and issuance of tax declarations;

Determine, fix, and collect a reasonable amount to be charged as
administration fees, fines, and penalties relative to the implementation of

this Act; and


10. 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

Offices 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. —

1. 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.

2. It shall be chaired by the BLGF Executive Director and shall be composed

of a representative each from the:

a

b.

f.

Bureau of Internal Revenue;
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.

3. 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 organizations.

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,

through the Regional Director, shall be responsible for all matters relating to valuation and

the supervision of the SMVs in the region. They shall:

ik

Implement policies, plans, programs, rules and regulations on real
property valuation of LGUs in the region;

Review, in coordination with the BIR, and endorse to the RPVS, the
proposed SMVs prepared by the assessors of the LGUs in the region;
Provide for economical, efficient and effective valuation services in the
region;

Coordinate and consult with other government departments, bureaus and

agencies within the region dealing with real property valuation;


5. 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

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

SEC. 9. The Regional Consultative Committee. -

1. 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:

a. BIR Regional Office;

b. DENR - Regional Office;

c. Head of regional organization of government assessors;

d. Head of regional organization of national government
appraisers;

e. Head of the private appraisal sector within the region; and

£ Head of the bankers association within the region.

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

3. 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 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 III
‘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 LGUs
and other concerned parties in the appraisal ot 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.

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 generally accepted international valuation standards.

SEC. 13. Preparation of Schedule of Market Values. — The provincial assessors
together with the 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 LGUs, 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
concemed LGU, through the BLGF and the BIR, with copies thereof.

SEC. 15. Setting Assessment Levels and Tax Rates. — The approved SMV shall be
transmitted to the concemed 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 in the new
SMV and recommend amendments on the assessment levels and/or tax rates. The assessor
shall prepare a minimum of three (3) 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
concemed 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 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 LGU
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:

1. 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.


2. 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.

3. For other purposes, such as local transfer tax, tax on sand and gravel,
community tax, fees and charges, ot 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 an LGU 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, and the municipal 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 (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 assessors 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 LGU concerned.


Such revision/s 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 14 hereof.

SEC. 19. Conduct of Capacity Buil

ing 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

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 ot
instrumentalities, LGUs, and the private sector. 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 a duly authorized representative shall be allowed
access to the database without need of prior approval: Provided, further, That nonsubmission
of the required documents to the BLGE 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 computerized records management. The National Government, through
the Department of Information and Communications Technology, shalll 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 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, ot
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, 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 from 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 ot 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 ot maps of surveys, duly signed
bya 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, ot mortgaging real property
received by, or acknowledged before them within such periods as the BLGF shall prescribe.

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 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:

1. 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;

2. 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

3. Inthe 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 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 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

SEC. 28. Failure to Comply with the Required Submission of Documents. — Any
government official or employee who fails without justifiable reason to provide ot 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, ot 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 o
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 shalll 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 Section 226 on Local Board of Assessment Appeals and
Section 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.

Alll concerned local governments shall cause the constitution of a fully functioning

Local Board of Assessment Appeals in their respective jurisdictions in coordination with the

LRA.

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 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 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

ARTICLE VII
MISCELLANEOUS PROVISIONS

SEC. 37. Appropriations. - The amount necessary for the implementation of this
Acct 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. —

1. Sections 188, 199(o), 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”, as
amended, are hereby repealed;

2. Section 3(n) of Presidential Decree No. 464 of 1974 is hereby repealed;

3. 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;


Section 9 of Presidential Decree No. 921 on the administration of local

financial services in Metropolitan Manila and creating Local Treasury
and Assessment Districts, is hereby repealed;
6. 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 also amended or modified accordingly;
7. Likewise, 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
likewise amended or modified accordingly;
8. Sections 4(h) and 9 of Presidential Decree No. 538 on the power of
Philippine Veterans Investment Development Corporation Industrial
Authority to collect real property tax are likewise amended or modified
accordingly; and
9. All laws, presidential decrees, executive orders, presidential
proclamations, rules and regulations or parts thereof contrary to or
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,