K REPRESS >

Republic of the Philippines ly eA
HOUSE OF REPRESENTATIVES lS RECEIVED a
Quezon City pare UL_p.s.

TIME:

EIGHTEENTH CONGRESS
First Regular Session

House Bit No.2985_

Introduced by Representative Junie E. Cua

The real property valuation system in the Philippines has become inefficient
and riddled with layers of bureaucracy. Despite the World Bank report that 50% of
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 have hindered the growth and huge potential of the land
sector.

With more than 23 national government agencies and 1,700 local
government units (LGUs) 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.

The bill seeks to address this by implementing reforms through the Bureau of
Local Government Finance (BLGF) under the Department of Finance (DOF). It
proposes to be reorganized and strengthened to provide 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 endorse for
approval 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.

NIE E. CUA
resentative
One District, Quirino



eavousune

REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City

EIGHTEENTH CONGRESS.
First Regular Session

HOUSE BILL NO. 2085

Introduced by Representative Junie E. Cua

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

SEC. 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

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

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

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

(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;

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

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(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;

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

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

SEC. 3. Definition of Terms — As used in this Act

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

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

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

(4) 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.

() 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;

(i) International Valuation Standards (IVS) refer to standards that provide

Property valuers with a framework composed of recognized principles and

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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 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;

()) 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.

() 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;

(q) 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

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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

(2) 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

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;

(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;

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(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
assessors 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 penatties 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 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.

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

‘SEC. 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. Bureau of Internal Revenue (BIR);

2. Department of Environment and Natural Resources (DENR);

3. Bangko Sentral ng Pilipinas (BSP);

4. National organization of government assessors;

5. National organization of appraisers in national government agencies; and
6. Private appraisal sector.

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(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

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:

(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

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

SEC. 9. The Regional Consultative Committee. -
(a) There shall be a Regional Consultative Committee that shall be chaired by the
BLGF Regional Director and shall be composed of a representative each from
the:
1. BIR Regional Office;
2. DENR — Regional Office;

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Head of Regional organization of government assessors;

Head of Regional organization of national goverment appraisers;

Head of the private appraisal sector within the region; and

Head of the bankers association within the region.

(b) The members of the Regional Consultative Committee must be performing

oane

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.

SEC. 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; concems 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 concems 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

SEC. 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.

SEC. 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

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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,

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

SEC. 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 intemal 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.

SEC. 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

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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
revenueltax 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.

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,
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 concemed
municipal halls, and city halls and in two (2) other conspicuous public places therein

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

(a) For purposes of real property taxation, the approved SMV shall in no case be
adopted by the 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.

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(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 andlor tax rates after the approval of the
‘SMV and to conduct a general revision of assessment and property 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.

SEC. 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.

SEC. 19. Conduct of Capacity Building Interventions, ~ The BLGF shall, in coordination
with the Philippine Tax Academy of the DOF, develop and conduct the necessary training for
all local assessors, local officials and staff, and other concemed BIR personnel on the
preparation of the SMV in accordance with generally accepted international valuation

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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

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

For this purpose, the BLGF shall require the mandatory submission of necessary
documents from the concerned officials or employees of national government offices or
instrumentalities, 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.

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 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

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brief but sufficient description of the real properties entered therein, their present owners,
and the dates of their most recent transfer or alienation accompanied by copies of
corresponding deeds of sale, donation or partition or other forms of alienation

SEC. 22. Duty of Official Issuing Building Permits or Certificates of Registration of
Machinery to Transmit Copy of 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. — |t 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

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

SEC. 26. Duty of Assessors to Transmit Documents to the BLGF. - It shall be the duty
Of the assessors fo transmit to the concemed 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 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

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SEC. 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

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

SEC. 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 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

SEC. 28. Failure to Comply with the Required Submission of Documents. — Any
government official or employee who fails without justifiable reason to provide or furnish data
or information required pursuant to Sections 20, 21, 22, 23 and 24 of this Act, shall be

Punished by a fine equivalent to the official's or employee's six (6) months basic salary or

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Suspension from the service for a period not exceeding one (1) year, or both, at the
discretion of the competent authority.

SEC. 29. Failure to Comply with the Valuation Standards. ~ An assessor who, for
unjustifiable reasons, fails to comply with the valuation standards developed and adopted
Pursuant to this Act, or deliberately conceals any deviations or departures from such
standards in the valuation 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.

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 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”

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

SEC. 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

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

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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. - (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.

SEC. 38. 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 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

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 (IRA) or such other sources every fiscal year, The
accumulated amount so appropriated shall be known as the Real Properly 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

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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 Act shall
be included in the annual General Appropriations Act.

SEC. 38. Implementing Rules and Regulations (IRR). - Within six (6) months after the
effectivity of this Act, the DOF, in consultation with concemed 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", and other laws consistent
with this Act shall have suppletory effect.

SEC. 40. Repealing Clause. —

(@) Sections 188, 199(0), 201, 202, 209 (a), 212, 214, 219, 220, 472 (a) paragraph 1,
472(b)(8), and 473(a) paragraph 1 and 518 of Republic Act No. 7160, otherwise
known as the "Local Government Code of 1991”, are hereby repealed:

(b) Section 3 (n) of Presidential Decree No. 464 of 1974 is hereby repealed:

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

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

(e) Section 9 of Presidential Decree No. 921 on the administration of local financial
services in Metropolitan Manila and creating Local Treasure and Assessment
Districts, is hereby repealed;

(f) 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;

(9) 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;

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(h) Section 4(h) and Section 9 of Presidential Decree 538 on the power of Philippine
Veterans Investment Development Corporation Industrial Authority to collect real
property tax are likewise amended or modified accordingly; and

(i) 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. 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

SEC. 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.

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