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

FIFTEENTH CONGRESS
First Regular Session

House BillNo._3421

Introduced by Honorable REYNALDO V. UMALI

EXPLANATORY NOTE

This bill seeks to impose a mandatory ad valorem tax on idle lands amending for
the purpose Sections 236, 237 and 273 of Republic Act no. 7160, otherwise
known as “the Local Government Code of 1991”.

The imposition of the idle land tax under the present provisions of Republic Act
No. 7160 is optional on the part of the local government units concerned. This bill
will make it mandatory. The rate was increased from 5% to 20% of the assessed
value of the real property, in addition to the basic real property taxes due.

The proliferation of idle and unproductive private lands, many of which are held
simply for speculative purposes, should bear an economic, environmental and/or
social function

One of the basic purposes of this legislative proposal is to encourage real property
owners to put idle lands into productive use, land being a scarce resource. Doing
so will help promote the economic well-being of the community. Lands planted to
crops and/or trees, instead of having them remain idle and unproductive, might as
well serve also our environment

This will also help government, particularly local government units, to raise
additional funds to address the delivery of basic public services especially to the
less-privileged members of our society. And one of the vital public service that
needs urgent government attention is public health, particularly in the form of
medicines, supplies, facilities, equipments, hospitals, and clinics

Land owners and developers that opt to keep private lands idle and unproductive
should, in exchange, share in the burden of public health care delivery through an
enforced tax contribution

In view thereof, early consideration and approval of this bill is earnestly sought.

REYNALDO V. UMALI
Representative
2" District, Province of Oriental Mindoro


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

FIFTEENTH CONGRESS
First Regular Session

3421
House Bill No. 8421

Introduced by Honorable REYNALDO V. UMALI

AN ACT
IMPOSING A MANDATORY AD VALOREM TAX ON IDLE LANDS

AMENDING FOR THE PURPOSE SECTIONS TWO HUNDRED THIRTY
SIX, TWO HUNDRED THIRTY SEVEN, AND TWO HUNDRED SEVENTY
THREE OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS “THE

LOCAL GOVERNMENT CODE OF 1991”, AND APPROPRIATING THE.
FUNDS COLLECTED THEREFROM EXCLUSIVELY FOR THE PURPOSE

OF PROVIDING FREE ACCESS TO PUBLIC HEALTH

Be it enacted by the Senate and the House of Representatives of the
Republic of the Philippines in Congress Assembled.

SECTION 1. - Section Two Hundred Thirty Six of Republic Act No.
7160 is hereby amended to read as follows:

“Sec. 236. Additional Ad Valorem Tax on Idle Lands. A city or a
Municipality shall levy an annual ad valorem tax on idle lands
at the rate of twenty percent (20%) of the assessed value of
the property which shall be in addition to the basic real
property tax.”

SEC. 2. Section Two Hundred Thirty Seven of Republic Act No. 7160
is hereby amended to read as follows

“Sec. 237. Idle Lands, Coverage. For purposes of real
property taxation, idle lands shall include the following: (a)
Agricultural lands, more than one (1) hectare in area,
Suitable for cultivation, farming, dairying, inland fishery,
poultry and other agricultural uses, one-half (1/2) of which

femain uncultivated or unimproved by the owner of the


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property or person having legal interest therein. Agricultural
lands planted with permanent trees of at least fifty (50) trees
to a hectare, or a proportion thereof if less than one hectare,
shall not be considered idle lands. Lands actually used for
grazing purposes shall likewise not be considered idle lands

(b) Lands, other than agricultural, located in a city or
municipality, more than one thousand (1,000) square meters
in area one-half (1/2) of which remain unutilized or
unimproved by the owner of the property or person having
legal interest therein. The planting of permanent crops or
trees of at least fifty (50) trees to a hectare, or a proportion
thereof if less than one hectare, shall not be considered idle
lands.

(c) Regardless of land area, this Section shall likewise
apply to: (1) Residential lots in subdivisions duly approved by
proper authorities, the ownership of which has been
transferred to the buyer-owners, who shall be liable for the
additional tax: Provided, however, That individual lots of such
subdivisions, the ownership of which has not been
transferred to the buyer shall be considered as part of the
subdivision, and shall be subject to the additional tax payable
by subdivision owner or developer; and, (2) Vacant lots
intended for commercial, industrial or residential or
condominium projects duly approved by proper authorities
shall be the subject to the additional tax until the full
completion of the construction or project as certified by the
engineer/building officials of the local government
concerned,”

SEC. 3. Section Two Hundred Seventy Three of Republic Act No.
7160 is hereby amended to read as follows:

“Sec. 273. Proceeds of the Tax on Idle Lands. The proceeds of
the additional ad valorem real property tax on idle lands shall
accrue to a Special Public Health Fund (SPHF) of the city or
municipality where the land is located: Provided, that in case
of component cities and municipalities, twenty (20%) percent of


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the proceeds shall pertain to the SPHF of the province in which
the land is located. Such SPHF may be appropriated by the
Sanggunian concemed solely and exclusively for the purpose
of providing free access to public health facilities, supplies or
services to the less-privileged members of their local

constituency.”

Sec. 4. The imposition of the additional ad valorem tax on idle lands
as provided in this Act shall take effect at the beginning of the calendar year
next following its publication in two (2) newspapers of general circulation
The Sanggunian concerned may however postpone by ordinance the
imposition of the tax for another year to give real property owners or
developers the opportunity to be exempt from the coverage of idle lands as
defined in Section Two Hundred Thirty Seven of the Republic Act No. 7160.

Approved,