Real Property Tax in the Philippines

What is Real Property Tax (RPT)?

Under the Local Government Code of 1991, the tax imposed to properties in the provinces, cities and within Metro Manila cities and municipalities vested by the national government to create their own revenues.

What are the types of properties that are taxable?

The tax applies to all forms of property such as land, building, improvements and machinery. Exemption is given to real properties owned by government, charitable institution, churches, cooperatives and those that are used in the supply of water and electric power, and equipment for environmental protection.

Base Tax or Assessment level.

Land Use	Assessment Level
Residential	20%
Agricultural	40%
Commercial, Industrial and Mineral	50%
Timberland	20%
Special Classes: Cultural, Scientific	15%
Hospital, and Water Districts	10%

To compute for the tax, determine first the market value of the land and building as assessed by the local Assesor.

Machinery

Use of Machinery	Assessment Level
Commercial / Industrial	80%
Residential	50%
Agricultural	40%

Tax on Farm Lands

Taxing authories	Tax rates
Province	1%
City and Mun. in MM	2%

A city or municipality in Metro Manila may impose 2% while cities and municipalities outside Metro Manila may levy the tax at the rate not exceeding 1%.

Special Education Fund(SEF) Tax is 1% of Assessed Value on all Property Classifications.

Tax Collections – first of January of every year and can be paid in four installment before the office of local treasurer on or before the end of each quarter, 2% surcharge per month but not to exceed 36 months.

The Real property tax is the most important tax revenue source of local government




References: CES Academy and Manila Board C.R.E.S for Broker Manual

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