The proposed Real Property Valuation and Assessment Reform Act--one of the priority legislative measures President Ferdinand "Bongbong" Marcos, Jr. mentioned in his first State of the Nation Address (SONA)--has been approved on third and final reading by the House of Representatives.
The measure, contained in House Bill (HB) No. 6558, received 254 affirmative votes during nominal voting in the plenary session Monday night, Dec. 12. There were only four negative votes.
Deputy Speaker and Davao City 3rd district Rep. Isidro Ungab revealed the results of the votin for the bill, which is a consolidation of several measures filed in the House meant to institute reforms in real property valuation and assessment in the country.
The measure seeks to promote a just, equitable, impartial, and nationally-consistent real property valuation based on internationally-accepted valuation standards and principles.
In filing the measure, the authors noted that the poor collection efficiency of LGUs severely hampers their ability to raise revenues from real properties and correspondingly constrains their ability to provide the necessary services to their constituents.
HB 6558 tasks the Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF) to lead and manage the implementation of the law. Under the bill, “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 or valuation of lands, buildings, machinery and other real properties for taxation and other purposes.”
Such valuation standards should comply with internationally-accepted valuation standards and principles.
In coordination with the Bureau of Internal Revenue (BIR), the BGLF shall review and ensure that the Schedule of Market Values (SMVs) prepared by provincial, city, and municipal assessors is compliant with real property valuation policies and standards and recommend its approval to the Secretary of Finance.
The bill provides that “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 DOF secretary shall promulgate the rules and regulations for the valuation of real property.
However, the responsibility of preparing the Schedule of Market Values (SMVs) for the different classes of real property was given to the local government assessors, subject to the valuation standards, rules, regulations, and other specifications set by the DoF.
Preparation of the SMVs should be completed within six months following notice from the BLGF to all local assessors to submit their revised SMVs and then submitted to the BLGF Regional Office.
The proposed SMVs will undergo review by the BLGF regional office as well as the BLGF Executive Director and the BIR Commissioner but final approval rests on the shoulders of the Secretary of Finance.
The approved SMVs shall be transmitted to the concerned local government unit for the enactment of the appropriate ordinance setting the amended assessment levels and tax rates. On the other hand, the approved ordinance shall be published in a newspaper of local circulation for two consecutive weeks.
“This law shall not be construed to abridge the power of the LGUs (local government units) to lower and adjust assessment levels and tax rates in accordance with the provisions of Republic Act No. 7160, as amended, to provide it to residential property owners as deemed necessary,” the bill pointed out.
Under the bill, BGLF also has the responsibility to “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” in the country.
“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,” the bill stated.
BLGF is also required to “formulate and provide for uniform procedures on the different transactions in the assessor’s office, including the transfer, annotation, and issuance of tax declarations.” To help achieve the objectives of the law, HB 6558 establishes the Real Property Valuation Service (RPVS) within the BLGF.
A Central Consultative Committee (CCC} is also created under the bill, which shall serve as the consultative forum on matters pertaining to the setting and adoption of internationally accepted valuation standards and other related concerns on real property valuation.