The Department of Finance (DOF) is moving to overhaul the country’s real estate taxation, targeting 2028 for the full rollout of a market value-based property valuation system.

In a statement, the DOF said the initiative aims to replace the long-standing and currently suspended zonal value system, which will bolster transparency and fairness in one of the economy's most critical sectors.

The reform is anchored on the Real Property Valuation and Assessment Reform Act (RPVARA). The Bureau of Internal Revenue (BIR), in coordination with the DOF, the Bureau of Local Government Finance, and the Philippine Tax Academy, recently conducted executive briefings to align national and local stakeholders.

Tax authorities are positioning the shift as a fundamental restructuring of how the government administers and taxes real property, moving away from fragmented valuation methods toward a unified, professionalized standard.

“RPVARA is a much-awaited, long-term reform. While it may not be a reform that will be fully felt overnight, it will shape the way the government values, administers, and taxes real property for many years to come,” BIR Commissioner Charlito Martin R. Mendoza said.

The planned shift will move away from zonal values toward a system based on market values, supported by mass appraisal, standardized valuation methods, and tighter coordination between national and local government units (LGUs).

Tax authorities expect the reform to provide a more credible basis for property-related taxation while promoting “greater fairness, consistency, and trust in real property valuation.”

For now, existing zonal values remain in place, although the BIR has suspended revisions as part of the transition. These will eventually be replaced once updated Schedules of Market Values are issued under the new framework.

While the DOF is targeting full rollout by 2028, implementation could extend to 2029 as agencies complete the groundwork, including strengthening systems, data architecture, and regulatory frameworks.

Under the law, LGUs will continue to exercise authority over tax rates and assessment levels, while valuation standards and oversight will be reinforced through the BLGF. (Derco Rosal)