Creba Supports Measure To Change Valuation Of Property

The Chamber of Real Estate & Builders’ Associations Inc. (Creba) has expressed its support to the proposed Property Valuation Reform Bill, or Package 3 of the Comprehensive Tax Reform Program (CTRP), which seeks to introduce changes in real-estate valuation and assessment, reorganizing in the process, the Bureau of Local Government Finance (BLGF) under the finance department.

In a statement, Creba top officials said that the existing real property valuation system in the Philippines must be overhauled to avoid multiple, overlapping, and outdated appraisals.

Creba National Chairman Charlie A. V. Gorayeb emphasized that current practice complicates government assessment and taxation and raises discrepancies that lead to right-of-way compensation problems and lengthy valuation, both of which impede the fast and efficient construction of infrastructure projects.

House Bill 4664 is timely to overhaul the formulation of the schedule of market values (SMVs) which has long been prone to compromise and corruption and wanting of direct participation by the private sector and professionals with the requisite technical know-how and training, he explained.

The group of real-estate and housing stakeholders in the country wants the BLGF, through this bill, to be given full powers and authority to appoint technically competent local assessors to the local government units who will then prepare the SMV for review and endorsement of the Regional Valuation Board comprised of four representatives from government and three from the private sector.

Property owners have long complained of inaccurate classification of raw lands by the Bureau of Internal Revenue zonal valuation schedule into other uses, such as residential, commercial or industrial way beyond their actual market price, according to Creba National President Noel Toti M. Cariño.

This introduces unfair tax burdens and conflicts in land transactions. To correct this, Creba hopes that the proposed measure must accurately classify land parcels based on their current actual use, where “raw, undeveloped and under-developed lands less than 5,000 sq m” are considered of “general purpose” and valued lower.

Both officers said that it is understandably among the main goals of the reform efforts to hike local real property tax collection and improve LGU self-sufficiency, especially during this time of pandemic.

They reiterated, though, that the alarming rate by which some LGUs uncontrollably and suddenly increase RPT to finance some programs and projects way before the global health crisis is “confiscatory,” heavily detrimental to home owners and has adverse trickle-down effects on property markets and the economy.

The group encouraged lawmakers to include a provision in the bill that will cap RPT hikes to a more reasonable level of either 30 percent from the previous assessment or via a formula based on inflationary factors.

Prior to any tax increase, Creba said that the government must enhance its tax collection efforts and reduce or avoid altogether tax amnesties or condonations which have been severely weaponized for political interest.

Source: Cebra

Registration of Untitled Land

What Are the Differences Between Registered and Unregistered Land?

Registered land refers to a piece of property that has a corresponding title attached to it, in accordance with the legal processes. It must be registered in the Registry of Deeds.

In contrast, unregistered land has no owner in the eyes of the law, and does not have a registration in the Registry of Deeds.

There are a few things you must take note of in this matter of registration of lands:

• Not all lands are capable of registration. Forest reserves, mineral lands, and previously titled lands are examples of these.

• The Certificate of Title is proof of registration. They are not the title themselves. They have the following features: (1) free from liens and encumbrances, (2) incontrovertible and indefeasible, (3) presumed valid and devoid of flaws.

What Are the Risks Associated with Letting the Land Be Unregistered?

Suppose you have all the right to secure the title, but you choose not to have the land registered, you may encounter these risks along the way:

1. Another person may claim the land and register it themselves in the Registry of Deeds.

2. The government may take the land through expropriation without just compensation due to you.

What Security Do You Have When Your Land is Unregistered?

None, since you don’t have any right to the land recognized by the law. Sure, you may have pieces of evidence, including tax declarations, showing that you own the land. But the ultimate security lies in the registration of the land, with the title assigning ownership to you.

What are the Costs Associated with Registering Land?

These are the costs involved when having your land registered:

1. Application fees

2. Technical description of the land

3. Survey of the land

4. Legal fees

5. Court fees

6. Other administrative fees

What Should We Do When Someone Else is Claiming Unregistered Land?

If they haven’t filed yet with the court, register the land immediately. If they filed a registration already, file for an opposition. This move is supported by Section 25 of Presidential Decree 1529 or the Property Registration Decree. Whether you’re filing for registration or opposition, you must take note of the following:

• Make sure that the land is capable of registration and ownership.

• Prove that you’ve been in possession of land (e.g., tax declarations, statements from other land owners beside the land).

• Show the identity of the land (look at the survey plan or blueprints for the technical aspects of the property in question).

Does the Land Registration Process Differ According to the Intended Land Use?

No. The process is similar regardless of the kind of unregistered land. There are exemptions though to this rule:

• Government housing projects. Since it’s the government that initiates the titling of the land, you don’t have to file anything. You just have to submit requirements for eligibility with the government agency involved in the project. They will be responsible for the transfer of title.

• Patents or grants. A patent is not a title. What it does, however, is give you rights to the land. You must satisfy requirements for patents to “ripen” into full ownership and for the transfer to title to happen. There are also restrictions you must honor, like for example, not selling the land within the first 10 years.

Who Pays Tax for Unregistered Land?

The person who’s in possession of the land pays for it.

Do You Have to Pay Taxes When You Register Your Plot of Land?

The process of registration has no major taxes, though there might be minor levies along the way. Some of the taxes associated with land are:

• Real property tax (2% of the assessed value)

• Capital gains tax (6% of the sale price)

• Documentary stamp tax

How Do You Determine the Value of Unregistered Land?

This question often arises when a person has the intention of selling. But do note that you cannot sell what you do not own. In the eyes of the law, an unregistered land has no owner. Nonetheless, in determining the value of unregistered land, you must ask yourself these questions:

• Are you the owner of the land? Land is more valuable when you are the owner, not just a tenant or a caretaker.

• Does the land have the capability to be registered? If it does, then its value would increase because it would attract people who vie for the ownership of it.

• Can the land be utilized for real estate, farming, development, and the like?

• Do you have direct access to the highway? A property that’s easily accessible has a greater value than a land that is far from road networks.

• Where is your land located? Ideally, it must be in a fast-growing environment.

• Is your title clean? If there are no other claimants to your land, then the property has better value because it offers security to potential buyers.

How Can You Make a Deed of Sale for a Land?

You can only have this document when you have the land registration and title. A deed of sale must be in writing and in tangible form. It must contain the following:

• date of transaction

• name and information of buyer

• description of the identity of land

• agreement between the buying and selling parties

• purchase and mode of payment

• signature of both parties

• notarization

The most important takeaway from all these is to turn your unregistered land to a registered piece of property. Maximize its potential.

No Restrictions on Conveyance of Land Covered by Free Patents

Can agricultural land that was granted a free patent be sold or transferred to another person?

Please note the limitations provided under Section 118 of Commonwealth Act (CA) 141, otherwise known as the “Public Land Act,” which reads:

“Section 111. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contacted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations or corporations.

“No alienation, transfer, or conveyance of any homestead after five years and before twenty-five (25) years after issuance of title shall be valid without the approval of the Secretary of Agriculture and Commerce, which approval shall not be denied except on constitutional and legal grounds.”

The abovementioned restrictions, however, have already been removed by Republic Act 11231 or the “Agricultural Free Patent Reform Act.”

Under Section 3 of the said law, “[a]gricultural public lands alienated or disposed in favor of qualified public land applicants under Section 44 of Commonwealth Act 141, as amended, shall not be subject to restrictions imposed under Sections 118, 119 and 121 thereof regarding acquisitions, encumbrances, conveyances, transfers or dispositions.

Agricultural free patent shall now be considered as title in fee simple and shall not be subject to any restriction on encumbrance or alienation.”

Clearly, the restrictions on the alienation and conveyance of agricultural lands covered by free patents have been removed by the Agricultural Free Patent Reform Act and are, likewise, now considered as title in fee simple. So, yes one can sell such a property.