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  • Writer's pictureZiggurat Realestatecorp

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the existing real property valuation system in the Philippines must be overhauled to avoid multiple, overlapping, and outdated appraisals.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

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