The Philippine Senate on Monday approved on third and final reading a priority bill seeking to fast-track and boost the monitoring of real property sales of local government units (LGUs) and to maintain a digital database of up-to-date market values.
In a 23-0-0 vote, senators voted in favor of Senate Bill No. 2386 or the Real Property Valuation and Assessment Reform Act, which aims to improve real property tax collections by updating valuations without increasing or imposing new taxes.
The bill, which was sponsored by Ways and Means Committee chairperson, Sen. Sherwin T. Gatchalian, would also grant amnesty for unpaid real property taxes and interests.
“Through this proposed measure, we not only pave the way for greater efficiency and accuracy in property valuation but also extend a helping hand to our delinquent property owners and low-income LGUs,” he told the Senate floor after the measure’s approval.
Under the proposal, a real property information system would be maintained to make accurate property valuations readily available and reduce discrepancies in these transactions.
The system would provide an up-to-date database of the sale, exchange, lease, mortgage, donation, transfer among other real property transactions.
The Department of Information and Communications Technology (DICT) will be tasked to assist lower-income class LGUs to support a real property tax administration fund.
The measure aims to boost tax collection efficiency through the automation of real property services provided by local governments.
The Bureau of Local Government Finance (BLGF), which is under the Department of Finance (DoF), would be the primary agency to develop valuation standards for real property appraisal used for taxation and to ensure LGU compliance.
A new unit of the BLGF called the Real Property Valuation Services would be established to support the development valuation of real property taxes.
New schedule of market values, the basis for calculating property tax, would take effect within two years of the bill’s approval.
During these two years, a one-time 6% cap on each type of real property tax would be imposed to allow taxpayers to adjust to new real property market values. LGUs would have the authority to extend the cap once it expires.
The House of Representatives approved a counterpart bill on third reading in December, 2022.
Last December, the DoF said the measure would boost investor confidence through the adoption of internationally accepted valuation standards.
Based on Philippine Statistics Authority (PSA) data, the gross value-added contribution of real estate and ownership of dwelling last year was at 5.6% of the Philippine gross domestic product, or about P1.37 trillion.
Real property collections by cities only grew by 5.3% between 2019 and 2021, the Congressional Policy and Budget Research Department (CPBRD) said in a report last year.
The late and former Senate President Edgardo Angara J. Angara had filed a similar measure in 2005.
“For almost two decades, a dream has echoed in the halls of Congress: a single, transparent, and updated valuation system,” Mr. Gatchalian said. “Today, that vision inches closer to reality.”
Source: Business World