Republic Act No. 12001

This Act shall be known as the "Real Property Valuation and Assessment Reform Act".

It is the policy of the State to promote the sustainable development and maintenance of a just, equitable, impartial, and nationally consistent real property valuation based on international valuation standards, concepts, principles, and practices.

This Act aims to:

As used in this Act:

The BLGF of the Department of Finance (DOF) shall be the primary agency to lead the implementation of the provisions of this Act. In addition to the powers vested upon it by Executive Order No. 292, otherwise known as the "Administrative Code of 1987", it shall exercise the following powers and functions:

To support the expanded functions of the BLGF and to achieve the policies and objectives declared in this Act, the BLGF shall be headed by an Assistant Secretary. The Real Property Valuation Service, hereinafter referred to as the RPVS, is hereby established within the BLGF and shall have counterpart personnel in the BLGF Regional Offices. The organizational structure and staffing patterns of the reorganized BLGF shall be subject to the evaluation and approval of the Department of Budget and Management (DBM) in accordance with civil service laws, rules and regulations.

The head of the BLGF shall be responsible for the efficient and effective day-to-day performance of the responsibilities set forth in this Act, and for the overall internal management and governance of the RPVS.

To achieve the policies and objectives declared in this Act, there shall be created a Real Property Valuation Unit (RPVU) under the Office of the Local Assessor in every province and city. Municipalities may also create an RPVU under the office of their respective local assessors. The organizational structure and staffing pattern shall be included in the annual budget of the Office of the Assessor duly approved by the Sanggunian concerned.

The BLGF Regional Offices shall, through the Regional Director, be responsible for all matters relating to valuation and the supervision of the SMVs in their respective regions. They shall:

The Regional Consultative Committee shall serve as the forum in the region for discussion on developments in the local real property market; concerns of taxpayers, civil society, and other stakeholders; outcome of compliance reporting in the region; data on complaints and appeals filed before the Local Board of Assessment Appeals (LBAA) or the Central Board of Assessment Appeals (CBAA), as the case may be; training of local government assessors in the region; appraisal and assessment concerns in general; and other matters as may be determined by the Committee. Any report thereof shall be submitted to the Central Consultative Committee, either electronically or manually.

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 persons, entities, or agencies that conduct valuation in the appraisal or valuation of lands, buildings, machinery and other real properties for taxation and other purposes. The valuation standards shall conform with the international valuation standards and principles. The BLGF, through the RPVS, shall revise the PVS every three (3) years or as often as may be necessary to ensure that the same is aligned with globally accepted principles and definitions in real property valuation with due consideration of the prevailing economic conditions.

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 PVS adopted pursuant to this Act. In all instances, depreciation shall be taken into consideration in the valuation of depreciable assets.

The provincial assessors, together with municipal assessors, and city assessors, including the lone municipal assessor in the Metropolitan Manila Area and the assessor of the PHIVIDEC Industrial Authority, shall prepare the SMVs for the different classes of real property situated within their respective LGUs, pursuant to the PVS, and other rules, regulations and specifications set by the DOF.

The preparation of the SMVs shall be completed within twelve (12) months following the notice from the BLGF to all local assessors to submit their proposed SMVs. Two (2) mandatory public consultations shall be conducted within sixty (60) days before the submission by the local assessor of the SMV. All provincial, city, and municipal assessors shall publish the proposed SMVs for at least two (2) weeks prior to the public consultation and hearing, in the official website of the LGU concerned, as well as post in two (2) conspicuous places in the provincial capitol, city hall, or municipal hall, as the case may be.

After public consultation and completion of the proposed SMV, the local assessor shall submit the proposed SMV to the BLGF Regional Office, and within forty-five (45) days from receipt thereof, the BLGF Regional Office shall review and endorse the same to the head of the BLGF: Provided, That in the case of cities and the lone municipality within Metropolitan Manila Area, the proposed SMV shall be submitted to and reviewed by the BLGF Central Office. The head of the BLGF shall review and endorse the proposed SMV within thirty (30) days from receipt thereof to the Secretary of Finance.

The Secretary of Finance shall certify that the proposed SMV is in accordance with the latest PVS, within thirty (30) days from receipt of the proposed SMV from the head of the BLGF. In the absence of action by the Secretary of Finance within the specified period, the existing SMV shall remain in effect: Provided, That if the Secretary finds that the endorsed SMV of a particular LGU was not prepared in accordance with the latest PVS, the Secretary of Finance shall order that the said SMV be remanded to the assessor of the concerned LGU for revision together with a written explanation specifying the standards not complied with: Provided, further, That the Secretary of Finance shall not exercise control over the content of the SMV.

Upon receipt by the assessor of written explanation, he or she may conduct at least one (1) public consultation prior to the submission of the SMV to the concerned BLGF Regional Office: Provided, That the revised SMV shall be resubmitted by the local assessor to the head of the BLGF within thirty (30) days from the receipt of the letter of disapproval. The Secretary of Finance shall decide on the resubmitted SMV within ten (10) days from such resubmission; otherwise, the existing SMV shall remain in effect.

The approved SMV shall take effect fifteen (15) days after its publication by the DOF in the Official Gazette or in its official website, and in the official website of the LGU concerned, as well as posting in two (2) other conspicuous public places in the provincial capitol, city hall, or municipal hall, as the case may be.

The approved SMV shall be transmitted to the concerned local chief executive and the Sanggunian, through their respective provincial, city, and municipal assessors. The concerned assessor, in coordination with the local treasurer, shall prepare a report on the revenue and tax impact of the new SMV on taxpayers including three (3) different proposed option in adjusting the existing assessment levels and tax rates, for consideration of the Sanggunian. The assessor shall thereafter submit the revenue and tax impact report, within thirty (30) days from receipt of the approved SMV, to the local chief executive and Sanggunian for consideration.

The approved SMV shall be used as basis for the determination of real property-related taxes of national and local governments, as follows:

All provincial assessors, together with the municipal assessors and the city assessors, including the lone municipal assessor within the Metropolitan Manila Area and the assessor of the PHIVIDEC Industrial Authority, shall update their respective SMVs within two (2) years from the effectivity of this Act. LGUs shall update the SMVs and conduct general revision of property assessments and classifications every three (3) years thereafter. The BLGF shall prepare the schedule for the updating of the SMVs in all provinces and cities, including the municipality within the Metropolitan Manila Area and areas under the PHIVIDEC Industrial Authority.

In case of any significant change in market value where the property is located after the SMV has been approved and prior to the next revision, such as introduction of road right of way or similar infrastructure, in times of calamities or disasters, whether man-made or natural, during a pandemic or a declared public health emergency, whether national or local, and other analogous adverse circumstances, or where a correction of errors and inequalities in the SMV is deemed necessary, the provincial and city assessors shall recommend revisions to their existing SMVs to the BLGF Regional Office, through the BLGF Regional Director exercising jurisdiction over the LGU concerned: Provided, That the city assessors, the lone municipal assessor with the Metropolitan Manila Area, and the assessor of the PHIVIDEC Industrial Authority shall recommend revisions to their existing SMVs to the BLGF Central Office: Provided, further, That in times of national emergency declared by the local chief executive, the assessor may suspend the conduct of general revision. In the case of a national state of emergency, the suspension shall take effect until the declaration of national emergency has been lifted by the President. In the case of a local state of calamity, the suspension shall be for thirty (30) days from such declaration: Provided, finally, That if the said local state of calamity continues to exist after the expiration of the thirty (30) day-period, the BLGF may recommend further extension to the said suspension to the Secretary of Finance for a period of another thirty (30) days or during the continued existence of calamity, whichever is shorter.

Such revision shall be subject to review by the BLGF Regional Office, which shall submit their recommendations to the head of the BLGF, in accordance with Sections 41 and 15 of this Act.

Compliance to this Act shall be considered as an additional indicator under the criteria of good fiscal or financial administration or financial sustainability under Section 7(a) of RA No. 11292, otherwise known as the "The Seal of Good Local Governance Act of 2019".

The BLGF shall, in coordination with the Philippine Tax Academy created under RA No. 10143, develop and conduct the necessary trainings for all local assessors, local officials and staff, and other concerned personnel on the preparation of the SMVs in accordance with the PVS and international valuation standards, concepts, principles and practices, conduct of impact studies, including the preparation of the revenue and tax impact report, preparation of compliance reports, and other subject areas.

The BLGF shall develop and maintain an up-to-date electronic database of the sale, exchange, lease, mortgage, donation, transfer and all other real property transaction and declarations in the country and on the cost of construction or renovation of buildings and other structure, and on prices of plant, machinery, and equipment.

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, and LGUs: Provided, That the mandatory submission of documents and information shall be subject to the prohibition of disclosure, and security of certain information under RA No. 10173, particularly Sections 20 and 21 thereof, and other existing laws. The updated database shall be made available at no cost to all LGUs, and other national government agencies, without need of prior approval, including the Commissioner of Internal Revenue or their duly authorized representative subject to the provision of Section 270 of RA No. 8424, otherwise known as the "National Internal Revenue Code of 1997", as amended, and Sections 12 and 13 of RA No. 10173: Provided, further, That the private sector may access the database subject to the guidelines of the BLGF: Provided, finally, That non-submission of the required documents to the BLGF will subject the concerned official or employee to administrative penalties pursuant to the provisions of Section 26 of this Act.

The BLGF shall establish mechanisms for the electronic submission of the required documents in accordance with the provisions of Chapter 2, Article III of this Act.

All provinces, cities, and municipalities shall automate their real property tax administration operation such as, but not limited to, tax mapping technology, maintain software-enabled valuation systems, undertake regular data cleansing, and computerize records management, with the guidance of the BLGF, in coordination with the Department of Information and communications Technology (DICT). The DICT shall provide, free of charge, the appropriate equipment, connectivity and interoperable information and communications technology platform, including their corresponding maintenance, and the appropriate training and capability building programs to all LGUs. The DICT shall prioritize provinces, cities or municipalities belonging to third and lower income class LGUs that do not have an existing information communication technology platform in place, to ensure compliance with this section/ The BLGF, together with the DICT, shall ensure the full automation by all LGUs of their real property systems within two (2) years from the effectivity of this Act.

The Register of Deeds shall prepare and submit to the provincial assessors, together with the municipal assessors, and city assessors, including the lone municipal assessor in the Metropolitan Manila Area and the assessor of the PHIVIDEC Industrial Authority, an abstract of the entire registry every three (3) months and copies of all contracts selling, transferring or otherwise converting, leasing, or mortgaging real property registered every end of the month free from any fees and charges. The abstract shall include brief but sufficient descriptions of the real properties entered therein, their present owners, and the dates of their most recent transfer or alienation accompanied by copies of corresponding deeds of sale, donation, or partition, or other forms of alienation.

Upon operationalization of the real property transactions database as provided in Section 22 of this Act, it shall be the duty of the registers of deeds, BIR, notaries public, officials issuing building permits, and the geodetic engineers conducting surveys within a locality to electronically transmit to the BLGF, free of charge, relevant real property transactions data, every quarter in accordance with the rules and regulations to be promulgated by the Secretary of Finance.

Notwithstanding Section 472 of RA No. 7160, the local chief executive shall appoint the provincial, city, and municipal assessors and assistant assessors, as the case may be, in accordance with civil service laws, RA No. 9646, otherwise known as the "Real Estate Service Act of the Philippines", rules and regulations and the following guidelines:

The following violations shall be punishable by a fine equivalent to one (1) month to six (6) months of the official or employee's basic salary, or by suspension from government service for not more than one (1) year, or both, in addition to any criminal and administrative penalties imposable under existing laws;

The unauthorized processing, accessing, disposal, disclosure, sharing, publication, or use of the real property information system data, including all illegal acts as defined under RA No. 10173, shall be punishable in accordance with the aforecited law, its implementing rules and regulations, RA No. 10175, otherwise known as the "Cybercrime Prevention Act of 2012", and other relevant laws.

Any person, whether natural or juridical, who violates any provision of this Act other than those punishable under Section 26 and 27 hereof shall, when warranted, be dealt with under applicable existing laws.

LGUs, which are in the process of updating their SMVs upon the effectivity of this Act, shall continue with such revisions in accordance with Section 15, 16, 17, and 19 of this Act: Provided, That proper notification and coordination with the BLGF shall be undertaken.

In case the SMVs are not yet available or updated, the Commissioner of Internal Revenue shall adopt the existing SMVs, zonal values or the actual price in consideration as stated in real property transaction documents, whichever is higher, for purposes of computing any internal revenue tax: Provided, That the maximum assessment levels in Section 218 of RA No. 7160 shall be observed.

For the first year of effectivity of the approved SMV in accordance to this Act, any increase in real property taxes shall be limited to a maximum of six percent (6%) of the real property taxes assessed on such properties prior to the effectivity of this Act: Provided, That the cap shall be applicable to each type of real property tax, including Special Education Fund, idle land tax, and other special levies in real property: Provided, further, That the LGU may enact an ordinance to impose a cap on the increase in real property taxes for the succeeding years.

There is hereby granted a real property tax amnesty which shall cover penalties, surcharges, and interests from all unpaid real property taxes, including Special Education Fund, idle land tax, and other special levy taxes, prior to the effectivity of this Act: Provided, That the real property tax amnesty hereby authorized and granted can only be availed within a period of two (2) years after the effectivity of this Act.

This relief may be availed by a delinquent property owner with the option of one-time payment or installment payment of the delinquent real property taxes within two (2) years from the effectivity of this Act.

This amnesty shall not extend to the following real properties:

The zonal values, as determined by the BIR and approved by the Secretary of Finance for internal revenue tax purposes, together with the municipal assessors, and the city assessors, including the lone municipal assessor in Metropolitan Manila Area and the assessor of the PHIVIDEC Industrial Authority, shall continue to be in force and effect until repealed, superseded, modified, revised, set aside, or replaced in accordance with Section 16 of this Act, which shall be within two (2) years upon the effectivity of this Act: Provided, That the PHIVIDEC Industrial Authority, pursuant to Section 4(h) of Presidential Decree No. 538, shall continue to levy, assess, and collect real property taxes on real properties within its jurisdiction.

Each local Sanggunian shall appropriate the necessary funds from locally generated revenues, the national tax allotment or such other sources every fiscal year to constitute the Real Property Tax Administration Fund (RPTAF), which shall be established and used for the proper implementation of the updating of the SMVs, and general revision of real property assessments, and the administration of real property taxes in all LGUs. The Secretary of Finance, through the BLGF, shall grant a subsidy to third and lower income class LGUs in order to augment their resources for purposes of creating the RPTAF.

The initial amount for the implementation of this Act shall be charged against the available funds of the national government agencies and LGUs concerned. thereafter, the necessary funding shall be included in the annual General Appropriations Act and in the respective local budgets of the LGUs concerned.

The BLGF shall submit to the joint Congressional Oversight Committee on the Comprehensive Tax Reform Program (COCCTRP) created under the National Internal Revenue Code of 1997, as amended, a detailed report on the implementation of this Act during the first quarter of every year.

The provisions of RA No. 7160, as amended, and other laws consistent with this Act shall have suppletory effect.

Within three (3) months after the effectivity of this Act, the DOF shall, in consultation with concerned stakeholders for the effective implementation of this Act. The non-promulgation of the IRR shall not prevent the implementation of this Act upon its effectivity.

If any section or provision of this Act shall be declared unconstitutional or invalid, other sections or provisions not affected thereby shall continue to be in full force and effect.

The following provisions are hereby repealed:

This Act shall take effect fifteen (15) days after its publication in the Official Gazette or in a newspaper of general circulation.

Approved,

| (SGD.) FERDINAND MARTIN G. ROMUALDEZ Speaker of the House of Representatives | (SGD.) JUAN MIGUEL F. ZUBIRI President of the Senate |