REVENUE MEMORANDUM CIRCULAR NO. 85-2024 issued on July 30, 2024 circularizes Republic Act No. 12001, titled “An Act Instituting Reforms in Real Property Valuation and Assessment in
the Philippines, Reorganizing the Bureau of Local Government Finance, Granting of Tax Amnesty on Real Property, and Special Levies on Real Property, and Appropriating Funds Therefor.”
A Central Consultative Committee shall be created and shall serve as the forum on matters pertaining to the setting and adoption of international valuation standards and other related concerns on real property valuation. It shall be chaired by the head of the Bureau of Local Government Finance (BLGF) and shall be composed of a representative from each of the following:
- Bureau of Internal Revenue (BIR);
- Department of Environment and Natural Resources (DENR);
- Bangko Sentral ng Pilipinas (BSP);
- National organization of government assessors;
- Union of Local Authorities of the Philippines (ULAP):
- Land Registration Authority (LRA);
- Private appraisal sector; and
- Real estate sector:
Provided, That members of the Central Consultative Committee, or their representatives, shall be entitled to receive a per diem, pursuant to existing laws, regulations, and other issuances: Provided, further, That the representative from the private appraisal sector has been in the active practice as a real estate appraiser for at least five (5) years prior to his or her appointment as a member of the Central Consultative Committee, as certified by the Professional Regulatory Board of Real Estate Service (PRBRES): Provided, furthermore, That the representatives of the BIR, DENR and BSP must be performing valuation-related functions: Provided, finally, That the national organization of government assessors, the private appraisal sector, and the real estate sector shall be represented by their respective heads of organizations or their duly authorized and qualified representatives.
There shall be a Regional Consultative Committee that shall be chaired by the BLGF Regional Director and shall be composed of:
- Head of the BIR Regional Office or their duly authorized representative;
- Head of the DENR Regional Office or their duly authorized representative;
- Head of the respective regional organizations of government assessors or their duly authorized representative;
- Head of the private appraisal sector within the region or their duly authorized representative;
- Head of the real estate sector, who is licensed by the PRC, within the region or their duly authorized representative;
- Head of the bankers’ association within the region or their duly authorized representative;
- Head of the regional chapter of the league of cities or their duly authorized representative; and
- Head of the regional chapter of the league of provinces or their duly authorized representative:
Provided, That members of the Regional Consultative Committee, or their representatives, shall be entitled to receive a per diem, pursuant to existing law, regulations, and other issuances: Provided, further, That representatives who will attend on behalf of the respective heads shall be duly qualitied, and authorized by their organizations: Provided, finally, That the representatives of the BIR and DENR must be performing valuation-related functions in their respective agencies or sectors.
The approved Schedule of Market Values (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 options 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:
- For taxation purposes:
- As basis for the general revision of the assessment and property classification by the local assessor, and in the adjustment of assessment level and tax rates of LGUs by the Sanggunian;
- As basis in determining the market value for other property-related taxes such as local transfer tax, sand and gravel tax, community tax, and other fees and charges; and
- The Commissioner of Internal Revenue shall use the SMV or the actual gross selling price in consideration, as stated in real property transaction documents, whichever is higher, in computing any internal revenue tax.
- As basis for real property appraisals and other related purposes of all government agencies, instrumentalities, and government-owned or -controlled corporations.
- For taxation purposes:
There is 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 authorized and granted can only be availed within a period of two (2) years after the effectivity of the Act.
The 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 the Act.
The amnesty shall not extend to the following real properties:
- Delinquent real properties which have been disposed of at public auction to satisfy the real property tax delinquencies;
- Real properties with tax delinquencies which are being paid pursuant to a compromise agreement; and
- Real properties subject of pending cases in court for real property tax delinquencies.