[ DOF LOCAL ASSESSMENT REGULATIONS NO. 1-92, October 06, 1992 ]
RULES AND REGULATIONS RELATIVE TO THE CONDUCT OF GENERAL REVISION OF REAL PROPERTY ASSESSMENTS PURSUANT TO SECTION 201 AND 219 OF R.A. 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT CODE OF 1991
For the proper implementation of Section 219 of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, and its Implementing Rules and Regulations issued by the Oversight Committee, particularly Articles 303 and 310 thereof, the following rules and regulations are hereby prescribed, in accordance with Section 201 of the said Code, for the guidance and compliance of all concerned.
SECTION 1. General Revision of Assessment and Property Classification - (a) The Provincial, city or municipal assessor shall undertake a general revision of real property assessments within two (2) years after the effectivity of the abovementioned Code and once every three (3) years thereafter.
(b) For this purpose, the provincial assessors, the city assessors and the municipal assessors of Metropolitan Manila Area shall prepare the schedule of fair market values for the different kinds and classes of real property within the territorial jurisdiction of the province, city or municipality within one (1) year from the effectivity of the Code in accordance with the herein rules and regulations.
(c) The general revision of assessments and property classification shall commence upon the enactment of the schedule of fair market values but not later than two (2) years from the effectivity of the Code. Thereafter, the provincial, city of municipal assessor shall undertake the general revision of real property assessment and property classifications once every three (3) years.
However, if there is no sufficient time or resources to finish simultaneously the general revision work for all real property units (RPUs) within the territorial jurisdiction of a particular local government unit (LUG), a partial revision may be undertaken by kind or class of real property.
For example,
1. Purpose of general revision of real property - A general revision of property values serves two important purposes in addition to its primary purpose of equalizing and updating valuation. First, it brings to light again existing properties - rediscovers many properties which have been "lost" from the tax roll. Second, it enables the assessor to purge from the rolls the double assessments of properties which have been destroyed and that have accumulated through the years. It has the same purpose as the periodic physical inventory conducted by a business establishment.
2. A general revision of real property assessments shall be considered finished or completed when all field work in the municipality, province or city have been completed and corresponding field sheets (FAAS) of all properties within the municipality, province or city have been prepared and duly approved, and recorded in the record of assessments. Subsequently, written notices of revised assessments shall be sent to real property owners.
SECTION 2. Assessment Calendar - For the purpose of the general revision of property assessment as provided for herein, and once every three years thereafter, the assessment process and its component activities shall be governed by the assessment calendar herein prescribed, as follows:
All expenses incident to a general revision of real property assessments shall, by ordinance of the sangguniang panlalawigan be apportioned equally between the province and the municipality. The share of each municipality shall be based on the taxable area of the municipality concerned in proportion to the entire area of the province.
SECTION 4. Valuation of Real Property - In cases where (a) real property is declared for the first time; (b) there is an on-going general revision of property classification and assessment; or (c) a request is made by the person in whose name the property is declared, the provincial, city or municipal assessor or his duly authorized deputy shall, in accordance with the provisions of this Regulations make a classification, appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon: Provided, however, That the assessment of real property shall not be increased oftener than once every three (3) years except in case of a new improvement substantially increasing the value of the said property or of any change in actual use.
1. Undeclared real property found at any time or during a general revision of real property assessments shall be listed, classified, and valued like similar property in the locality on the basis of the schedule of base market values, or on the schedule of base unit construction cost in force, and assessed also like similar properties in the locality and shall be subject to back taxes of not exceeding ten (10) years from the initial assessment.
2. Owners of real property may request the provincial or city assessor or the municipal assessors of municipalities within the Metropolitan Manila Area to revise the assessment of real property, regardless of existing assessments or valuations declared by the owner under the following circumstances:
a. Revision of Assessment
a. Basis for computation of back taxes not exceeding ten years - Undeclared property if assessed is subject to back taxes for not exceeding ten years. Thus, if an undeclared real property has never been assessed since 1980 and if assessed today, 1991 the new assessment thereof takes effect as of 1981. The rule is: include year of assessment when counting back taxes not exceeding ten years.
b. Undeclared real property subject to back taxes shall be classified and valued on the basis of the schedule of base market values in force during the period the property was undeclared and unassessed. Thus, if property has never been declared since 1980 and is assessed today 1991, and assuming that there was only one schedule of base market value in force from 1981 to 1992, that schedule of base market value shall be made the basis for the computation of the market value of the property from 1981 to 1991. As "actual use" was then made a criterion in the percentage assessment of real property, that market value multiplied by the applicable assessment level then enforced is equivalent to the assessed value of that property, which should be made the basis for the computation of back taxes for the years 1981 to 1991.
SECTION 7. Undeclared Buildings and Other Improvements shall be Exempted from Foregoing Rule - The directive of this section on the collection of back taxes on the basis of the schedule of market values in force during the period back taxes should be collected shall only be applied to lands, and not buildings and other structures as well as machinery. Buildings and other structures or machinery depreciate by the passage of time and that depreciation may be physical, functional and/or economic. Estimating depreciation for every period is an impossible task; depreciation does not operate uniformly and regularly on that class of property. The amount of depreciation accumulates from year to year and is depreciated or estimated only at the time of appraisal of the property. Due to the obvious difficulty in estimating the amount of depreciation, undeclared and unassessed buildings and other structures or machinery subject to back taxes shall be classified and valued according to the schedule of base unit construction cost in use or replacement/reproduction cost of machinery at the time of appraisal and shall be assessed like similar buildings and other structures or machinery in the locality to derive their taxable or assessed values, which shall be made the basis for the collection of back taxes not exceeding ten years.
SECTION 8. Back Taxes, when Subject to or not Subject to Penalties/Interest - If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of receipt of the assessment until such taxes are fully paid.
SECTION 9. Notification of New or Revised Assessments - When real property is assessed for the first time or when an existing assessment is increased or decreased, the provincial, city or municipal assessor shall, within thirty days, give written notice of such new or revised assessment to the person in whose name the property is declared. The notice may be delivered personally to such person or to the occupant in possession, if any, or by mail to the last known address of the person to be served, or thru the assistance of the punong barangay. (Sec. 223, id.)
a. Purpose of service of notice of assessment - Although the real property tax is levied against the real property, it is the owner who pays the tax. After that tax is fixed, he is entitled to hearing on the assessment of his property; notice and hearing constitute part of due process (not strictly judicial) in taxation. If he is not satisfied with the action of the assessor in the assessment of his property, he may, within sixty (60) days from the date of receipt by him of the written notice of the assessment of his property, appeal to the Board of Assessment Appeals of the province or city where the property is located. If he does not appeal within the said period, he will be deprived of his right to be heard in the Board.
b. To whom and where the notice shall be delivered - The written notice together with the owner's copy of the tax declaration shall be addressed to the person in whose name the property is declared. It may be delivered to him personally or to the occupant in possession of the property, or by mail to the last known address of the owner thru the assistance of the punong barangay.
If personally delivered to the owner or person in possession of the property, the person serving the notice shall secure the signature of the owner or occupant on the duplicate copy of the notice, with a notation of the date when notice was served and identification, whether the recipient is the owner or occupant of the property. If assistance of the barrio captain is secured, he should be requested to place his signature on the duplicate copy of the notice.
If the notice of assessment is coursed through the mail, the notice of assessment and owner's copy of the tax declaration shall be registered with return card.
For obvious reasons, the duplicate copies of the notice of assessments signed by owners or occupants of property and the return card shall be filed in the office of the provincial, city of municipal assessor. Those are important in ascertaining whether appeals filed by owners of real property are filed within the reglementary period of sixty days from the date of receipt of such notices.
The notice of assessment and owner's copy of the tax declaration shall be delivered or mailed to property owners within thirty days from entry of tax declarations covering assessments of property in the Record of Assessments.
c. Notices of assessment are exempt from postal charges -All real property assessment notices or owner's copies of tax declarations sent thru the mails by the assessor shall be exempt from the payment of postal charges or fees. (Sec. 282, id.)
Form of Notice of Assessment of Real Property, RPA Form No. 2, marked as Annex "H," shall be used; it may be mimeographed by assessors for their use.
SECTION 10. Actual use of real property as basis of assessment - Real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. (Sec. 217, id.)
A. Actual Use refers to the purpose for which the property is principally or predominantly utilized by the person in possession of the property. (Sec. 199(b), id.)
B. Assessment is the act or process of determining the value of the property, or proportion thereof, subject to tax, including the discovery, listing and appraisal of properties. (Sec. 199(f), id.)
Assessment is the determination of the value of the things subject to the tax and the amount of the tax paid by each individual. (Dollar Savings Bank vs. United States, 86 U.S. 337, cited in Martin's Revised Administrative Code, Vol. 2, p. 493)
SECTION 11. Rules for Assessment of Lands -
A. Lands actually and principally used for residential, agricultural, commercial, or industrial or mineral purposes shall be classified and valued according to the schedule of unit base market values and assessed at their corresponding levels of assessment, which shall be fixed through an ordinance by the Sanggunian concerned.
B. Land located in areas of mixed lands uses - In an area of mixed land uses, as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification, valuation and assessment thereof. If the predominant use is residential, all lands in that area shall be classified, valued and assessed as residential; if the predominant use is commercial or industrial, all lands in that area shall be classified, valued and assessed as such.
C. A lot or parcel of land classified and valued as commercial or industrial occupied by a building used both for residential and commercial or industrial purposes shall be assessed on the basis of the predominant use of the building or buildings. If the predominant use of the building is residential, the assessment level fixed thereon for residential land shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values; if industrial or commercial, the assessment level for industrial or commercial, shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values.
D. Vacant lands shall be classified, valued and assessed like similar lands in the locality.
E. Agricultural land convertible into urban subdivision such as residential, commercial or industrial shall be classified, valued and assessed as agricultural until such time that they shall have been converted and developed into such subdivisions. This rule shall also apply to lands already approved by proper authorities as subdivision but have not yet been actually developed for the purpose.
As soon as a portion of the subdivision is finally divided, converted and developed into residential lots, the same shall be valued and assessed like similar lots in the locality. Portions of the subdivision not yet developed and converted into residential, commercial or industrial lots shall be classified, valued and assessed as agricultural.
Roads or streets in urban subdivisions, unless already donated or turned over to the barrio (barangay), municipality or city, shall be listed in the name of the subdivision owner and shall be valued on the basis of the cost of cementing, asphalting or paving them with gravel and sand per square meter. The roads or streets shall be assessed at the rate not exceeding the assessment level applicable to lands located in the subdivisions.
SECTION 12. Special Properties (Lands) -
A. Lands actually, directly and exclusively used for cultural or scientific purposes, located in residential, commercial or industrial areas shall be classified and valued as residential, commercial of industrial in accordance with the schedule of base market values determined on the basis of that schedule.
B. Lands owned by local water districts and government-owned or controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power, located in residential, commercial or industrial areas shall, likewise, be classified and valued as residential, commercial or industrial in accordance with the schedule of base market values, and shall be assessed at ten percent (10%) of the market values.
C. If those special classes of lands are, however, located in areas of mixed land uses, such as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification and valuation of those special classes of land and shall be assessed at the corresponding levels of assessment.
SECTION 13. Land used for Religious, Charitable or Educational Purposes -
A. Lands actually, directly and exclusively used for religious, charitable or educational purposes located in residential, commercial or industrial areas shall be classified, valued and assessed as residential, commercial or industrial.
B. If those lands actually, directly and exclusively used for religious, charitable or educational purposes are, however, located in an area of mixed land uses, such as residential with commercial or industrial, the predominant use of lands in that area shall govern the classification, valuation and assessment of those lands used for religious, charitable or educational purposes.
SECTION 14. Lands Owned by the Republic of the Philippines or Any Political Subdivisions Shall be Classified, Valued and Assessed Like Similar Lands in the Locality.
SECTION 15. Rules for Assessment of Buildings and Other Improvements - A. Buildings used exclusively for residential purposes shall be classified and valued in accordance with the schedule of base unit construction cost, and shall be assessed by applying the corresponding assessment levels fixed by ordinances of the sangguniang panlalawigan, panlungsod or the sangguniang bayan of a municipality within the Metropolitan Manila Area, pursuant to Section 218 of the Code.
B. A building used both for residential and commercial or industrial purposes shall be classified and valued in accordance with the schedule of base unit construction cost and shall be assessed on the basis of the predominant use of the building.
C. Special properties (buildings and other improvements)
E. Buildings and other improvements owned by the Republic of the Philippines or any of its political subdivisions shall be classified, valued and assessed like similar buildings and improvements in the locality. If the buildings and improvements are of a kind not covered by the schedule of base unit construction cost, they shall be valued at their fair market value at the time of appraisal and shall be assessed like similar buildings and improvements in the locality.
SECTION 16. Assessment Levels Defined. -
a. Assessment level is the percentage applied to the fair market value to determine the taxable or assessed value of the property. (Sec. 199(g), id.)
b. Assessment level distinguished from current or effective assessment level - When not qualified, assessment level refers to those prescribed in the Code, otherwise known as statutory or legal assessment levels and applied to fair market values of real property determined on the basis of the schedule of base market values or the schedule of base unit construction cost.
Current or effective assessment level, on the other hand, refers to the level of assessed values of real property actually sold as applied to their corresponding sales prices during a certain period. That level may be ascertained only by conducting an assessed sales ratio study. The study has a two-fold purpose: to ascertain whether the statutory levels are being achieved or approximated, and whether there is uniformity in the assessment of real property for taxation purposes in a province, city or municipality.
Assessment levels fixed by law are affected by the rise and fall of real property values in the market. If prices generally increase, the statutory levels would exceed the current or effective assessment level; if prices generally decrease, the statutory levels would fall below the current or effective assessment level.
c. Assessed or taxable value as basis of computation of tax - Market Value determined by assessors on the basis of the schedule of base market values or the schedule of base unit construction cost are not the ultimate basis for the computation of real property tax. The assessment level fixed in accordance with the Code has to be applied to the market values or real property to derive their taxable or assessed values.
SECTION 17. Assessment Levels - The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following:
a. On Lands:
1. Residential
e. Assessment levels above shall be applied initially during the first general revision of real property assessments to be undertaken pursuant to Section 219 of the Code. Thus, the assessment levels applied in the 1981-84 general revision of real property assessments that took effect on July 1987, shall be maintained until after the first general revision of real property assessments under the provision of said Section 219 of the Code, which local assessors are mandated to conduct, shall have taken effect.
f. Increase/decrease of assessment levels - The assessment levels for the different classes of real property may be increased or decreased at rates to be fixed by ordinance of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan of a municipality within the Metropolitan Manila Area, provided, however, that in no case shall such increase or decrease of the assessment levels shall be made effective in between general revision of assessment periods.
SECTION 18. Preparation of Schedule of Market Values - Before any general revision of real property assessment is made, there shall be prepared for each municipality or city, a schedule of market values for different classes or real property therein situated in such form and detail as shall be prescribed herein.
Said schedule, together with the abstract of the data on which it is based, shall be submitted to the sanggunian concerned for enactment by ordinance not later than the thirty-first of October immediately preceding the period the general revision of assessments shall be undertaken and prescribed in the assessment calendar herein. The sanggunian concerned shall have ninety (90) days from the date of receipt within which to review said schedule to determine whether it conforms with the regulations set forth herein.
SECTION 19. Duty of the Provincial/City/Municipal Assessor - It is the duty of all provincial and city assessors, and municipal assessors of the municipalities within the Metropolitan Manila Area to prepare or cause to be prepared a schedule of market values as the basis for the appraisal and assessment of lands, buildings and other improvements situated in their respective jurisdiction within one (1) year after the effectivity of the Code and every three (3) years thereafter.
Market values for real property situated within the province shall be prepared by the provincial assessors who shall be assisted by the municipal assessors of municipalities within his jurisdiction.
SECTION 20. Scheduled Reflective of Fair Market Value - The schedule of market values of real property shall reflect the fair market values of real properties in the locality, irrespective of the manner in which they are actually used.
SECTION 21. Approaches Used to Estimate Values - As discussed in Section 34 hereof, to estimate value, three approaches may be used in the construction of the schedule of fair market values. Sales Analysis Approach (also called Market Date Approach), the Income Capitalization Approach, and the Replacement or Reproduction Cost Approach.
A. Under the Sales Analysis Approach, the price paid in actual market transactions are considered. It requires the accumulation of valid sales data. Such data can be secured from the Office of the Registrar of Deeds and notaries public, who are required under Section 278 of the Code to furnish the provincial, city or municipal assessors with copies of all contracts, conveying, leasing, or mortgaging of real property, received or acknowledged before them. Other evidences of market values to augment sales data re: bids, offers to sell, opinions of informed real estate appraisers, brokers, salesmen, dealers or bank officials. Values declared by property owners or administrators embodied in sworn statements filled pursuant to Section 202 of the Code fully evaluated, may also be considered as additional source of information of Market Data Analysis.
In the absence of unavailability of valid sales data, price indices of real property situated in the different provinces, cities and municipalities, compiled in the National Statistics Office and the Economic Research Division of the Central Bank of the Philippines, may be used as primary basis in computing the fair market value that will be incorporated in the schedule of market values.
1. Analysis of Sales Transactions - The elements that enter into sales transactions should be analyzed thoroughly, to determine the relationship between the amount of consideration contained therein and the current value of subject property. Only sales transactions which meet more or less the following criteria shall be considered for the sale analysis:
B. Income Capitalization Approach. - Is a direct approach to estimate the value of property. It is based on the theory that the value of an income producing property is no more than the return derived from it. It requires an analysis of the income produced by a property in order to estimate the sum which might be invested in the purchase of the property. A detailed financial study must be made of the property. Gross annual income is either determined from actual figures or is estimated. Annual expense figures are obtained from the owner. The income, operating expenses and fixed charges of the subject property are analyzed and the expenses derived thereof are the subtracted from the gross income. The resultant net income capitalized at a rate which the investor of the property can expect as reasonable return or interest prevailing in the locality. The capitalized value of the income represents the present value of the property.
Income method may be utilized to check results derived from sales analysis approach in the case of rental or income producing property.
C. Reproduction Cost (New) Approach - This is a factual approach used exclusively in appraising man-made improvements such as buildings and other structures. This method depends on guides and standards, based on such data as materials and labor costs.
The "reproduction or replacement cost approach" makes use of a value estimate of reproducing a new replica property within the same or closely similar materials on the basis of current construction materials and labor costs. Unit base construction cost is developed on a per square meter or per cubic meter basis for typical buildings or structures. The unit cost is multiplied by the ground area or volume, as the case may be, of the subject structure to derive its total reproduction or replacement cost, allowance for depreciation is deducted to arrive at the depreciated cost of subject property.
1. Quantitative Analysis Method - The schedule of unit base construction cost for buildings shall be established by the quantitative analysis method of the reproductions cost (new) approach. A base unit cost for each type and sub-typed of typical buildings in the province or city or municipality shall be established.
By this method, a detailed inventor of all materials and labor that went into the finished buildings is made.
The first step in this method is collection or preparation of plans and specifications for adopted typical (sample) buildings, representing each type. Data on cost of construction materials prevailing in the city or province or municipality shall then be gathered and listed. Labor cost and others that contribute to the construction cost may be estimated by proper consultation with building contractors, engineers, architects and labor agencies.
From the plans and specifications, materials and labor quantities are then computed for all parts of the structures. The materials cost shall be determined by applying the price for building materials computed from the material quantities that went with finished buildings. The amount added to the estimated labor cost and miscellaneous expenses, results in the total cost miscellaneous expenses, results in the total cost of the subject building. The base unit cost shall be then determined by dividing this total cost by the average area in the square meters of the subject structure.
SECTION 22. Coverage of the Schedule of Market Values for Urban Lands - As much as possible, the schedule of market values for urban lands which comprises principally residential, commercial and industrial lands, shall cover the full extent of areas in the city of municipality.
The said schedule shall be in the form as shown in Annex "A"* attached herein.
SECTION 23. Sub-Classification of Residential, Commercial and Industrial Lands - Generally, market values of urban lands are enhanced by their proximity to commercial and government center, educational and religious institutions, highways and availability of water, electricity, telephone system and transportation facilities, as well as accessibility to good roads and avenues.
Residential lands are valuable if they are accessible to employment opportunities and shopping, recreational, educational and cultural centers, Value of commercial lands depend upon their access to suitable markets, while industrial lands are valuable if accessible to source of raw materials, roads, ports, electric power and labor.
On the basis of these influences on value, residential, commercial, and industrial lands located within the contiguous urban areas of the city or municipality, may then be sub-classified into first, second, third or more classes, and schedule of base unit market value per square meter shall be determined and fixed for each sub-class. The sub-classification may be, as much as possible, guided with the criteria herein attached marked as Annex "E". The number of sub-classes for each class of the urban lands shall be left to the discretion of the provincial and city assessor, and the municipal assessors of the municipalities within the Metropolitan Manila Area depending upon the existing variations of value factors in such land. The criteria established herein, may vary or be modified to suit the actual physical developments and conditions obtaining in a city or municipality.
However, lots located in the populous centers of barangays separate from the contiguous urban areas defined hereof may not be sub-classified in accordance with the criteria herein referred to. A schedule of barangay street unit land value shall be established independently on the basis of the sales value as well as opinions on declared values of representative lots therein.
For this purpose, separate urban unit value map shall be prepared for every barangay concerned. This will form an integral part of the schedule of market values.
SECTION 24. Highly or Fully Developed Residential Subdivisions - In cases of highly or fully developed residential subdivisions, a schedule of base unit market values may be established independently on the basis of the exclusive sales analysis on the lots of such subdivisions. The lots of these subdivisions may not be sub-classified in accordance with the criteria established. In this case, a schedule of base land values shall be established depending on the influence of physical development and facilities particularly those highly or fully developed residential subdivisions.
SECTION 25. Modifications for Variations (Urban Lands) - Theoretically, in establishing unit base values, we eliminate such value factors as size, shape, location with respect to public ways, and topography because they are generally the points of variation that every parcel of land nearly has, in relations to a standard parcel and with one another. This is especially true with respect to developed urban areas, and it is necessary to make specific adjustments in the valuation of individual parcels for the eliminated factors. Specifically, modifications may be for the depth, corner, alley, irregular shape, and topography. It is noteworthy to consider, that the importance of these modifications depend upon the degree to which they are reflected on the local real estate market. It is safe to assume, nevertheless, that depth is one of the many factors that is commonly reflected in the market and must be considered unsparingly.
SECTION 26. Depth Influence and Standard Lot Depth - It is a recognized fact that the urban lot value tapers from street frontage to the rear. The nearest portion or strip to the street has the highest value and the value of each successive parallel strip across a given lot decreases as distance to street increases. This brings about the necessity of adopting a standard depth for each residential or commercial land. Considering that individual lots used for industrial purposes are generally large in area, standards depth for industrial lands may not be considered.
The standard depth may be established after careful study of various depths in the locality. If, for instance the dominant or prevailing lot depth among the residential lots in the city or municipality is 20 meters, this depth maybe fixed as a standard depth for residential lands within the locality. Standard depth for commercial lands shall be established in similar manner.
SECTION 27. Unit Value Construction - Lot values taken from sales transactions shall be translated into value per square meter attributed to the frontage strip within the standard depth. For a lot conforming to the established standard depth and space (rectangular), estimating value per square meter would be an easy process. This is done by merely dividing the total purchase price by its area. However, the same becomes complicated if a lot is not rectangular in shape whose depth exceeds the standard.
For instance, a residential lots of 20 by 75 meters or 1500 square meters in area, is sold at P100.00 per square meter or P150,000.00. Suppose further that the standard depth established for residential lands in the locality is 20 meters and the percentage values are 100% for the first strip; 80% for the second strip; 60% for the third strip; 40% for the fourth strip and 20% for the remaining strip or strips. The value per square meter of the area within each strip may be computed as follows:
The unit sales values which corresponds to the first strip of the lots involved in the sale analysis are the values to be entered in column 8 of DF-RPA (SMV) Form No. 1 attached herewith, marked as Annex "B * .
SECTION 28. Use of Working Map - Preparatory to the final computation of the schedule of unit base market values for urban lands, the assessor should be prepare an outline map on which to record information of the determined unit land values. A map must be drawn to scale, to cover the full extent of the continuous urban areas in the city or municipality and show all road system, waterways, railroad lines, including all principal landmarks within the area. Such map is of a great importance in determining comparative land values.
SECTION 29. Establishing Unit Base Market Value for Each Sub-Class of Residential, Commercial and Industrial Lands - A unit base market value for each sub-class of residential, commercial and industrial lands shall be established and reflected in the schedule of market values.
SECTION 30. Grouping Unit Sales Values by Class - Preparatory to the computation of the final base unit values, each sub-class (say first class residential) shall be segregated from the record of sales entered in DF-RPA (SMV) Form No. 1 and subsequently entered exclusively in the prescribed form known as DF-RPA (SMV) Form No. 1-A, marked as Annex "C"* . Only sales values involving non-corner lots located along streets or roads, with more or less common elevation, shall be included in cases of sales analysis to establish unit market values for urban lands. In view of the influence on values peculiar to them, corner and interior lots shall be excluded in the sales analysis. Sales documents used as basis in the established of values shall be separately filed and kept for future reference.
SECTION 31. Computation for the Unit Base Market Values - The unit base market values of a subject sub-class of land is determined by dividing the sum of the Average and Median of the unit sales involved, by two, as illustrated in Annex "D"* .
The average is determined by dividing the sum of the sales values involved by the total number of sales values.
The Median is the middlemost sales value among the unit sales values involved, arranged in numerical order.
SECTION 32. Computation for the Unit Base Market Values by Income Capitalization Approach - The unit base market value of a subject sub-class of land is determined by dividing the net income attributable to the land, which is the difference of the gross land income and the corresponding operating expenses by the appropriate capitalization rate.
For instance, a 400 square meter commercial lot is rented at P1,000.00 a month. Determine its estimated value. The interest rate prevailing in the area is 20% (Bank Rate).
The percentage of corner influence may be determined in the following manner:
The percentage of corner influence for commercial lands shall be determined in similar manner. Corner influence however, shall not be considered on industrial lands.
SECTION 34. Setting up the Unit Value Map - Together with the selection of unit measure and standard depth as preliminary steps to unit value establishment, is the preparation of unit land value map upon which information and conclusions of value may be recorded graphically. This map is very essential in making comparisons of value. The first step in setting up unit land value map is to construct a block outline map. The tax map drawn to a much smaller scale showing a large area of all the tax-mapped district is preferable. Such map should only indicate street lines and other principal landmarks such as rivers, railroad lines and the like, as well as government buildings, known private buildings, parks, etc. The main purpose is to have as much white space as possible on which to record information of value and established unit base market values. It is often necessary to exaggerate the street width at the expense of the block areas and to indicate the street names and other identifying information outside the street areas.
SECTION 35. Coverage of the Schedule of Market Value for Agricultural Lands. - The schedule of market value for agricultural lands shall cover all agricultural lands predominantly rural in nature that are beyond potential urban limits and generally at a great distance from the poblacion of the city or municipality.
The schedule shall be in a form as shown in Annex "F"* attached herein.
SECTION 36. Classification of Agricultural Lands - The principal crop used shall be the basis of classification of agricultural lands such as rice land, corn land, coconut land and other crop land, that is predominantly developed in the locality. Each class shall further be sub-classified into the first, second, third or more classes on the basis of their productivity.
The productivity classification of several crop lands shall be prepared based on information which may be obtained from the Department of Agriculture.
The productivity classification of crop lands shall be determined by the assessor on the basis of the annual yield per hectare. Each crop land should use the applicable unit of measure, such as, cavans of palay, picul for sugar, kilos for fishponds, etc. For fruit bearing trees, the number of fruits shall be the basis of measure.
In setting up the ranges of annual yield in each class, the Assessor should see to it that the ranges are reasonable.
SECTION 37. Establishing the Schedule of Unit Base Market Values for Agricultural Lands - The schedule of unit base market value for the different classes of agriculture lands shall, as much as possible, be established by the sales analysis approach. However, for lack of market data, the income capitalization approach may be resorted to.
In sales analysis method, unit sale values involving one class of crop shall be entered separately in a prescribed form known as DF-RPA (SMV) Form No. 2-A attached herewith marked as Annex "G"* and consequently adjusted with location factor as illustrated in Annex "H,"* also attached herewith.
The following guides are suggested for location adjustment on values for agricultural lands:
Type of Roads:
(a) Provincial or National Highways - No deductions from basic value 100%
(b) For other all-weather roads - 3% deduction from basic value 100%
(c) Dirt Roads - 6% deduction from basic value 100%
(d) For no road outlet - 9% deduction from basic value 100%
All-weather roads include municipal, provincial, national and all other public roads traversable by trucks, cars, and other forms of motor vehicles under any kind of weather.
In the Income Capitalization Approach, several processes are possible, namely (a) gross production minus production expenses per hectare (b) rental income per hectare (c) income per hectare on sharing basis. However, income should be the basis of capitalization value. Capitalized value which will be considered the market value of the land, must be equal to the net income per hectare divided by the rate of capitalization.
Accordingly, this approach or estimating value, requires information on crop production in the area and the generally expected rate of interest on money invested for the preceding years. Crop production and average cost production may be obtained from the Bureau of Agriculture Extensions and the Bureau of Plant Industry, thru their respective offices, while prices of crops can be obtained from the National Food Authority and the Department of Industry and Trade; and the rate of Interest from the Philippine National Bank, Development Bank of the Philippines of Rural Banks.
For illustrations purposes, a sample computation for the schedule of unit base market value for rice land through the sales analysis approach is enclosed in Annex "I".
SECTION 38. Classification of Buildings - Buildings shall generally be classified in accordance with the structural designs for which they are intended regardless of their actual use, such as residential, commercial, industrial, or farm house. The classification system should embrace only such structures as are commonly found in the city or province.
Under the use design classification, buildings may be grouped into the following:
A. RESIDENTIAL BUILDINGS
TYPES OF BUILDINGS
The schedule for building shall be in the prescribed form as shown in Annex "J"* attached herein.
SECTION 39. Addition and Deduction Factors - Structures falling under one classification are not all exact replica of each other, or of the standard adopted in the preparation of the schedule of values. It follows therefore that their values are not exactly equal, even if their area and classification may be the same.
To compensate for this difference in the value, a set of adjustment factors must be prepared, to go with the schedule. It should only treat items that are commonly found deviating from the standard and may be expressed as percentage of the base unit construction cost listed in the schedule. Addition and deduction factors may be prepared by the quantitative analysis method. Samples of the Addition and Deduction Factors of the schedule of base unit cost are shown below.
EXTRA ITEMS AS COMPONENT PART OF BUILDINGS
SECTION 41. Format of the Schedule of Base Unit Cost for Buildings - The schedule of base unit cost for buildings shall be prepared in such form and manner as illustrated in Annex "J"* .
SECTION 42. Forms to be Used and Manner of Submittal of Schedule of Market Values - The schedule of market values for all classes of real property situated in one city or municipality shall be prepared in accordance with the format.
The original and duplicate copies of such schedule prepared in book form (preferably cloth bound) shall be submitted to the Sanggunian concerned for review together with all essential materials and consecutively arranged in the following manners.
1. Letter of Transmittal
2. Schedule of Values for Residential, Commercial and Industrial lands (See Annex "A")
3. Unit Land Value Map (Residential, Commercial and Industrial Lands)
5. Tabulation of Sales Values for each class of Residential, Commercial and Industrial Lands taken from DF-RPA Form No. 1 (see DF-RPA (SMV) Form No. 1-A, marked as Annex "C")
6. Computation for the Unit Base Market Value. (See illustration example marked as Annex "D")
7. Criteria for Sub-classification of Urban Lands situated in Residential, Commercial and Industrial Areas. (See Annex "E")
8. Schedule of Values for Agricultural Lands. (See Annex "F")
9. Statement of Sales Values of Agricultural Lands (See Annex "G")
10. Tabulation of Unit Sales for Each Class of Agricultural Land taken from DF-RPA (SMV) Form No. 2. (See Annex "H")
11. Computation of Unit Base Market Values on Agricultural Lands. (See Annex "I")
12. Classification of Buildings and other Improvements.
13. Schedule of Values and other Classes of Lands such as Timber and Forest Lands, mineral, Pasture Lands, Memorial Parks or Cemetery, etc.
14. Schedule of Buildings Base Unit Cost. (See Annex "J")
15. Depreciation Table on Buildings and other structures.
16. Other information relevant to the establishment of Unit Base Value for lands, buildings, and other improvements.
SECTION 43. Repealing Clause - All rules and regulations inconsistent with the provisions of these Assessment Regulations are hereby modified accordingly.
Adopted: 6 Oct. 1992
* Text available upon request at the Office of the National Administrative Register (ONAR), U.P. Law Center, Diliman, Quezon City.
SECTION 1. General Revision of Assessment and Property Classification - (a) The Provincial, city or municipal assessor shall undertake a general revision of real property assessments within two (2) years after the effectivity of the abovementioned Code and once every three (3) years thereafter.
(b) For this purpose, the provincial assessors, the city assessors and the municipal assessors of Metropolitan Manila Area shall prepare the schedule of fair market values for the different kinds and classes of real property within the territorial jurisdiction of the province, city or municipality within one (1) year from the effectivity of the Code in accordance with the herein rules and regulations.
(c) The general revision of assessments and property classification shall commence upon the enactment of the schedule of fair market values but not later than two (2) years from the effectivity of the Code. Thereafter, the provincial, city of municipal assessor shall undertake the general revision of real property assessment and property classifications once every three (3) years.
However, if there is no sufficient time or resources to finish simultaneously the general revision work for all real property units (RPUs) within the territorial jurisdiction of a particular local government unit (LUG), a partial revision may be undertaken by kind or class of real property.
For example,
a. By Kind:
1st year - All lands
2nd year - All other real properties
b. By Class:
1st year - All Commercial and Industrial Properties
2nd year - All Other Classes of Properties
1. Purpose of general revision of real property - A general revision of property values serves two important purposes in addition to its primary purpose of equalizing and updating valuation. First, it brings to light again existing properties - rediscovers many properties which have been "lost" from the tax roll. Second, it enables the assessor to purge from the rolls the double assessments of properties which have been destroyed and that have accumulated through the years. It has the same purpose as the periodic physical inventory conducted by a business establishment.
2. A general revision of real property assessments shall be considered finished or completed when all field work in the municipality, province or city have been completed and corresponding field sheets (FAAS) of all properties within the municipality, province or city have been prepared and duly approved, and recorded in the record of assessments. Subsequently, written notices of revised assessments shall be sent to real property owners.
SECTION 2. Assessment Calendar - For the purpose of the general revision of property assessment as provided for herein, and once every three years thereafter, the assessment process and its component activities shall be governed by the assessment calendar herein prescribed, as follows:
SECTION 3. General Assessment Revision, Expenses Incident thereto - The sanggunian of provinces, cities and municipalities within the Metropolitan Manila Area shall provide the necessary appropriations to defray the expenses incident to the general revision of real property assessment.1. Acceptance of sworn statements declaring true values of real property to be filed by real property owners/administrators. Offices of Provincial, City and Municipal Assessors Jan. 1 to June 30 of the first year. 2. Gathering and analysis of data and preparation of preliminary Schedule of Market Values. Offices of Provincial, City and Municipal Assessors July 1 to September 30 of the first year 3. Preparation of final schedules of Market Values Provincial and City Assessors and Municipal Assessors of municipalities within the Metropolitan Manila Area Not later than October 15 of the first year 4. Submittal of schedules of Market Values to the Sanggunian concerned for enactment by Ordinance Provincial and City Assessors and the Municipal Assessors of municipalities within the Metropolitan Manila Area Not later than October 31 of the first year 5. Enactment of Ordinance adopting the Schedules of Market Values Sangguniang Panlalawigan or Panlungsod or Sangguniang Bayan of a municipality within the Metropolitan Manila Area Not later than January 31, of the second year. 6. Publication of the Schedules in the newspaper of general circulation in the locality or Posting in the Provincial Capitol, City or Municipal Hall and in two other conspicuous public places. Sanggunian concerned Not later than February 29 of the second year. 7. Preparation of Field Sheets, Tax Declarations and Notices of Assessments, and mailing or delivery of said notices to property owners. Provincial, City or Municipal Assessors Not later than September 31 of the second year. 8. Preparation of Assessment Rolls and accomplishment of Real Property Tax Orders of Payment (RPTOP) (Part A) by Provincial and City Assessors and the Municipal Assessors of municipalities within MMA copies thereof sent to Provincial, City and Municipal Treasurers. Provincial, City or Municipal Assessors Not later than November 30 of the second year. Accomplishment of Part B of RPTOPs and delivery thereof to property owners. Provincial, City and Municipal Treasurers Not later than December 31 of the second year 9. Effectivity of the revised new Real Property Assessments. Not later than January 1st of the third year
All expenses incident to a general revision of real property assessments shall, by ordinance of the sangguniang panlalawigan be apportioned equally between the province and the municipality. The share of each municipality shall be based on the taxable area of the municipality concerned in proportion to the entire area of the province.
SECTION 4. Valuation of Real Property - In cases where (a) real property is declared for the first time; (b) there is an on-going general revision of property classification and assessment; or (c) a request is made by the person in whose name the property is declared, the provincial, city or municipal assessor or his duly authorized deputy shall, in accordance with the provisions of this Regulations make a classification, appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon: Provided, however, That the assessment of real property shall not be increased oftener than once every three (3) years except in case of a new improvement substantially increasing the value of the said property or of any change in actual use.
1. Undeclared real property found at any time or during a general revision of real property assessments shall be listed, classified, and valued like similar property in the locality on the basis of the schedule of base market values, or on the schedule of base unit construction cost in force, and assessed also like similar properties in the locality and shall be subject to back taxes of not exceeding ten (10) years from the initial assessment.
2. Owners of real property may request the provincial or city assessor or the municipal assessors of municipalities within the Metropolitan Manila Area to revise the assessment of real property, regardless of existing assessments or valuations declared by the owner under the following circumstances:
- If real property has suffered permanent loss of value by reason of typhoon, flood, fire or other calamity.
- If improvements have been introduced to real property or there has been change in the classification or use of property, such as agricultural lands converted into urban subdivisions, or residential to commercial. In the absence of such new improvements or change of use, the assessment of real property shall not be changed during the three-year period.
- Effectivity of assessment under the foregoing cases shall be as follows:
(1) Cancellation or reduction of assessment shall be made effective the quarter next following the quarter during which the cause or ground for cancellation or reduction has occurred.
(2) Increased assessment shall be made effective the year following the year of re-assessment, i.e., revised assessment made this year (1992) shall be made effective in 1993.
(3) No re-assessment of real property should be made in the absence of any circumstances aforementioned.
a. Revision of Assessment
- An assessment revised this year 1992 takes effect the following year 1993; that in 1993 takes effect in 1994.
- Cancellation of reduction of assessments caused by total or partial destruction of property takes effect on the first day of the quarter following the quarter in which the total or partial destruction occurred. Thus, if property was totally or partially destroyed on July 5, 1990, its assessment shall be cancelled or reduced effective October 1, 1990 (fourth quarter). Accordingly, if the same property was totally destroyed, only the first to the third installments of the taxes due for the first to the third quarters of that year on the basis of the cancelled assessment are collectible; if partially destroyed, only the first to the third installments of the taxes due for the first to the third quarters of that year on the basis of the cancelled assessment; and the fourth installment of the taxes due for the fourth quarter of that year on the basis of the reduced assessment effective October 1, 1990, are collectible.
- When the property is totally destroyed, its assessment shall be cancelled by Notice of Cancellation of Assessments; when property is partly destroyed, a revised tax declaration shall be prepared and issued to cancel the tax declaration covering the original assessment. On the reverse side of the revised tax declaration, state the quarter and year instead of year only as the effectivity of the tax.
a. Basis for computation of back taxes not exceeding ten years - Undeclared property if assessed is subject to back taxes for not exceeding ten years. Thus, if an undeclared real property has never been assessed since 1980 and if assessed today, 1991 the new assessment thereof takes effect as of 1981. The rule is: include year of assessment when counting back taxes not exceeding ten years.
b. Undeclared real property subject to back taxes shall be classified and valued on the basis of the schedule of base market values in force during the period the property was undeclared and unassessed. Thus, if property has never been declared since 1980 and is assessed today 1991, and assuming that there was only one schedule of base market value in force from 1981 to 1992, that schedule of base market value shall be made the basis for the computation of the market value of the property from 1981 to 1991. As "actual use" was then made a criterion in the percentage assessment of real property, that market value multiplied by the applicable assessment level then enforced is equivalent to the assessed value of that property, which should be made the basis for the computation of back taxes for the years 1981 to 1991.
SECTION 7. Undeclared Buildings and Other Improvements shall be Exempted from Foregoing Rule - The directive of this section on the collection of back taxes on the basis of the schedule of market values in force during the period back taxes should be collected shall only be applied to lands, and not buildings and other structures as well as machinery. Buildings and other structures or machinery depreciate by the passage of time and that depreciation may be physical, functional and/or economic. Estimating depreciation for every period is an impossible task; depreciation does not operate uniformly and regularly on that class of property. The amount of depreciation accumulates from year to year and is depreciated or estimated only at the time of appraisal of the property. Due to the obvious difficulty in estimating the amount of depreciation, undeclared and unassessed buildings and other structures or machinery subject to back taxes shall be classified and valued according to the schedule of base unit construction cost in use or replacement/reproduction cost of machinery at the time of appraisal and shall be assessed like similar buildings and other structures or machinery in the locality to derive their taxable or assessed values, which shall be made the basis for the collection of back taxes not exceeding ten years.
SECTION 8. Back Taxes, when Subject to or not Subject to Penalties/Interest - If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of receipt of the assessment until such taxes are fully paid.
SECTION 9. Notification of New or Revised Assessments - When real property is assessed for the first time or when an existing assessment is increased or decreased, the provincial, city or municipal assessor shall, within thirty days, give written notice of such new or revised assessment to the person in whose name the property is declared. The notice may be delivered personally to such person or to the occupant in possession, if any, or by mail to the last known address of the person to be served, or thru the assistance of the punong barangay. (Sec. 223, id.)
a. Purpose of service of notice of assessment - Although the real property tax is levied against the real property, it is the owner who pays the tax. After that tax is fixed, he is entitled to hearing on the assessment of his property; notice and hearing constitute part of due process (not strictly judicial) in taxation. If he is not satisfied with the action of the assessor in the assessment of his property, he may, within sixty (60) days from the date of receipt by him of the written notice of the assessment of his property, appeal to the Board of Assessment Appeals of the province or city where the property is located. If he does not appeal within the said period, he will be deprived of his right to be heard in the Board.
b. To whom and where the notice shall be delivered - The written notice together with the owner's copy of the tax declaration shall be addressed to the person in whose name the property is declared. It may be delivered to him personally or to the occupant in possession of the property, or by mail to the last known address of the owner thru the assistance of the punong barangay.
If personally delivered to the owner or person in possession of the property, the person serving the notice shall secure the signature of the owner or occupant on the duplicate copy of the notice, with a notation of the date when notice was served and identification, whether the recipient is the owner or occupant of the property. If assistance of the barrio captain is secured, he should be requested to place his signature on the duplicate copy of the notice.
If the notice of assessment is coursed through the mail, the notice of assessment and owner's copy of the tax declaration shall be registered with return card.
For obvious reasons, the duplicate copies of the notice of assessments signed by owners or occupants of property and the return card shall be filed in the office of the provincial, city of municipal assessor. Those are important in ascertaining whether appeals filed by owners of real property are filed within the reglementary period of sixty days from the date of receipt of such notices.
The notice of assessment and owner's copy of the tax declaration shall be delivered or mailed to property owners within thirty days from entry of tax declarations covering assessments of property in the Record of Assessments.
c. Notices of assessment are exempt from postal charges -All real property assessment notices or owner's copies of tax declarations sent thru the mails by the assessor shall be exempt from the payment of postal charges or fees. (Sec. 282, id.)
Form of Notice of Assessment of Real Property, RPA Form No. 2, marked as Annex "H," shall be used; it may be mimeographed by assessors for their use.
SECTION 10. Actual use of real property as basis of assessment - Real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. (Sec. 217, id.)
A. Actual Use refers to the purpose for which the property is principally or predominantly utilized by the person in possession of the property. (Sec. 199(b), id.)
B. Assessment is the act or process of determining the value of the property, or proportion thereof, subject to tax, including the discovery, listing and appraisal of properties. (Sec. 199(f), id.)
Assessment is the determination of the value of the things subject to the tax and the amount of the tax paid by each individual. (Dollar Savings Bank vs. United States, 86 U.S. 337, cited in Martin's Revised Administrative Code, Vol. 2, p. 493)
SECTION 11. Rules for Assessment of Lands -
A. Lands actually and principally used for residential, agricultural, commercial, or industrial or mineral purposes shall be classified and valued according to the schedule of unit base market values and assessed at their corresponding levels of assessment, which shall be fixed through an ordinance by the Sanggunian concerned.
B. Land located in areas of mixed lands uses - In an area of mixed land uses, as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification, valuation and assessment thereof. If the predominant use is residential, all lands in that area shall be classified, valued and assessed as residential; if the predominant use is commercial or industrial, all lands in that area shall be classified, valued and assessed as such.
C. A lot or parcel of land classified and valued as commercial or industrial occupied by a building used both for residential and commercial or industrial purposes shall be assessed on the basis of the predominant use of the building or buildings. If the predominant use of the building is residential, the assessment level fixed thereon for residential land shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values; if industrial or commercial, the assessment level for industrial or commercial, shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values.
D. Vacant lands shall be classified, valued and assessed like similar lands in the locality.
E. Agricultural land convertible into urban subdivision such as residential, commercial or industrial shall be classified, valued and assessed as agricultural until such time that they shall have been converted and developed into such subdivisions. This rule shall also apply to lands already approved by proper authorities as subdivision but have not yet been actually developed for the purpose.
As soon as a portion of the subdivision is finally divided, converted and developed into residential lots, the same shall be valued and assessed like similar lots in the locality. Portions of the subdivision not yet developed and converted into residential, commercial or industrial lots shall be classified, valued and assessed as agricultural.
Roads or streets in urban subdivisions, unless already donated or turned over to the barrio (barangay), municipality or city, shall be listed in the name of the subdivision owner and shall be valued on the basis of the cost of cementing, asphalting or paving them with gravel and sand per square meter. The roads or streets shall be assessed at the rate not exceeding the assessment level applicable to lands located in the subdivisions.
SECTION 12. Special Properties (Lands) -
A. Lands actually, directly and exclusively used for cultural or scientific purposes, located in residential, commercial or industrial areas shall be classified and valued as residential, commercial of industrial in accordance with the schedule of base market values determined on the basis of that schedule.
B. Lands owned by local water districts and government-owned or controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power, located in residential, commercial or industrial areas shall, likewise, be classified and valued as residential, commercial or industrial in accordance with the schedule of base market values, and shall be assessed at ten percent (10%) of the market values.
C. If those special classes of lands are, however, located in areas of mixed land uses, such as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification and valuation of those special classes of land and shall be assessed at the corresponding levels of assessment.
SECTION 13. Land used for Religious, Charitable or Educational Purposes -
A. Lands actually, directly and exclusively used for religious, charitable or educational purposes located in residential, commercial or industrial areas shall be classified, valued and assessed as residential, commercial or industrial.
B. If those lands actually, directly and exclusively used for religious, charitable or educational purposes are, however, located in an area of mixed land uses, such as residential with commercial or industrial, the predominant use of lands in that area shall govern the classification, valuation and assessment of those lands used for religious, charitable or educational purposes.
SECTION 14. Lands Owned by the Republic of the Philippines or Any Political Subdivisions Shall be Classified, Valued and Assessed Like Similar Lands in the Locality.
SECTION 15. Rules for Assessment of Buildings and Other Improvements - A. Buildings used exclusively for residential purposes shall be classified and valued in accordance with the schedule of base unit construction cost, and shall be assessed by applying the corresponding assessment levels fixed by ordinances of the sangguniang panlalawigan, panlungsod or the sangguniang bayan of a municipality within the Metropolitan Manila Area, pursuant to Section 218 of the Code.
B. A building used both for residential and commercial or industrial purposes shall be classified and valued in accordance with the schedule of base unit construction cost and shall be assessed on the basis of the predominant use of the building.
C. Special properties (buildings and other improvements)
- Building and other improvements actually, directly and exclusively used for hospital, cultural or scientific purposes shall be classified and valued according to the schedule of base unit construction cost, and shall be assessed at 15% of their depreciated market values.
- Buildings owned by local water districts and government-owned or controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power shall, likewise be classified and valued in accordance with the schedule of base unit construction cost, and shall be assessed at 10% of their depreciated value.
E. Buildings and other improvements owned by the Republic of the Philippines or any of its political subdivisions shall be classified, valued and assessed like similar buildings and improvements in the locality. If the buildings and improvements are of a kind not covered by the schedule of base unit construction cost, they shall be valued at their fair market value at the time of appraisal and shall be assessed like similar buildings and improvements in the locality.
SECTION 16. Assessment Levels Defined. -
a. Assessment level is the percentage applied to the fair market value to determine the taxable or assessed value of the property. (Sec. 199(g), id.)
b. Assessment level distinguished from current or effective assessment level - When not qualified, assessment level refers to those prescribed in the Code, otherwise known as statutory or legal assessment levels and applied to fair market values of real property determined on the basis of the schedule of base market values or the schedule of base unit construction cost.
Current or effective assessment level, on the other hand, refers to the level of assessed values of real property actually sold as applied to their corresponding sales prices during a certain period. That level may be ascertained only by conducting an assessed sales ratio study. The study has a two-fold purpose: to ascertain whether the statutory levels are being achieved or approximated, and whether there is uniformity in the assessment of real property for taxation purposes in a province, city or municipality.
Assessment levels fixed by law are affected by the rise and fall of real property values in the market. If prices generally increase, the statutory levels would exceed the current or effective assessment level; if prices generally decrease, the statutory levels would fall below the current or effective assessment level.
c. Assessed or taxable value as basis of computation of tax - Market Value determined by assessors on the basis of the schedule of base market values or the schedule of base unit construction cost are not the ultimate basis for the computation of real property tax. The assessment level fixed in accordance with the Code has to be applied to the market values or real property to derive their taxable or assessed values.
SECTION 17. Assessment Levels - The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following:
a. On Lands:
b. On Buildings and Other Structures:CLASS Residential Agricultural Commercial Industrial Mineral Timberland
1. Residential
2. Agricultural
3. Commercial or Industrial
P300,000 P500,000 750,000 1,000,000 2,000,000
4. TimberlandP300,000 500,000 750,000 1,000,000 2,000,00
5,000,000 10,000,000
c. On MachineriesP300,000 500,000 750,000 1,000,000 2,000,00
d. Special Classes: Assessment level for all lands, buildings, machineries and other improvements:CLASS Agricultural Residential Commercial Industrial
Government-owned or controlled corporation engaged in the supply and distribution of water and/or generation and transmission of electric powerACTUAL USE Cultural Scientific Hospital Local Water District
e. Assessment levels above shall be applied initially during the first general revision of real property assessments to be undertaken pursuant to Section 219 of the Code. Thus, the assessment levels applied in the 1981-84 general revision of real property assessments that took effect on July 1987, shall be maintained until after the first general revision of real property assessments under the provision of said Section 219 of the Code, which local assessors are mandated to conduct, shall have taken effect.
f. Increase/decrease of assessment levels - The assessment levels for the different classes of real property may be increased or decreased at rates to be fixed by ordinance of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan of a municipality within the Metropolitan Manila Area, provided, however, that in no case shall such increase or decrease of the assessment levels shall be made effective in between general revision of assessment periods.
SECTION 18. Preparation of Schedule of Market Values - Before any general revision of real property assessment is made, there shall be prepared for each municipality or city, a schedule of market values for different classes or real property therein situated in such form and detail as shall be prescribed herein.
Said schedule, together with the abstract of the data on which it is based, shall be submitted to the sanggunian concerned for enactment by ordinance not later than the thirty-first of October immediately preceding the period the general revision of assessments shall be undertaken and prescribed in the assessment calendar herein. The sanggunian concerned shall have ninety (90) days from the date of receipt within which to review said schedule to determine whether it conforms with the regulations set forth herein.
SECTION 19. Duty of the Provincial/City/Municipal Assessor - It is the duty of all provincial and city assessors, and municipal assessors of the municipalities within the Metropolitan Manila Area to prepare or cause to be prepared a schedule of market values as the basis for the appraisal and assessment of lands, buildings and other improvements situated in their respective jurisdiction within one (1) year after the effectivity of the Code and every three (3) years thereafter.
Market values for real property situated within the province shall be prepared by the provincial assessors who shall be assisted by the municipal assessors of municipalities within his jurisdiction.
SECTION 20. Scheduled Reflective of Fair Market Value - The schedule of market values of real property shall reflect the fair market values of real properties in the locality, irrespective of the manner in which they are actually used.
SECTION 21. Approaches Used to Estimate Values - As discussed in Section 34 hereof, to estimate value, three approaches may be used in the construction of the schedule of fair market values. Sales Analysis Approach (also called Market Date Approach), the Income Capitalization Approach, and the Replacement or Reproduction Cost Approach.
A. Under the Sales Analysis Approach, the price paid in actual market transactions are considered. It requires the accumulation of valid sales data. Such data can be secured from the Office of the Registrar of Deeds and notaries public, who are required under Section 278 of the Code to furnish the provincial, city or municipal assessors with copies of all contracts, conveying, leasing, or mortgaging of real property, received or acknowledged before them. Other evidences of market values to augment sales data re: bids, offers to sell, opinions of informed real estate appraisers, brokers, salesmen, dealers or bank officials. Values declared by property owners or administrators embodied in sworn statements filled pursuant to Section 202 of the Code fully evaluated, may also be considered as additional source of information of Market Data Analysis.
In the absence of unavailability of valid sales data, price indices of real property situated in the different provinces, cities and municipalities, compiled in the National Statistics Office and the Economic Research Division of the Central Bank of the Philippines, may be used as primary basis in computing the fair market value that will be incorporated in the schedule of market values.
1. Analysis of Sales Transactions - The elements that enter into sales transactions should be analyzed thoroughly, to determine the relationship between the amount of consideration contained therein and the current value of subject property. Only sales transactions which meet more or less the following criteria shall be considered for the sale analysis:
- The date of the transaction must be reasonably near the general assessment date. Sales transactions for the current year or preceding year, if adequate, would also serve as a good basis for studies on trends of market values.
If the data derived therefrom are inadequate, studies may extend to preceding year, but in no case shall it be for more than three (3) years from the general re-assessment date.
- Type of conveyance representing a normal transaction is one which envisions willing, able and well well-informed, buyers and sellers. Quitclaims, transfers between relatives, inter-related corporations and the like, should not be considered.
- The amount of consideration reflects a strong presumption of the fair market value of the property involved.
B. Income Capitalization Approach. - Is a direct approach to estimate the value of property. It is based on the theory that the value of an income producing property is no more than the return derived from it. It requires an analysis of the income produced by a property in order to estimate the sum which might be invested in the purchase of the property. A detailed financial study must be made of the property. Gross annual income is either determined from actual figures or is estimated. Annual expense figures are obtained from the owner. The income, operating expenses and fixed charges of the subject property are analyzed and the expenses derived thereof are the subtracted from the gross income. The resultant net income capitalized at a rate which the investor of the property can expect as reasonable return or interest prevailing in the locality. The capitalized value of the income represents the present value of the property.
Income method may be utilized to check results derived from sales analysis approach in the case of rental or income producing property.
C. Reproduction Cost (New) Approach - This is a factual approach used exclusively in appraising man-made improvements such as buildings and other structures. This method depends on guides and standards, based on such data as materials and labor costs.
The "reproduction or replacement cost approach" makes use of a value estimate of reproducing a new replica property within the same or closely similar materials on the basis of current construction materials and labor costs. Unit base construction cost is developed on a per square meter or per cubic meter basis for typical buildings or structures. The unit cost is multiplied by the ground area or volume, as the case may be, of the subject structure to derive its total reproduction or replacement cost, allowance for depreciation is deducted to arrive at the depreciated cost of subject property.
1. Quantitative Analysis Method - The schedule of unit base construction cost for buildings shall be established by the quantitative analysis method of the reproductions cost (new) approach. A base unit cost for each type and sub-typed of typical buildings in the province or city or municipality shall be established.
By this method, a detailed inventor of all materials and labor that went into the finished buildings is made.
The first step in this method is collection or preparation of plans and specifications for adopted typical (sample) buildings, representing each type. Data on cost of construction materials prevailing in the city or province or municipality shall then be gathered and listed. Labor cost and others that contribute to the construction cost may be estimated by proper consultation with building contractors, engineers, architects and labor agencies.
From the plans and specifications, materials and labor quantities are then computed for all parts of the structures. The materials cost shall be determined by applying the price for building materials computed from the material quantities that went with finished buildings. The amount added to the estimated labor cost and miscellaneous expenses, results in the total cost miscellaneous expenses, results in the total cost of the subject building. The base unit cost shall be then determined by dividing this total cost by the average area in the square meters of the subject structure.
SECTION 22. Coverage of the Schedule of Market Values for Urban Lands - As much as possible, the schedule of market values for urban lands which comprises principally residential, commercial and industrial lands, shall cover the full extent of areas in the city of municipality.
The said schedule shall be in the form as shown in Annex "A"* attached herein.
SECTION 23. Sub-Classification of Residential, Commercial and Industrial Lands - Generally, market values of urban lands are enhanced by their proximity to commercial and government center, educational and religious institutions, highways and availability of water, electricity, telephone system and transportation facilities, as well as accessibility to good roads and avenues.
Residential lands are valuable if they are accessible to employment opportunities and shopping, recreational, educational and cultural centers, Value of commercial lands depend upon their access to suitable markets, while industrial lands are valuable if accessible to source of raw materials, roads, ports, electric power and labor.
On the basis of these influences on value, residential, commercial, and industrial lands located within the contiguous urban areas of the city or municipality, may then be sub-classified into first, second, third or more classes, and schedule of base unit market value per square meter shall be determined and fixed for each sub-class. The sub-classification may be, as much as possible, guided with the criteria herein attached marked as Annex "E". The number of sub-classes for each class of the urban lands shall be left to the discretion of the provincial and city assessor, and the municipal assessors of the municipalities within the Metropolitan Manila Area depending upon the existing variations of value factors in such land. The criteria established herein, may vary or be modified to suit the actual physical developments and conditions obtaining in a city or municipality.
However, lots located in the populous centers of barangays separate from the contiguous urban areas defined hereof may not be sub-classified in accordance with the criteria herein referred to. A schedule of barangay street unit land value shall be established independently on the basis of the sales value as well as opinions on declared values of representative lots therein.
For this purpose, separate urban unit value map shall be prepared for every barangay concerned. This will form an integral part of the schedule of market values.
SECTION 24. Highly or Fully Developed Residential Subdivisions - In cases of highly or fully developed residential subdivisions, a schedule of base unit market values may be established independently on the basis of the exclusive sales analysis on the lots of such subdivisions. The lots of these subdivisions may not be sub-classified in accordance with the criteria established. In this case, a schedule of base land values shall be established depending on the influence of physical development and facilities particularly those highly or fully developed residential subdivisions.
SECTION 25. Modifications for Variations (Urban Lands) - Theoretically, in establishing unit base values, we eliminate such value factors as size, shape, location with respect to public ways, and topography because they are generally the points of variation that every parcel of land nearly has, in relations to a standard parcel and with one another. This is especially true with respect to developed urban areas, and it is necessary to make specific adjustments in the valuation of individual parcels for the eliminated factors. Specifically, modifications may be for the depth, corner, alley, irregular shape, and topography. It is noteworthy to consider, that the importance of these modifications depend upon the degree to which they are reflected on the local real estate market. It is safe to assume, nevertheless, that depth is one of the many factors that is commonly reflected in the market and must be considered unsparingly.
SECTION 26. Depth Influence and Standard Lot Depth - It is a recognized fact that the urban lot value tapers from street frontage to the rear. The nearest portion or strip to the street has the highest value and the value of each successive parallel strip across a given lot decreases as distance to street increases. This brings about the necessity of adopting a standard depth for each residential or commercial land. Considering that individual lots used for industrial purposes are generally large in area, standards depth for industrial lands may not be considered.
The standard depth may be established after careful study of various depths in the locality. If, for instance the dominant or prevailing lot depth among the residential lots in the city or municipality is 20 meters, this depth maybe fixed as a standard depth for residential lands within the locality. Standard depth for commercial lands shall be established in similar manner.
SECTION 27. Unit Value Construction - Lot values taken from sales transactions shall be translated into value per square meter attributed to the frontage strip within the standard depth. For a lot conforming to the established standard depth and space (rectangular), estimating value per square meter would be an easy process. This is done by merely dividing the total purchase price by its area. However, the same becomes complicated if a lot is not rectangular in shape whose depth exceeds the standard.
For instance, a residential lots of 20 by 75 meters or 1500 square meters in area, is sold at P100.00 per square meter or P150,000.00. Suppose further that the standard depth established for residential lands in the locality is 20 meters and the percentage values are 100% for the first strip; 80% for the second strip; 60% for the third strip; 40% for the fourth strip and 20% for the remaining strip or strips. The value per square meter of the area within each strip may be computed as follows:
The value per square meter of the first strip is equivalent to P150,000 divided by 1,080 sq.m. (Effective area) or P138.89. The unit value for the second, third and fourth strips are P111.11 (80% of 138.89); P83.33 (60% of 138.89); and P55.66 (40% of 138.89); respectively.
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The unit sales values which corresponds to the first strip of the lots involved in the sale analysis are the values to be entered in column 8 of DF-RPA (SMV) Form No. 1 attached herewith, marked as Annex "B * .
SECTION 28. Use of Working Map - Preparatory to the final computation of the schedule of unit base market values for urban lands, the assessor should be prepare an outline map on which to record information of the determined unit land values. A map must be drawn to scale, to cover the full extent of the continuous urban areas in the city or municipality and show all road system, waterways, railroad lines, including all principal landmarks within the area. Such map is of a great importance in determining comparative land values.
SECTION 29. Establishing Unit Base Market Value for Each Sub-Class of Residential, Commercial and Industrial Lands - A unit base market value for each sub-class of residential, commercial and industrial lands shall be established and reflected in the schedule of market values.
SECTION 30. Grouping Unit Sales Values by Class - Preparatory to the computation of the final base unit values, each sub-class (say first class residential) shall be segregated from the record of sales entered in DF-RPA (SMV) Form No. 1 and subsequently entered exclusively in the prescribed form known as DF-RPA (SMV) Form No. 1-A, marked as Annex "C"* . Only sales values involving non-corner lots located along streets or roads, with more or less common elevation, shall be included in cases of sales analysis to establish unit market values for urban lands. In view of the influence on values peculiar to them, corner and interior lots shall be excluded in the sales analysis. Sales documents used as basis in the established of values shall be separately filed and kept for future reference.
SECTION 31. Computation for the Unit Base Market Values - The unit base market values of a subject sub-class of land is determined by dividing the sum of the Average and Median of the unit sales involved, by two, as illustrated in Annex "D"* .
The average is determined by dividing the sum of the sales values involved by the total number of sales values.
The Median is the middlemost sales value among the unit sales values involved, arranged in numerical order.
SECTION 32. Computation for the Unit Base Market Values by Income Capitalization Approach - The unit base market value of a subject sub-class of land is determined by dividing the net income attributable to the land, which is the difference of the gross land income and the corresponding operating expenses by the appropriate capitalization rate.
For instance, a 400 square meter commercial lot is rented at P1,000.00 a month. Determine its estimated value. The interest rate prevailing in the area is 20% (Bank Rate).
SECTION 33. Corner Influence - The location of a lot on a street intersection enhances its value. The value of corner lots exceed the value assigned to lots along streets sides because of added frontage provided for by the side street. The simplest method of appreciating corner influence is to assign a percentage value to corner lots, on the basis of the value of one-street frontage lots.Solutions: 1. Gross Income - 2. Less: Expenses 3. Net Income 4. Divided by Capitalization Rate 5. Lot Value 6. Divided by Lot Area 7. Lot Value per square meter
The percentage of corner influence may be determined in the following manner:
The average of the corner influence of at least two (2) sub-classes of residential land (say 1st and 2nd Classes) will be adopted as corner influence on lands classified as residential in the Schedule of Values.a. Average price per square meter of corner first class residential lots . b. Average price per square meter of lots along street sides for first class residential .. c. Difference . d. Corner Influence for First Class Residential lots 30/100 = 30%
The percentage of corner influence for commercial lands shall be determined in similar manner. Corner influence however, shall not be considered on industrial lands.
SECTION 34. Setting up the Unit Value Map - Together with the selection of unit measure and standard depth as preliminary steps to unit value establishment, is the preparation of unit land value map upon which information and conclusions of value may be recorded graphically. This map is very essential in making comparisons of value. The first step in setting up unit land value map is to construct a block outline map. The tax map drawn to a much smaller scale showing a large area of all the tax-mapped district is preferable. Such map should only indicate street lines and other principal landmarks such as rivers, railroad lines and the like, as well as government buildings, known private buildings, parks, etc. The main purpose is to have as much white space as possible on which to record information of value and established unit base market values. It is often necessary to exaggerate the street width at the expense of the block areas and to indicate the street names and other identifying information outside the street areas.
SECTION 35. Coverage of the Schedule of Market Value for Agricultural Lands. - The schedule of market value for agricultural lands shall cover all agricultural lands predominantly rural in nature that are beyond potential urban limits and generally at a great distance from the poblacion of the city or municipality.
The schedule shall be in a form as shown in Annex "F"* attached herein.
SECTION 36. Classification of Agricultural Lands - The principal crop used shall be the basis of classification of agricultural lands such as rice land, corn land, coconut land and other crop land, that is predominantly developed in the locality. Each class shall further be sub-classified into the first, second, third or more classes on the basis of their productivity.
The productivity classification of several crop lands shall be prepared based on information which may be obtained from the Department of Agriculture.
The productivity classification of crop lands shall be determined by the assessor on the basis of the annual yield per hectare. Each crop land should use the applicable unit of measure, such as, cavans of palay, picul for sugar, kilos for fishponds, etc. For fruit bearing trees, the number of fruits shall be the basis of measure.
In setting up the ranges of annual yield in each class, the Assessor should see to it that the ranges are reasonable.
SECTION 37. Establishing the Schedule of Unit Base Market Values for Agricultural Lands - The schedule of unit base market value for the different classes of agriculture lands shall, as much as possible, be established by the sales analysis approach. However, for lack of market data, the income capitalization approach may be resorted to.
In sales analysis method, unit sale values involving one class of crop shall be entered separately in a prescribed form known as DF-RPA (SMV) Form No. 2-A attached herewith marked as Annex "G"* and consequently adjusted with location factor as illustrated in Annex "H,"* also attached herewith.
The following guides are suggested for location adjustment on values for agricultural lands:
Type of Roads:
(a) Provincial or National Highways - No deductions from basic value 100%
(b) For other all-weather roads - 3% deduction from basic value 100%
(c) Dirt Roads - 6% deduction from basic value 100%
(d) For no road outlet - 9% deduction from basic value 100%
Distance of property from all-weather road, railroad stations, landing places along sea coast and from traded center (poblacion), shall be measured from corner of the lot or parcel nearest to such road or center.(a) All weather Road (b) Local trading Center (Poblacion)
- 0 - 5% - 2% - 0% - 4% - 2% - 6% - 4% - 8% - 6%
All-weather roads include municipal, provincial, national and all other public roads traversable by trucks, cars, and other forms of motor vehicles under any kind of weather.
In the Income Capitalization Approach, several processes are possible, namely (a) gross production minus production expenses per hectare (b) rental income per hectare (c) income per hectare on sharing basis. However, income should be the basis of capitalization value. Capitalized value which will be considered the market value of the land, must be equal to the net income per hectare divided by the rate of capitalization.
Accordingly, this approach or estimating value, requires information on crop production in the area and the generally expected rate of interest on money invested for the preceding years. Crop production and average cost production may be obtained from the Bureau of Agriculture Extensions and the Bureau of Plant Industry, thru their respective offices, while prices of crops can be obtained from the National Food Authority and the Department of Industry and Trade; and the rate of Interest from the Philippine National Bank, Development Bank of the Philippines of Rural Banks.
For illustrations purposes, a sample computation for the schedule of unit base market value for rice land through the sales analysis approach is enclosed in Annex "I".
SECTION 38. Classification of Buildings - Buildings shall generally be classified in accordance with the structural designs for which they are intended regardless of their actual use, such as residential, commercial, industrial, or farm house. The classification system should embrace only such structures as are commonly found in the city or province.
Under the use design classification, buildings may be grouped into the following:
A. RESIDENTIAL BUILDINGS
(a) One-family DwellingB. COMMERCIAL BUILDINGS
(b) Two-family Dwelling
(c) Multi-family Dwelling
C. INDUSTRIAL BUILDINGS(a) Store
(b) Office
(c) Bank
(d) Theater(e) Hotel
(f) Motel
(g) Service Station
(h) Public Garage, etc.
(a) FactoryD. FARM HOUSES
(b) Sawmill
(c) Warehouses, etc.
(a) BarnFor purposes of establishing schedule of base unit construction cost, each type of building (say one-family dwelling) shall further be grouped in accordance with the kind and quality of material used on the constructions, such as Type I-A to B; Type II-A to D, Type III-A to D and Type IV. Standard base specifications shall then be prepared, defining and describing each types of building as shown in the sample hereunder:
(b) Poultry
(c) Stable
(d) Hog House
(e) Green Houses, etc.
| I. | Reinforced concrete: |
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a) |
Structural Steel reinforced concrete columns, beams, the rest same as I-B. |
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b) |
Columns, beams, walls, floors and roofs all reinforced concrete. |
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c) |
Same as "B" but walls are hollow blocks reinforced concrete or tile roofing. |
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| II. | Mixed Concrete: |
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a) |
Concrete columns, beams and walls - but wooden floor joists, flooring and roof framing and G.I. roofing; even if walls are in CHB kitchen and T & B are in reinforced concrete slabs. |
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b) |
Concrete columns and beams - but hollow blocks walls and G.I. roofings. |
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c) |
Concrete columns and wooden beams, hollow block walls, wooden floor joists, floor and roof framing; and G.I. roofing and second floor wooden walls. |
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| III. | Strong Materials: |
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a) |
First group wooden structural framings, floorings, hollow block walls and G.I. roofing. |
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b) |
First group wooden structural framings, floorings and hollow block walls on the first floor and tanguile walls on the second floor and G.I. roofing. |
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c) |
First group wooden posts, girders, girts, window sills and heads, apitong floor joists and roof framing, tanguile floor and sidings and G.I. roofing. |
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d) |
Third group wooden structural framings, floorings and sidings, and G.I. roofing. |
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e) |
Same as "d" but structural members are substandard. |
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| IV. | The temporary makeshift structure - this is the barong-barong type |
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The schedule for building shall be in the prescribed form as shown in Annex "J"* attached herein.
SECTION 39. Addition and Deduction Factors - Structures falling under one classification are not all exact replica of each other, or of the standard adopted in the preparation of the schedule of values. It follows therefore that their values are not exactly equal, even if their area and classification may be the same.
To compensate for this difference in the value, a set of adjustment factors must be prepared, to go with the schedule. It should only treat items that are commonly found deviating from the standard and may be expressed as percentage of the base unit construction cost listed in the schedule. Addition and deduction factors may be prepared by the quantitative analysis method. Samples of the Addition and Deduction Factors of the schedule of base unit cost are shown below.
SECTION 40. Depreciation - Buildings depreciate in value due to wear and tear, and other factors brought about by the passage of time. Hence, it is necessary that a schedule of base unit cost for buildings with a depreciation table for the same be prepared by the assessor. The table may be established through the combined observed depreciation and effective age method.1. Carport ..... 30% of Base Unit Value 2. Mezzanine ... 60% of Base Unit Value 3. Porch ....... 40% of Base Unit Value 4. Balcony 45% of Base Unit Value 5. Garage . 45% of Base Unit Value 6. Terrace: Covered . 35%-40% of Base Unit Value Open ......... 20% of Base Unit Value 7. Deck Roof: Covered . 35-40% of Base Unit Value Open ......... 20% of Base Unit Value 8. Basement: Residential 70% of Base Unit Value High rise Building .. 20% of Base Unit Value 9. Pavements: Tennis Court . P50-60.00 per sq. m. Concrete: 10 cm. thick . P60.00 per sq. m. 15 cm. thick . P65.00 per sq. m. 20 cm. thick . P100.00 per sq. m. Asphalt: 1 Course .. P40.00 per sq. m. 2 Course .. P65.00 per sq. m. 3 Course ... P90.00 per sq. m. 10. Floor Finishes: a) Marble Slabs .. P220-320 per sq. m. b) Marble Tiles P130-150 per sq. m. c) Crazy Cut Marbles P100.00 per sq. m. d) Granolithic .. P60.00 per sq. m. e) Narra P60-80 per sq. m. f) Yakal ... P60.00 per sq. m. g) Narra/Fancy Wood Tiles ... P60-80 per sq. m. h) Ordinary Wood Tiles P40.00 per sq. m. i) Vinyl Tiles .. P30.00 per sq. m. j) Washout Pebbles P30.00 per sq. m. k) Unglazed Tiles P40.00 per sq. m. 11. Wallings: a) Use the same rate for floor finishing in a, b, c, and i, as indicated above b) Double Walling (Ordinary Plywood P30.00 per sq. m. c) Double walling (Narra Panelling) P45.00 per sq. m. d) Glazed White Tiles P50.00 per sq. m. e) Glazed Colored Tiles . P60.00 per sq. m. f) Fancy Tiles . P80.00 per sq. m. g) Synthetic Rubble P40.00 per sq. m. h) Bricks P50.00 per sq. m. 12. Special Panels: a) Glass with Wooden Frames P200.00 per sq. m. b) Glass with Aluminum Frames . P300.00 per sq. m. (For tinted Glass, Add) P50.00 per sq. m. 13. Ceiling: (Below Concrete Floor) a) Ordinary Plywood P30.00 per sq. m. b) Luminous Ceiling . P150.00 per sq. m. c) Acoustic P140.00 per sq. m. d) Special Finish ... P150.00 per sq. m. 14. Fence: a) Wood .. P30-40 per sq. m b) CHB: 10 cm. thick .. P50-60 per sq. m. 15 cm. thick . .P75-85 per sq. m. 20 cm. thick .. P100.00 per sq. m. c) Reinforced Concrete P150-160 per sq. m. d) Steel Grille P200-220 per sq. m. e) Interlink Wire .P15.00 per sq. m. 15. Excess Heights: a) Residential and Commercial ...Add 20% of Base Value every meter in excess of three (3) meters. b) Bodega and Factory Add 15% of Base Value for every meters in excess of 4.50 meters. 16. Extra T & B - Ordinary Finish... P7,000/unit 17. Foundation .. P100 x total floor area less floor area of 1st and 2nd piles driven. 18. Piles . P200.00 per linear meter of pile driven. 19. Painting If the building is not painted, deduct ten (10%) percent of the basic rate. 20. Second Hand Materials . If the building has used Second-Hand materials, deduct five to ten (5-10%) percent.
SECTION 41. Format of the Schedule of Base Unit Cost for Buildings - The schedule of base unit cost for buildings shall be prepared in such form and manner as illustrated in Annex "J"* .
SECTION 42. Forms to be Used and Manner of Submittal of Schedule of Market Values - The schedule of market values for all classes of real property situated in one city or municipality shall be prepared in accordance with the format.
The original and duplicate copies of such schedule prepared in book form (preferably cloth bound) shall be submitted to the Sanggunian concerned for review together with all essential materials and consecutively arranged in the following manners.
1. Letter of Transmittal
2. Schedule of Values for Residential, Commercial and Industrial lands (See Annex "A")
3. Unit Land Value Map (Residential, Commercial and Industrial Lands)
- One for each "poblacion" or trading center of municipality in case of province.
- One for each district or barangay in case of city
5. Tabulation of Sales Values for each class of Residential, Commercial and Industrial Lands taken from DF-RPA Form No. 1 (see DF-RPA (SMV) Form No. 1-A, marked as Annex "C")
6. Computation for the Unit Base Market Value. (See illustration example marked as Annex "D")
7. Criteria for Sub-classification of Urban Lands situated in Residential, Commercial and Industrial Areas. (See Annex "E")
8. Schedule of Values for Agricultural Lands. (See Annex "F")
9. Statement of Sales Values of Agricultural Lands (See Annex "G")
10. Tabulation of Unit Sales for Each Class of Agricultural Land taken from DF-RPA (SMV) Form No. 2. (See Annex "H")
11. Computation of Unit Base Market Values on Agricultural Lands. (See Annex "I")
12. Classification of Buildings and other Improvements.
13. Schedule of Values and other Classes of Lands such as Timber and Forest Lands, mineral, Pasture Lands, Memorial Parks or Cemetery, etc.
14. Schedule of Buildings Base Unit Cost. (See Annex "J")
15. Depreciation Table on Buildings and other structures.
16. Other information relevant to the establishment of Unit Base Value for lands, buildings, and other improvements.
SECTION 43. Repealing Clause - All rules and regulations inconsistent with the provisions of these Assessment Regulations are hereby modified accordingly.
Adopted: 6 Oct. 1992
(SGD.) RAMON R. DEL ROSARIO, JR.
Secretary
Secretary
* Text available upon request at the Office of the National Administrative Register (ONAR), U.P. Law Center, Diliman, Quezon City.