What are the benefits of the reform?
- Single valuation base: Eliminates wide disparities and therefore achieve consistency in real property valuation. The predictability of valuation will have a positive impact for planners.
- Uniform standards: Lead to the harmonization of the real property valuation among the different government agencies. Improve the integrity of real property appraisal in accordance with the generally accepted valuation standards. Ensure transparency is available at all levels of appraisal and valuation. It will give national and local government, businesses, financial institutions, lenders, and investors greater confidence in valuation reports.
- Comprehensive database: Greater transparency in land transactions translates to confidence in the real estate market. Ready access to a database facilitates property-related policies as it improves decision-making (Sanggunian) and planning by policymakers.
- Increased revenues: The adoption of true market-based values for taxation purposes will increase government revenues without adopting new tax measures. It will lead to an increase in the revenue generating capacity of real property through the RPT, NG Real Property Transfer Taxes*, and other related taxes. The increase in RPT collection could improve the RPT to GDP ratio from 0.36 percent to 0.43 percent. Likewise, its share to local income will grow to 23 percent.
- Improve local autonomy: Enhanced LGU financial self-sufficiency to achieve genuine and meaningful local autonomy as guaranteed by the Constitution and the LGC.
- Higher investor confidence: The adoption of globally benchmarked valuation standards and higher degree of professionalism in real property valuation will inspire greater confidence from investors.
- Guaranteed benefit of education sector: Strengthening the collection of RPT could ensure higher special education fund (SEF) collections and will result in more funds to be available for public education. Currently, there is an average of Php760 allotted per public school student from the SEF and the VRA is expected to increase this by Php280 per student.
- Reduced government costs: Reduce unnecessary expenses due to conflicting appraisals which lead to court litigations, project delays, and cost overruns. The SMVs used as the authoritative benchmark for other valuation purposes by all national government units (NGUs) will also minimize cost.