Real property valuation reform ushers speedy infra developments

Date Posted : December 25, 2019

Real property valuation reform ushers speedy infra developments

Date Posted : December 25, 2019

The Duterte administration’s ambitious infrastructure plan is now in full swing but has occasionally been hampered by discrepancies in property assessments due to the government’s outdated valuations used for right-of-way compensation.

Conflicting assessments have resulted in delays in the implementation of a few projects under the government’s P8 trillion “Build, Build, Build” program, comprised of tens of thousands of logistics and connectivity upgrades geared at improving the country’s ageing and inadequate infrastructure, particularly in areas outside of Metro Manila.

Over the last three years, only 60 percent of Revenue District Offices (RDOs) under the Bureau of Internal Revenue (BIR) have actually updated their zonal values, while only 37 percent of LGUs have updated schedules of market values (SMVs).

Apart from outdated valuation, the complexity of the present regime is further complicated by various agencies doing or requiring property valuation using their own system and methodology.

The current real property valuation system is rife for reforms because its multiple and overlapping property valuations complicate assessment and taxation. These discrepancies have hampered the government’s ability for speedy and efficient construction of infrastructure projects.

Recently, the House of Representatives approved on third and final reading a bill under the Comprehensive Tax Reform Program (CTRP) that once passed into law, will institute reforms in real property valuation and assessment in the country.

Also known as CTRP’s Package 3, the bill includes vital reforms needed to promote a just, equitable, and efficient real property valuation system as well as broadens the tax base used for property and property-related taxes of the national and local governments.

If approved, Package 3 will establish a single real property valuation system for the country—a comprehensive and up-to-date database of all real property transactions and prices of materials for buildings, machinery, and other structures.

The database will also be accessible to all local government units (LGUs), national government agencies, and the private sector.

For these reasons, updating the SMVs and conducting the general revision of property assessments are necessary components for effective and efficient real property tax administration in any LGU to arrive at a fair and equitable real property tax (RPT).

Package 3 aims to address the systemic problems of the outdated valuations used for governmental purposes.

Joshua Gripo, a real estate practitioner, has thrown his support behind Package 3 because the proposed electronic database will hasten the process of real property acquisition.

“Hindi na siya very subjective kung ano lang yung gusto niyang presyo o anuman ang say ng community, but mayroon na tayong objective na price. May standard na tayo kung magkano ba talaga ang price ng lupa,” Gripo said.

Likewise, Jeffrey Ng, Chairman of the Subdivision and Housing Developers Association (SHDA) is optimistic that Package 3 will soon pass in Congress and resolve the numerous and conflicting valuations that property developers regularly encounter.

“We are in support of a unitary, single, transparent property valuation system, which would make the cost of doing business in the Philippines lower. We are asking government especially Congress to approve as soon as possible the property valuation bill so that it becomes a law,” Ng said.

According to Ng, CTRP’s Package 3 will help investors especially housing and subdivision developers in delivering more houses to Filipinos and address the estimated 6.5 million housing backlog in the country.

Jessie Doctolero, a provincial assessor, said that “Package 3 will ensure transparency in all real property transactions, thereby protecting the interests of the public. It will also develop confidence in the work of appraisers and assessors,”.

Land lawyer Erwin Tiamson, stated that “I believe that the reform will promote transparency in real property transactions and develop investor confidence in the valuation system.”

“It will also help reduce expropriation procedures which arise from conflicts in determining the appropriate price offer due to multiple and conflicting valuations used by appraisers and government,” Tiamson added.

Lastly, Dr. Arturo Corpuz, an environmental planner, noted that “a single benchmark valuation will mean better predictability in investment and therefore reduce risks in business.”

This article was published in Manila Bulletin on December 25, 2019.


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Date Posted December 25, 2019

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