Republic of the Philippines

DEPARTMENT OF FINANCE
Manila

LOCAL FINANCE CIRCULAR NO. 3-92

September 11. 1992

SUBJECT Guidelines for Equitable Land Valuation for Socialized Housing pursuant to
Sec. 13 of RA 7279. entitled "An Act to Provide for a Comprehensive and
Continuing Urban Development and Housing Program. Establish the
Mechanism for its Implementation and for Other Purposes." otherwise known
as the Urban Development and Housing Act of 1992.

TO All Regional Directors of the Bureau of Local Government Finance and

Bureau of Internal Revenue of the Department of Finance; Provincial. City
and Municipal Treasurers and Assessors; and Others Concerned.

Section 13 of Republic Act No. 7279, (b) Schedule of Market Values - is an

otherwise known as the Urban Development approved schedule of unit base
and Housing Act of 1992. provides as market values for different classes of
follows: real property used by the provincial.
city or municipal assessors as basis
"Section 13. Valuation of Lands for for the appraisal and assessment of
Socialized Housing. - Equitable land real properties in their respective
valuation guidelines for socialized housing assessment territorial jurisdictions
shall be set by the Department of Finance on for real property taxation purposes.
the basis of the market value reflected in the
zonal valuation, or in its absence, on the (c) Zonal Valuation - is an approved
latest real property tax declaration. zonal schedule of fair market values
on real property used by the Bureau
For sites already occupied by qualified of Internal Revenue as basis for the
Program beneficiaries, the Department of computation of internal revenue
Finance shall factor into the valuation the taxes.
blighted status of the land as certified by the
local government unit or the National (d) Real Property Tax Declaration - is a
Housing Authority." property record, which is a traditional
assessment document maintained
For the proper implementation of the by the provincial, city or municipal
foregoing provisions of the law, the following assessors, showing, among others.
guidelines are hereby prescribed for the the market and assessed values of
information and guidance of all concerned. the property as the basis for the
Section 1. Scope. - This Circular shall collection of real property tax.
govern the valuation of land, urban areas (e) Socialized Housing - refers to
and/or urbanizable areas and the grant of housing programs and projects
incentives to the National Housing Authority covering houses and lots or
pursuant to the provisions of the Urban homelots only undertaken by the
Development and Housing Act of 1992. government or the private sector for
the underprivileged and homeless
Section 2. Definition of Terms. - For citizens which shall include sites and
purposes of this Circular, the following
services development, long-term
definition of terms are hereby adapted: financing, liberalized terms on
(a) Fair Market Value - is the highest interest payments, and such other
price estimated in terms of money benefits In accordance with the
that a purchaser, with full knowledge provisions of said Act.
of all the uses to which the property (f) Urban Areas - refer to all cities
could be adapted or utilized, would
regardless of their population density
buy the said property if exposed for and to municipalities with a
sale in the open market.
 population density of at least five (b) For land(s) to be used as site for
hundred (500) persons per square socialized housing located within the
kilometer. territorial jurisdiction of two or more cities
and/or municipalities, the valuation of the
(g) Urbanized Areas - refer to sites and portion of land located within each
lands which, considering present territorial jurisdiction of the local
characteristics and prevailing government unit must be first made in
conditions, display marked and great accordance with Section 4(a) hereof.
potential of becoming urban areas Then, the total valuation arrived and/or
within a period of five (5) years. determined for each portion of land
Section 3. Land Valuation - (a) For land located within its respective local
be utilized for socialized housing, the government unit Is considered the fair
valuation of such land shall be based on market value of the land.
the prevailing zonal values of real Upon request of the Local
properties scribed for Internal Revenue Government Unit or the National Housing
taxation or on the market value to be Authority or the National Home Mortgage
determined by the assessor concerned Finance Corporation, the provincial and
for real property taxation. city assessors, or municipal assessors of
Metro Manila, shall submit a report on
1. As a general rule, the zonal
how the land valuation was determined or
values shown in the approved zonal
arrived at to the requesting agency within
valuation of real properties for the area
thirty (30) days from receipt of the
or locality applicable to the
request.
corresponding period shall be used as
the basis for computing the fair market Under Section 19 of said Act. National
value of the subject land. Housing Authority is exempted from the
2. Where in the approved zonal payment of real property tax. quoted
valuation of real properties covering a hereunder:
city or municipality, no zonal value has
"Sec. 19. Incentives for the National
been prescribed for the particular land,
Housing Authority - The National Housing
the zonal value prescribed for similar
Authority, being the primary government
lands located in the adjacent area or
agency in charge of providing for the
barangay within the city or municipality
underprivileged and homeless, shall be
shall be used in arriving at the fair
exempted from the payment of all fees
market value of such land.
and charges of any kind, whether local or
3. In the absence of zonal valuation national, such as income and realty taxes.
in a city or municipality, the market value All documents or contracts executed by
shown in the latest tax declaration on file and in favor of the National Housing
in the Office of the Provincial, City or Authority shall also be exempt from the
Municipality Assessor concerned shall payment of documentary stamp tax and
be considered the fair market value of registration fees, transfer certificates of
the land: Provided, that when subject titles."
land has no tax declaration, the
valuation thereof shall be computed on Section 4. Incentives. - Considering that
RA 7279, which grants exemption from the
the basis of the applicable Schedule of
Market Values of the city or municipality payment of real property taxes on real
in force during the corresponding period: property(s) owned by the National Housing
Authority, Is special in character and is a
Provided, further, that if no unit base
market value has been fixed in the later enactment, the exemption provisions of
Schedule of Market Values for that city RA 7279 shall prevail over the provisions of
the Local Government Code of 1991
or municipality, the unit base market
value fixed in the Schedule of Market governing real property tax exemption. Thus,
Values for land of similar conditions all real properties owned by the National
Housing Authority shall be exempt from the
within the city or municipality located in
the adjacent area or barangay shall be payment of real property taxes beginning
January of the year following the year of
used in determining the fair market value
of subject land. effectivity of RA 7279.
187
 However, once the beneficial use of real Section 5 Repealing Clause. - All
properties owned by NHA Is granted, for existing Department orders, rules,
consideration or otherwise, to a taxable regulations, circulars and other issuances of
person, the grantee of said property shall be this Department which are inconsistent with,
liable to the payment of the real property or contrary to, this Circular, are hereby
taxes due thereon although the property is repealed. amended or modified accordingly.
still in the name of NHA pending the
payment of the full price, considering that its Section 6. Effectivity - This Circular
use and possession are already delivered to shall take effect immediately.
the grantee.

(Sgd.) RAMON R. DEL R08ARIO. JR.

Secretary