What Do You Need To Know About Real Estate Taxes in The Philippines?

If you are wondering how to compute real property tax, the formula is fairly
simple: RPT = RPT rate x assessed value. What is assessed value? It is fair

market value of the property multiplied by the assessment level, which is fixed
through ordinances.
2%
Real property tax rates at 1% to 2% of assessed value
Under Section 233 of the Local Government Code of 1991, the following rates of basic real
property tax are prescribed based on assessed values of real properties in the Philippines:
1% for province; and, 2% for city or municipality within Metro Manila area
What do you need to know about real estate taxes in the

Philippines?
1. Rates of real property tax in the Philippines

2. Additional taxes for real estate properties
3. Deadline of real property tax payments
4. Where to pay real property tax payments
5. Consequences of failing to pay real property tax
Purchasing a real estate property is often deemed a rewarding experience for

many people. For those who want to establish their life comfortably, signing a
deed of sale is defined as a pinnacle of success. However, everyone should
know that buying a home also entails a series of responsibilities. For one,
homebuyers have a civic duty to assess, declare, and pay their real estate
taxes in the Philippines.
You should be knowledgeable about the taxes cornered in owning a property.

According to Republic Act No. 7160 or RA 7160, the government shall
administer, apprise, levy, and collect real property tax. Continue reading on to
learn more about this.
What Is Real Property Tax?
If you are a homebuyer, you might be wondering about what exactly is real
property tax. Local government units (LGU) are given the authority to collect
their source of revenue to fund public expenditure. Real property tax (RPT) is
a type of revenue source for the LGU. It is levied every year, and the property
owner or administrator is responsible for the tax payment.
RPT can be imposed on residential, agricultural, and commercial properties.

All the fixed provisions for the RPT are discussed in the Title II of the Local
Government Code (LGC), Republic Act No. 7160.
Rates Of Real Property Tax In The Philippines
Under Section 233 of the RA 7160, the rates of real property tax will depend
on the respective location of the property and the assessed value of the
property in the Philippines. The rate of real property tax within the
Metropolitan Manila Area is 2% assessed value of the real property. In
comparison, the rate for provincial areas is 1% of the assessed value of the
real property. The assessment levels used to determine real property value
are fixed according to ordinances.
To compute your property’s RPT, you need to multiply the RPT rate along with
your property’s assessed value. You can refer to the assessment levels
prescribed in Section 218 of the RA 7160.
For example, if you own residential land in Cagayan de Oro with a market

price of P3,000,000.00. Multiply P3,000,000.00 with the corresponding
assessment level (20%). Afterward, multiply this with the provincial RPT rate
(2%). The real property tax you need to pay is P12,000.
Additional Taxes For Real Estate Properties
Apart from the real property tax, LGUs can collect additional taxes from you,
accrued to the Special Education Fund. An additional 1% can be levied on top
of the assessed value of the real property. This will be used as part of the
budget of local schools.
Another additional tax that can be levied from real estate properties includes
the ad valorem tax on properties that become idle. For this, the rate will not
exceed 5% of the assessed value of the real property. This is why it is always
ideal to put your property to good use instead of leaving it idle. If you want,
you can always generate passive income from your residential properties.
Deadline of Real Property Tax Payments
As a property owner, you can choose to pay your real property tax in full for a
whole year or through quarterly payments. The payment deadline will be on or
before January 31 every year for those who choose to pay in full. However, if
you choose to pay quarterly, the deadline dates are:
 1st quarter: On or before March 31

 2nd quarter: On or before June 30
 3rd quarter: On or before September 30
 4th quarter: On or before December 31
Where To Pay Real Property Tax Payments
Property owners can pay their real property tax at the Treasurer’s Office of the
LGU in Land Tax. Keep in mind that you can always pay the tax in advance.
In fact, some cities offer tax discounts for advance payments. Make sure to
check with your local treasurer for more information about this.
Consequences of Failing To Pay Real Property Tax
You are responsible for the financial obligations that come with your property.
If it so happens that you fail to pay your real property tax, there will be
corresponding penalties to pay as well. Late payments are subject to a 2%
interest per unpaid amount. This amount can reach up to a maximum of 72%
if unpaid for three years.
Key Takeaway
Indeed, owning your dream home can be rewarding, but it is also a

responsibility. As an owner, it is your civic obligation to pay your real property
tax every year promptly. This article provides a comprehensive guide to real
estate taxes in the Philippines to help you get started.
Fast Facts about PH Real Property Taxes
If you’re a new property owner, you’re probably wondering how much you’ll be paying
for taxes. Here are some of the things you need to know about the actual fees:
Tax rates: They vary depending on the location of your property. In Metro Manila, the
rate is 2% of the assessed value. In the provinces, it’s 1%.
Tax computation: The formula for real property tax is RPT rate multiplied by the
assessed value (AV). The AV is the fair market value of the property multiplied by
the assessment level, which is determined by the ordinances. In this blog, you can
see a sample computation.
Other tax obligations: Aside from the basic real property tax, you also have to settle
the tax for the Special Education Fund. This is an additional 1% tax on real property,
in which the proceeds go to the local schools. Take note that if your property
becomes idle, it may be subject to an additional charge on the assessed value, a
maximum of 5%. If you’re not using the property as a residence, turn it into a profit-
generating asset, a rental, for instance.
Smart property owners are good taxpayers. Start the new year right by committing to
paying your dues early. You’ll be able to score huge discounts and avoid financial
troubles, helping you make 2022 a truly prosperous year.
Deadlines for 2022 Real Property Tax

Payments
Remember, there are two options for paying real property tax: in full for the entire
year or in quarterly installments. For the former, you must settle your obligation on
or before January 31, 2022. As for the latter, these are the deadlines:
 First quarter: On or before March 31, 2022

 Second quarter: On or before June 30, 2022
 Third quarter: On or before September 30, 2022
 Fourth quarter: On or before December 31, 2022
Local government units offer a 10 to 20% discount on taxes when you pay ahead of
the deadlines. On the flip side, late payments are subject to a 2% interest per unpaid
amount. Failure to pay for 36 months or three years will incur a maximum of 72%
penalty.
If you haven’t been able to settle your taxes the past months, your local government
unit (LGU) may be offering tax amnesty programs, which waive payment of penalties
and interests. Pasay is among the Metro Manila cities that recently granted amnesty
for non-payment of real property taxes. Property owners with or without notice of
delinquency are covered in the program.

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If you are wondering how to compute real property tax, the formula is fairly

simple: RPT = RPT rate x assessed value. What is assessed value? It is fair

What do you need to know about real estate taxes in the

1. Rates of real property tax in the Philippines

Purchasing a real estate property is often deemed a rewarding experience for

You should be knowledgeable about the taxes cornered in owning a property.

What Is Real Property Tax?

RPT can be imposed on residential, agricultural, and commercial properties.

Rates Of Real Property Tax In The Philippines

For example, if you own residential land in Cagayan de Oro with a market

Additional Taxes For Real Estate Properties

Deadline of Real Property Tax Payments

 1st quarter: On or before March 31

Where To Pay Real Property Tax Payments

Consequences of Failing To Pay Real Property Tax

Indeed, owning your dream home can be rewarding, but it is also a

Deadlines for 2022 Real Property Tax

 First quarter: On or before March 31, 2022

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