The real property tax (RPT) is an ad valorem tax on real properties such as lands, buildings, and other improvements, and machineries imposed by provinces, cities and municipalities within the Metropolitan Manila Area (MMA).
a) Provinces - Not exceeding 1% of the assessed value of the real propety.
b) Cities or Municipalities within Metro Manila - Not exceeding 2% of the assessed value.
Notes: Maximum Assessed Value = Fair Market Value (FMV) x certain percentage (Assessment Level, AL)
Assessment Level Example):
Residential Land : 20% of FMV
Commercial Land : 50% of FMV
Residential buildings : 0% for those with FMV of PhP175,000 or less to 60% for those with FMV of
more than PhP10 million.
Commercial Machineries : 80% of FMV
Notes: Some LGUs provide discount when property owners pay early. There are notice, so check with the city hall in early January if there is or not.
Notes: It's a different tax with Capital Gain tax which you pay when sell capital assets.
Notes: There are some laws which exempt RPT like PEZA. PEZA locators pay 5% of gross income in lieu of all national and local taxes.
2. Special Education Fund Tax
In addition to the basic RPT, a province or city, or a municipality within the MMA may levy and collect an annual tax of 1% on the assessed value of real property which shall be in addition to the basic RPT.
3. Idle Lands Tax
A province or city, or a municipality within the MMA may levy an annual tax on idle lands at a rate not exceeding 5% of the assessed value of the property which shall be in addition to the basic RPT.
a) Agricultural lands, more than one (1) hectare in area, one-half (1/2) of which remain uncultivated or unimproved. Not considered as idle lands are (i) agricultural lands planted to permanent or perennial crops with at least fifty (50) trees to a hectare, and (ii) lands actually used for grazing purposes.
b) Lands, other than agricultural, located in a city or municipality more than one thousand (1,000) square meters in area, one-half of which remain unutilized or unimproved.
Notes: Regardless of land area, the tax shall likewise apply to residential lots in subdivisions.
4. Special Levy on lands
b) Lands, other than agricultural, located in a city or municipality more than one thousand (1,000) square meters in area, one-half of which remain unutilized or unimproved.
4. Special Levy on lands
A province, city or municipality may impose a special levy on the lands within its territorial jurisdiction specially benefitted by public works projects or improvements funded by the LGU concerned.
5. Socialized Housing Tax
The tax is 1/2 of 1% of the assessed value of all lands in urban areas in excess of PhP50,000.00.
6. Tax on Transfer of Real Property Ownership
A province, city or municipality within the MMA may impose a tax on the sale, donation, barter, or any other mode of transferring ownership or title of real property at the rate of not more than 50% of 1% in the case of a province and 75% of 1% in the case of a city or a municipality in MMA of the total consideration involved in the acquisition of the property or of the FMV in case the monetary consideration involved in the transfer is not substantial, whichever is higher.