How do you compute the Assessed Value?

Assessed Value = Fair Market Value x Assessment

Level

Sec. 199 (l) of the LGC defines Fair Market Value as the price at which a property may
be sold by a seller who is not compelled to sell and bought by a buyer who is not
compelled to buy. In practice, however, the Fair Market Value is based on the
assessment of the municipal or city assessor as written in the Tax Declaration.

The Assessment Level shall be fixed through ordinances of the Sangguniang

Panlalawigan, Sangguniang Panglungsod, or the Sangguniang Pambayan of the
municipality within the Metro Manila area. To get this data, look for the tax Ordinance of
the city or municipality where your property is located.

Maximum Assessment Level rates

I. Land

Class Assessment Level

Residential 20%

Timberland 20%

Agricultural 40%

Commercial 50%

Industrial 50%

Mineral 50%
II. Building and Other Structures

1. Residential
FMV Over But Not Over Assessment Level

0.00 175,000.00 0%

175,000.00 300,000.00 10%

300,000.00 500,000.00 20%

500,000.00 750,000.00 25%

750,000.00 1,000,000.00 30%

1,000,000.00 2,000,000.00 35%

2,000,000.00 5,000,000.00 40%

5,000,000.00 10,000,000.00 50%

10,000,000.00 60%

2. Agricultural

FMV Over But Not Over Assessment Level

300,000.00 25%

300,000.00 500,000.00 30%

500,000.00 750,000.00 35%

 750,000.00 1,000,000.00 40%

1,000,000.00 2,000,000.00 45%

2,000,000.00 50%

3. Commercial/Industrial

FMV Over But Not Over Assessment Level

300,000.00 30%

300,000.00 500,000.00 35%

500,000.00 750,000.00 40%

750,000.00 1,000,000.00 50%

1,000,000.00 2,000,000.00 60%

2,000,000.00 5,000,000.00 70%

5,000,000.00 10,000,000.00 75%

10,000,000.00 80%
4. Timberland

FMV Over But Not Over Assessment Level

300,000.00 45%

300,000.00 500,000.00 50%

500,000.00 750,000.00 55%

750,000.00 1,000,000.00 60%

1,000,000.00 2,000,000.00 65%

2,000,000.00 70%

II. Machineries

Class Assessment Level

Agricultural 40%

Residential 50%

Commercial 80%

Industrial 80%
Sample Computation
Data:

Actual use of property: Residential

Location: City within Metro Manila

FMV per assessors officer (based on Tax Declaration):

Land P350,000
Improvement P350,000

Assessment Level for Land: 20%

Assessment Level for Improvement: 20%

Note: The assessment levels are fixed through ordinances of the Sangguniang
Panlalawigan, Sangguniang Panglungsod, or the Sangguniang Pambayan of the
municipality within the Metro Manila area. We will be using the maximum rates for
sample computation purposes.

Computation

Assessed Value of Land = P350,000 x 20% = P70,000

Assessed Value of Improvement = P350,000 x 20% = P70,000

Basic Real Property Tax for Land and Improvement

= (P70,000 + P70,000) x 2% = P2,800

Special Education Fund (SEF) for Land and Improvement = (P70,000 + P70,000) x
1% = P1,400

Special Classes of Real Property

All lands, buildings, and other improvements thereon actually, directly and exclusively
used for hospitals, cultural, or scientific purposes, and those owned and used by local
water districts, and government-owned or controlled corporations rendering essential
public services in the supply and distribution of water and/or generation and
transmission of electric power

What are the assessment levels for special classes of real property?

Actual Use Assessment

Level

Cultural 15%

Scientific 15%

Hospital 15%

Local water districts 10%

Government-owned or controlled corporations 10%

engaged in the supply and distribution of water
and/or generation and transmission of electric
power

How do you compute real property tax (RPT)?

RPT = RPT Rate x Assessed Value

What are the RPT rates?

Maximum RPT rates:

Coverage RPT rate

Cities and Municipalities within Metro Manila 2%

Provinces 1%
Special Education Fund (SEF) 1%
In addition to the basic RPT, the LGUs may levy and collect an annual tax of one
percent (1%) which shall accrued exclusively to the Special Education Fund (SEF).

Ad Valorem Tax on Idle Lands 5%

In addition to the basic RPT, the LGUs may collect a maximum idle land tax is 5%
assessed value of the property.