REAL PROPERTY

PROF. JEANEFER REYES

CPA. MPA
Assessment level and assessed
value
ASSESSMENT LEVEL- the percentage applied
to the FMV to determine the assessed
value of the property.
ASSESSED VALUE (taxable value)-the FMV of
the real property multiplied by the
assessment level.
Limitations on assessment level (not
exceeding)
A. On Lands and Machineries
Classification Assessment
Levels
Land Machineries
Residential 20% 50%
Timberland 20% -
Agricultural 40% 40%
Commercial, industrial 50% 80%
Mineral 50% -
Special classes: cultural, hospital, scientific 15% 15%
Local water districts 10% 10%
Government owned or controlled corporations
engaged in the supply and/or generation/ transmission 10% 10%
of electric power
 B. On Improvements
Fair market value Commercial/
Over Not over (+000) Residential Industrial Agricultu Timberla
(+000) ral nd
P175 0% 0% 0% 0%
P175 300 10% 30% 25% 45%
300 500 20% 35% 30% 50%
500 750 25% 40% 35% 55%
750 1M 30% 50% 40% 60%
1M 2M 35% 60% 45% 70%
2M 5M 40% 70% 50% 70%
5M 10M 50% 75% 50% 70%
10M 60% 80% 50% 70%
Tax rates on the basic tax
In provinces - Not exceeding 1% of the assessed value
In cities, and municipality of Pateros - Not exceeding 2% of the assessed value
• Additional levies (in addition to basic RPT)
• Special Educatio=n Fund Tax (SEF) – 1% of AV
• Ad valorem tax on Idle Lands – not exceeding 5%
of AV
• Special Levy or special assessment
PROBLEM
A vacant commercial land located in a city measuring 2,000
square meters has a market value of P1,100 in the tax
declaration and a zonal value of P800. The city has maximized
the assessment level and the tax rate to that allowed by law.
COMPUTE for the following:
The total real property tax payable per year.
The maximum amount of discount that will be allowed as
deduction from his tax due if the taxpayer paid in advance.
The total amount payable if the taxpayer pays his real property
tax after twelve (12) months of delinquency.
SOLUTION:
SOLUTION
FMV (1,100 x 2,000) 2,200,000 (b) Discount (33,000 x 6,600
20%)
x Assessment level 50%
Assessed value 1,100,000 (c) RPT 33,000
x Tax rate 2% Interest (33,000 x
24%) 7,920
Basic tax 22,000 Total amount payable 40,920
+ SEF (1,100,000 x 1%) 11,000
Total RPT payable 33,000
2. A tax declaration contains the following
data: -
Actual use of property Residential
Market value Assessment level
Land P 500,000 15%
Improvement 800,000 20%

COMPUTE for the following –

The taxable value on the land and
improvement.
The basic real property tax on the land and
improvement if the tax rate is 1%.
The total real property tax assessable on the
properties.
 SOLUTION:

(a) AV–land (500,000 x 15%) 75,000 (c) Basic tax 2,350

AV–improvement (800,000 x 160,000 Special education 2,350
20%) fund
Taxable/assessed value 235,000 Total real property 4,700
tax payable

(b) Taxable value 235,000

x Tax rate 1%
Basic RPT 2,350