The Philippines is set to experience a substantial increase in local government revenues due to the Real Property Valuation and Assessment Reform Act (RPVARA), projected to take effect by 2030. The Department of Finance (DoF) indicates that these reforms will provide significant financial benefits to local government units (LGUs) as updated property valuations are implemented.
Transitioning to a New Valuation System
Come succeeding revisions, that’s the time... you will see the impact of the RPVARA when it comes to LGU revenue.
Consolacion Q. Agcaoili, Executive Director, Bureau of Local Government Finance
- Funding support through the Real Property Tax Administration Fund.
- Implementation assistance for lower-income LGUs.
Finance Secretary Frederick D. Go emphasized the importance of the RPVARA in enhancing the consistency and transparency of property valuations. He noted that these changes would not only lower business costs but also increase investor confidence. Furthermore, municipalities will retain the authority to set tax rates while adhering to new valuation standards.
The reform is designed to create a more predictable tax environment, which is expected to support long-term development. Agcaoili mentioned that property taxes in many areas will likely rise as a result, although a 6% interest rate cap will be in place until 2028 to mitigate immediate impacts on property owners.
Under the RPVARA, market value schedules will be revised every three years. This approach, which uses mass appraisal techniques, aims to evaluate properties collectively rather than individually, ensuring fairness and efficiency in property taxation.
The DoF anticipates that the RPVARA will not only update property appraisal practices but also improve collaboration between national and local governments. This transformation is seen as crucial for enhancing local governance while maintaining local autonomy.