Property valuation system overhaul expected by 2028

THE Bureau of Internal Revenue (BIR) is preparing to overhaul the property valuation system in 2028, citing the need to align property values with market rates.

In a social media post, the BIR said it conducted an executive briefing on the Real Property Valuation and Assessment Reform Act (RPVARA) last week.

“RPVARA is a much-awaited, long-term reform. Hindi man ito repormang mararamdaman nang buo overnight (the impact of the reform will not be felt overnight), it will shape the way the government values, administers, and taxes real property for many years to come,” BIR Commissioner Charlito Martin R. Mendoza said.

The new system will adjust appraisal practices, set valuation standards, and strive for improved cooperation between national and local governments.

According to BIR, current zonal values remain in force for now and will eventually be replaced once the new schedules of market values are issued. 

“The BIR had earlier halted all zonal valuation revision activities as part of the transition, while the Department of Finance (DoF) targets full implementation of the new system by 2028 to 2029,” it added.

Local government units will retain authority over tax rates and assessment levels under the RPVARA, while valuation standards and oversight will be strengthened via oversight by the Bureau of Local Government Finance.

Mr. Mendoza said that preparation is needed to ensure that personnel, systems, data architecture, and regulations are ready to carry out the reform.

“If we prepare well today, we help build a valuation and revenue system that taxpayers, local governments, and the national government can rely on for years to come,” he added.

Harold V. Cruz, senior associate director for valuation at Colliers, said the move is expected to benefit the public by improving transparency via up-to-date real estate transaction values.

“This should result in enabling the market participants to conclude deals with utmost transparency and allow the government to achieve a more equitable tax collection,” he said in a Viber message.

“The new system will also streamline the tax calculation procedures which will hopefully hasten the process,” he added.

In a separate statement, the BIR said it opened the relocated Revenue District Office (RDO) No. 42 to Greenhills, San Juan City, to improve accessibility and taxpayer services.

“We are in a business center. We are closer to taxpayers, closer to establishments, and closer to the everyday activity of commerce. That matters greatly because accessibility is part of service,” Mr. Mendoza said.

RDO No. 42 was previously located along F. Blumentritt Street before transferring earlier this year to GH Tower in the Greenhills Center. — Justine Irish D. Tabile