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LOCAL TAXES

Real Property Tax


Other Levies on Real Properties
Other Local Taxes

Rex B. Banggawan, CPA, MBA


Real Property Tax
Imposed upon real properties (land and
improvements) by the City or Municipality
Accrues every January 1
Real property tax constitute a lien on the
property and is superior to any other lien,
or encumbrance of any kind
Determination of the RPT
Determine property fair market value
Determine the assessment level
Determine assessed value
Determine Real Property Tax
Fair value and
Assessment level
Fair value based on Assessors value as
indicated in the Tax Declaration
Assessment level
fixed by the Provincial/City/Municipal
Council (Sanggunian)
Subject to a maximum rate and varies per
province/city/municipality
Assessed value
Computed as:

Fair value x Assessment Level


Assessment Level - land
Residential 20%
Agricultural 40%
Commercial/Industrial and Mineral 50%
Timberland 20%
Special classes: Cultural, scientific 15%
Hospital and water districts 10%
Assessment level -
Building
Residential P175,000 or less 0% up to 60%
for those more than P10M
Agricultural 25% for P300,000 or less to
50% for those with more than P2M fair value
Commercial/Industrial 30% for P300,000
or less to 80% for those with more than P10M
fair value
Timberland 45% for those with FMV of
P300,000 or less to 70% for those with FMV of
more than P2M
Real Property Tax
Computed as:

Assessed Value x Tax Rate


Maximum Real Property Tax Rates
Cities and Municipalities within Metro
Manila 2%

Provinces 1%
Illustration
You own a residence here in Bayombong with
the following fair value per Tax Declaration:
Land P1,000,000
House P2,500,000

The Municipal Sanggunian of Bayombong set


the maximum assessment level for land. The
house has 40% assessment level.

Compute the Real Property Tax.


Deadlines
For lump sum On or before January 31
(On some jurisdiction early payment is
entitled to a discount of up to 20%)
For installment due in four quarterly
payments:
March 31
June 30
September 30
December 31
Venue of Payment
Treasurers Office of the LGU
Penalties
2% interest per month on the unpaid
amount until the tax is fully paid up to a
maximum of 36 months
Exempted Properties
Public properties
Religious, educational and Charitable entities
Machineries and equipments actually, directly
and exclusively used by local water districts
and GOCCs engaged in the supply and
distribution of water and or distribution and
transmission of electric
Real properties of registered coopperatives
Machinery and equipment used for pollution
control and environmental protection
Levies on Real Properties
Special Education Fund Tax uniform 1%
rate with the same basis to the RPT
Ad valorem Tax on idle lands 5% on same
basis with RPT
What is idle land?
Agricultural land with more than 1 hectare land
area of which remain uncultivated or
unimproved
Land other than agricultural with more than 1,000

sq.m., of which remain unutilized


Residential lots in subdivision
Levies on Real Properties
Special Levy lands within the territorial
jurisdiction specially benefited by public works
projects or improvements funded by the LGU
concerned. Special levy shall not exceed 60%
of the actual cost of such projects and
improvements.
Levies on Real Properties
Social Housing Tax - A tax of of 1% of
the value of all lands in urban areas in excess
of P50,000. This may be imposed by a
province, city, municipality within MMA.
Levies on Real Properties
Tax on Transfer of Real Property
Ownership a tax on sale, donation, barter
or any other mode of transferring ownership
or title to real property. The rate is not more
than 50% of 1% for provinces and 75% of 1%
in the case of cities or municipalities in the
MMA based on FMV or GSP w/e is higher.
Exempt Disposal of real property pursuant to
CARP
OTHER LOCAL TAXES
Provincial Taxes
Municipal Taxes
City Taxes
Barangay Taxes
Provincial Taxes
Tax on business of printing and
publication not to exceed 50% of 1% of
gross receipts of prior year
For newly started, not to exceed 1/20 of 1% of
capital investment
Tax on franchise not to exceed 50% of 1%
of annual gross receipt.
For newly started, not to exceed 1/20 of 1% of
capital investment
Provincial Taxes
Tax on Gravel and Quarry Resources
not exceeding 10% of the value in the locality
per cubic meter of gravel or quarry resources
extracted from public lands or waters within
the territorial jurisdiction
Provincial Tax
Professional Tax tax on each person
engaged in the exercise of his/her profession
requiring government examination not
exceeding P300
Amusement Tax - not exceeding 10% of
admission fees of theaters, cinemas, concert
halls, circuses, boxing stadia and others
Annual fixed tax on delivery trucks or vans
used in the deliveries of distilled spirits,
liquors, soft drinks, cigars, cigarettes to
outlets in the provinces - not exceeding
P500/truck
Municipal Tax graduated-fixed
Business Tax graduated tax and fixed
tax
Manufacturers, assemblers, repakers,
processors, brewers of liquors, distilled
spirits and wines (with table table)
Wholesalers, distributors or dealers in any
article of commerce of whatever kind or
nature (with tax table)
Municipal Tax graduated-fixed
Exporters and manufacturers, millers,
producers, wholesalers, distributors, dealers
or retailers of essential commodities
Contractors and other independent
contractors (with tax table)
Municipal Tax
Percentage tax
Retailers - 2% for GR of P400,000 or less
and 1% for GR of over P400,000
Bank and other financial institutions
not exceeding 50% of 1% of gross receipts
from lending activities, financial leasing,
dividend, insurance premium and rent on
property and profit from exchange or sale of
property
Municipal Tax
Percentage tax
Any business, not included in prior
categories, to be taxed at a rate to be
determined by the Sanggunian. If business is
excisable or vatable, the rate shall not exceed
2% of the gross sales or receipt.
Peddlers annual tax of P50/pedder
City Taxes
May impose those imposed by provinces or
municipalities at a rate which exceeds the
maximum rates by not more than 50%, except
for the fixed tax on professional and
amusement taxes.
Note on Community Tax
City and municipal governments may impose
a Community Tax for:
Individuals
Basic of P5.0 + Additional of P1/P1K, maximum of
P5K
Corporations
Basic of P500 + Additional of P2/P5K, maximum of
P10K
Exempt:
Diplomats and consular representatives
Transient visitors (stay not exceeding 3 months)
Barangay Taxes
Barangay may impose a tax of not more than
1% of gross sales or receipts on stores or
retailers with fixed business establishments
with
Annual sales or receipts of P50,000 or less for
cities
Annual sales or receipts of P30,000 or less for
municipalities
Thank you!