Real Property Tax (RPT)

What is RPT
- tax that owners of real property need to pay every year so that the local government unit (LGU) will
not auction off their property.
- the tax on real property imposed by the Local Government Unit (LGU). The legal basis is Title II of the
Local Government Code (LGC), Republic Act (R.A.) no. 7160
- The RPT for any year shall accrue on the first day of January and from that date it shall constitute a
lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind
whatever, and shall be extinguished only upon payment of the delinquent tax.
- If you have prior years delinquencies, interests, and penalties, your RPT payment shall first be
applied to them. Once they are settled, your tax payment may be credited for the current period.
Who should pay the RPT
- The owner or administrator of the property
Where to pay
- At the City or municipal treasurers office
When to pay
- If you choose to pay for one whole year, the payment is due on or before January 31.
- If the basic RPT and the additional tax accruing to the Special Education Fund (SEF) are paid in
advance, the sanggunian concerned may grant a discount not exceeding twenty percent (20%) of the
annual tax due.
- If you choose to pay in installments, the four quarterly installments shall be due on or before the last
day of each quarter, namely: March 31, June 30, September 30, and December 31
- In case of failure to pay the basic RPT and other taxes when due, the interest at the rate of two
percent (2%) per month shall be imposed on the unpaid amount, until fully paid.
- The maximum number of months is thirty-six (36) months, so effectively, the maximum interest rate
is seventy-two percent (72%).
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 accrue 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.
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

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 10,000,000.0 75%
0
10,000,000.0
0

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 1,000,000.0 60%
0
1,000,000.0 2,000,000.0 65%
0
0
2,000,000.0
0

70%

II. Machineries
Class

Assessment Level

Agricultural

40%

Residential

50%

Commercial

80%

Industrial

80%

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

Assessme
nt Level

Cultural

15%

Scientific

15%

Hospital

15%

Local water districts

10%

Government-owned or controlled
corporations engaged in the supply

10%

and distribution of water and/or

generation and transmission of
electric power
What are Idle Lands?
1. Agricultural lands more than one (1) hectare in area, suitable for cultivation, dairying, inland fishery,
and other agricultural uses, of which remain uncultivated or unimproved.
Exceptions
i.
Lands planted to permanent or perennial crops with at least 50 trees to a hectare; and
ii. Lands used for grazing purposes (Note: put goats or cows on your property).
2. Lands Other than Agricultural, located in a city or municipality, more than 1,000 sqm. in area, of
which remain unutilized or unimproved
3. Residential lots in subdivisions, regardless of land area

Transfer Tax
imposed on tax on the sale, donation, barter, or any other mode of transferring ownership or title
of real property at the maximum rate of 50% of 1% (75% of 1% in the case of cities and
municipalities within Metro Manila) of the total consideration involved in the acquisition of the
property or of the fair market value in case the monetary consideration involved in the transfer is
not substantial, whichever is higher.
This is pursuant to Section 135 of the Local Government Code of 1991 (LGC).
*** You need to pay the transfer tax because the evidence of its payment is required by the Register of
Deeds of the province concerned before registering any deed.
*** This is also required by the provincial assessor before cancelling an old tax declaration and issuing
a new one in its place.
*** Do not confuse the transfer tax which is paid to the local government with the transfer taxes due to
the BIR (which may either be donors or estate taxes).
-

Who should pay

- The payment of the transfer tax is the responsibility of the seller, donor, transferor, executor or and
administrator.