January 14, 2013

Paying Real Property Taxes in the Philippines

Owners of land and buildings have to pay Real Property Tax every year. A tax that you can pay annually or quarterly but I have no idea about quarterly since we are going to pay it every year. 

Last Friday was our first-time experience to personally pay our Real Property Tax (RPT) because for the last two years we already issued post-dated checks to our Developer for our RPT. We went to our municipal office to pay our RPT, we’re expecting long lines but it took us only a few minutes to pay it. We just gave our Official Tax Receipt from our Developer and pay the fee. That’s it!

Real Property tax payments are made at the Land Tax Division of the City Treasurer’s Office (CTO). 


Copy of latest Real Property Tax Declaration
Photocopy of latest Real Property Tax payment/Official Receipt

Taxes, Fees and Discounts


Basic Real Property Tax = Fair Market Value x Assessment Level x Basic Tax Rate
Additional Tax (Special Education Fund) = Fair Market Value x Assessment
Level x 1.00%

Fair Market Value:

Based on the Schedule of Fair Market Values proposed by the City Assessor and approved by the Sangguniang Panlungsod.

Assessment Level:

On Land   Type                         Assessment Level

Residential                                          20%
Agricultural                                         40%
Commercial                                        50%
Industrial                                            50%

* Residential   1.5 %
* Commercial 2.0%

Discount and Penalties

Prompt payment (paid on or before the
Deadline                                               - 10% discount on basic tax, SEF

Advance payment (paid before
January of the taxable year                    - 15% discount on basic tax, SEF

* Failure to pay tax                                - 2% interest per month on the unpaid
                                                            amount or fraction thereof, but total
                                                            interest shall not exceed 36 months

Source: For more information click here

The discounts depend on where you live but it ranges from 10 to 20% or even higher in some places. The deadline for the discount varies too, it depends on where you live, some places until January only while other places until March. And because I want to save money, I'm planning to pay our RPT every December so I won't miss the discount. 

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