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!




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

Requirements:

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

Taxes, Fees and Discounts

Taxes:

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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