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 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 for 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 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 want to pay for our RPT every December so I won't miss the discount.

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