EVERYTHING YOU NEED TO UNDERSTAND ABOUT REAL PROPERTY TAX
Why we need to pay Real Property Tax?
First, let’s dig into the rationale behind this type of tax. The RPT was designed as part of law that means to empower the local government units or (LGU) with the ability to generate revenue by creating and imposing taxes,fees,etc. The RPT’s legal basis is found in Title II of the Local Government Code of 1991 or Republic Act 7160 and income from RPT,simply put,helps the local government sustain its function and duties.
WHAT is the Real Property Tax?
It is a tax applied for any form of real property as defined in the next covers land,building,improvements,and machinery. It is paid by the property owner to the LGU or specifically the municipality Treasurer.
How is it computed?
To compute for the Real Property Tax,follow this formula.
RPT=RPT rate x Assessed Property Value
First, to determine the Assessed Property Value with the LGU will evaluate the property’s Fair Market Value,or the selling price of an item where both the buyer and seller can agree. This is multiplied by the Assessment level which varies per ordinance per city. Use the formula below as a guide:
Assessment Property Value=Fair Market x Assessment Level
The Assessment Level on the other hand, depends on the classification of the property. (See below for sample assessment levels)
*Note that the total fair market value of price of property includes the market value of the improvement spent*
Meanwhile,the RPT Rate is fixed (See below for minimum rates per area)