Source: Manual on Real Property Appraisal and Assessment Operations Concept of Market Value Market value is not determined,

it is estimated. It is estimated through the application of valuation methods and procedures that reflect the nature of the property and the circumstances under which the given property would most likely trade in the (open) market. The most common methods used to estimate Market Value include the cost approach, market data/sales comparison approach, and the income capitalization approach, including discounted cash flow analysis. Approaches to Value as used in Mass Appraisal A. The Cost Approach The cost approach is based on the proposition that, an informed purchaser would pay no more for a property than the cost of producing a substitute property with the same utility as the subject property. B. The Market Data Approach The market data or comparative approach is that approach in appraisal analysis which is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. C. The Income Approach In the Income Approach, an estimate is made of the prospective economic benefits of ownership. This approach is predicated on the proposition that an informed purchaser would pay no more for a property than the cost of obtaining an income stream of the same size and embodying the same risk as that involved in the subject property. The income approach is particularly applicable when the future benefits of ownership may reasonably be estimated in the light of related risks to be incurred. Procedure for the Approval of Ordinance Prescribing the Schedule of Fair Market Values, Revenue Measures and their Effectivity 1. The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of R.A. No. 7160; 2. Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof; 3. Provided further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal; 4. Provided, however, That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of tax, fee or charge levied therein; 5. Provided, finally, That within thirty (30) days after receipt of the decision, or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.

Requirements for the Appraisal of Land Declared for the First Time A. For Untitled Property: 1. A survey plan prepared by a duly licensed Geodetic Engineer duly approved by the Land Management Bureau (LMB) of the Department of Environment and Natural Resources (DENR); 2. A certification from the Community Environment and Natural Resources Office (CENRO), stating among others, that the land is within the alienable and disposable area; 3. An affidavit of ownership and/or Sworn Statement declaring the Market Value of Real Property filed by the owner/administrator; Affidavit that the applicant is in long, continuous and notorious possession of the property. 4. A certification from the barangay captain that the declarant is the present possessor and occupant of the land and the certification of the adjoining owners duly sworn to by the barangay captain and/or the municipal mayor; 5. An ocular inspection/investigation report by the assessor or his authorized representative; In cases of newly discovered lands wherein the possessor/occupant whose rights can not be established, the foregoing requirements under (1) to (5) hereof, shall likewise apply; In case of lands of the public domain occupied and possessed by National Cultural Communities prior to July 4, 1955, a certification from National Commission for Indigenous Peoples (NCIP) shall be submitted. In case of an untitled property being claimed by two or more persons whether natural or juridical a tax declaration shall be issued for each claimants. B. ForTitledProperty: 1. A certified true copy of free patent, homestead or miscellaneous sales application must be submitted; 2. A certified true copy of the title issued by the Registrar of Deeds, certifying among others, that the original copy of which is intact and existing in the said registry; and 3. Approved survey plan

Rules in the Appraisal of Buildings Buildings are considered immovable provided they are more or less of a permanent structure, substantially adhered to the land, and not mere superimpositions on the land like barong-barongs or quonset fixtures and provided there is the intent of permanent annexation. Note that the law uses the term adhered and not superimposed. This is true, whether the building is built on ones own land, or on rented land. The reason is clear: the law on this point does not distinguish as to who built or owns the building. (Civil Code of the Philippines, 14th Ed., Vol. II, p. 9, Paras) Rules in the Appraisal of Machinery and Equipment A. Machinery and equipment, collectively, constitute a general classification of property other than real estate. Machinery includes installation and support facilities for processing or manufacturing of products, from raw materials to finished goods. Rules for the Assessment of Lands 1. Lands actually and principally used for residential, agricultural, commercial, industrial or mineral purposes shall be classified and valued according to the schedule of unit base market values and assessed at their corresponding levels of assessment, which shall be fixed through an ordinance by the Sanggunian concerned. 2. Lands located in areas of mixed land uses such as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification, valuation and assessment thereof. If the predominant use is residential, all lands in that area shall be assessed as residential; if the predominant use is commercial or industrial, all lands in that area shall be assessed as such. 3. A lot or parcel of land classified and appraised as commercial or industrial occupied by a building used both for residential and commercial or industrial purposes shall be assessed on the basis of the predominant use of the building or buildings. If the predominant use of the building is residential, the assessment level fixed thereon for residential land shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values; if industrial or commercial, the assessment level for industrial or commercial shall be applied on the basis of the schedule of base market values. 4. Vacant lands shall be assessed like similar lands in the locality. 5. Lands owned 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, located in residential, commercial or industrial area shall be assessed as special property at ten percent (10%) assessment level applied to the market value. If those special classes of lands are, however, located in areas of mixed land uses, such as residential with commercial or industrial, the predominant use of the lands in that area of those special classes of land shall be assessed at the corresponding levels of assessment. 6. Lands actually, directly and exclusively used for religious, charitable or educational purposes located in residential, commercial or industrial areas shall be assessed as residential, commercial or industrial, as the case may be. If those lands actually, directly and exclusively used for religious, charitable or educational purposes are, however, located in an area of mixed land uses, such as residential with commercial or industrial, the predominant use of the lands in that area shall govern the assessment of those lands used for religious, charitable or education purposes. Classification of Buildings/Structures Buildings shall be generally classified in accordance with the structural designs for which they were intended regardless of their actual use, such as residential, commercial, industrial, or farmhouse. The classification system shall embrace only such structure as are commonly found in the local government unit.