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Real Property Tax (RPT) is a tax that owners of real property need to
pay every year so that the local government unit (LGU) will not
auction off their property.
Buying tax delinquent properties is one of the many ways one can
buy properties at low prices.
In this post, I will discuss the legal bases for RPT and how to
compute it.
Real Property Tax is the tax on real property imposed by the Local
Government Unit (LGU). The legal basis is Title II of the Local
Government Code (LGC), Republic Act (R.A.) no. 7160. The
implementing rules and regulations of R. A. 7160 can be found here.
The RPT for any year shall accrue on the first day of January and
from that date it shall constitute a lien on the property which shall
Where to pay
When to pay
If you choose to pay for one whole year, the payment is due on or
before January 31. If the basic RPT and the additional tax accruing
to the Special Education Fund (SEF) are paid in advance, the
sanggunian concerned may grant a discount not exceeding twenty
percent (20%) of the annual tax due. Jay wrote about the discount
on RPT recently in his post How To Get A 20% Discount on Real
Property Taxes.
In case of failure to pay the basic RPT and other taxes when due,
the interest at the rate of two percent (2%) per month shall be
imposed on the unpaid amount, until fully paid. The maximum
number of months is thirty-six (36) months, so effectively, the
In addition to the basic RPT, the LGUʼs may levy and collect an
annual tax of one percent (1%) which shall accrued exclusively to
the Special Education Fund (SEF).
In addition to the basic RPT, the LGUʼs may collect a maximum idle
land tax is 5% assessed value of the property.
Sec. 199 (l) of the LGC defines “Fair Market Value” as the price at
which a property may be sold by a seller who is not compelled to
sell and bought by a buyer who is not compelled to buy. In practice,
I. Land
1. Residential
2. Agricultural
3. Commercial/Industrial
4. Timberland
II. Machineries
Sample Computation
Data:
Land – P350,000
Improvement – P350,000
Computation
1. Agricultural lands more than one (1) hectare in area, suitable for
cultivation, dairying, inland fishery, and other agricultural uses, ½ of
which remain uncultivated or unimproved.
Exceptions
ii. Lands used for grazing purposes (Note: put goats or cows
on your property).
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Aside from real property owners, I hope this also helps those
studying for the 2013 real estate brokers exam. Do you have any
questions, comments or reactions? Just let me know by leaving a
comment below, thanks!
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Cherry Vi M. Saldua-Castillo