by: Sharon Ann Bathan-San Pedro
What overseas Filipinos need to know about the Real Property Valuation and Assessment Reform Act (RPVARA)
UNDERSTANDING RA 12001
On June 13, 2024, President Marcos signed Republic Act No. 12001, commonly known as the Real Property Valuation and Assessment Reform Act (RPVARA). This landmark legislation aims to overhaul the outdated property valuation system in the Philippines. RA 12001 standardizes property valuations across the country, aligning them with current market values and international standards.
For overseas Filipinos, this means a more transparent and consistent property valuation system, making it easier to manage and invest in real estate back home.
Key changes introduced by RA 12001
The new law separates the technical valuation process from the political taxation process, establishing a single valuation base for taxation purposes. This simplification will alleviate the complexities overseas Filipinos face when dealing with property taxes and transactions, including:
• Transfer taxes
• Capital gains tax
• Withholding taxes
• Documentary stamp tax
• Value-added tax.
The importance of RA 12001
Local government units in the Philippines have historically relied on outdated valuation systems tied to real estate taxation. As of 2024, 97 cities and 40 provinces were not compliant with the requirement to revalue properties every three years. This non-compliance has led to a decrease in the share of real property tax in local tax revenues.
RA 12001 addresses several critical issues:
• Unified valuations: Eliminates multiple and overlapping valuations from different agencies, providing a clear property value.
• Transparency: Enhances transparency in the property market, boosting investor confidence.
• Automation: Accelerates the automation of the Real Property Information System, streamlining processes.
• Efficiency: Improves the efficiency of tax collection, benefiting both the government and property owners.
Implications for overseas Filipino property owners
With RA 12001 in place, many overseas Filipino property owners are concerned about potential increases in real property taxes and other implications. Here’s what you need to know:
• Property taxes: While the new valuation system aims for fairness and consistency, it may lead to adjustments in property taxes. However, the standardized approach will ensure these taxes reflect true market values.
• Investment confidence: The transparency and efficiency brought by RA 12001 are expected to enhance investor confidence, potentially increasing the value of real estate investments in the Philippines.
• Ease of transactions: Simplified taxation processes will make buying, selling, and managing properties more straightforward for overseas Filipinos.
RA 12001 represents a significant step forward in the Philippine property market. For overseas Filipinos, understanding these changes is crucial for making informed decisions about property investments and management back home. Stay informed and be proactive in adapting to these new regulations to maximize the benefits of your real estate investments in the Philippines.
SAB Realty: Your partner in real estate excellence
For more information and personalized assistance, contact SAB Realty. We’re here to help you navigate the evolving landscape of Philippine real estate with confidence.
* * *
The opinions, beliefs and viewpoints expressed by the author do not necessarily reflect the opinions, beliefs and viewpoints of Asian Journal, its management, editorial board and staff
* * *
Sharon Ann Bathan-San Pedro, a licensed real estate broker in the Philippines for 9 years, is also a member of NAR (National Association of Realtors in America). For inquiries, questions, or are interested in buying or selling a property, please feel free to reach out via email at [email protected] or call PH 0917-8237796 (Whatsapp and Viber) USA (909) 4131480 (Viber).
(Advertising Supplement)