Manual on Real Estate Appraisal and Assessment

BLGF – Draft of Local Assessment Manual (As of September 12, 2003) This is an Electronic Copy of BLGF documents. Please see “Terms of Use” and “Disclaimer from www.blgf.gov.ph

FOREWORD Pursuant to the provisions of Section 4, 3rd paragraph, of EO 127, the Department of Finance shall be responsible for the supervision of the revenue operations of all local government units. The Bureau of Local Government Finance, pursuant to Section 33 of the Revised Administrative Code of 1987, shall assist the Department of Finance in the formulation and implementation of policies over local government revenue administration and fund management. Likewise, BLGF shall exercise technical supervision over the assessment operations of all local governments. Sections 201 of the Local Government Code of 1991 and Article 291 of its Implementing Rules and Regulations (IRR) provide that the Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property. For this purpose, the Department of Finance (DOF) has constituted a Committee composed of the officials and staff of the Bureau of Local Government Finance (BLGF) and Provincial, City and Municipal Assessors to formulate a Manual on Real Property Appraisal and Assessment Operations, which shall serve as a guide for assessors all over the country. This Manual is issued to provide local assessment and treasury officials, local Sanggunians, the local Chief Executives, the local and national officials and others concerned with an integrated and updated reference in real property assessment administration. The Manual will serve as a valuable and effective guide for the Assessors in discharging their functions in accordance with the new concepts of property valuation and assessment envisioned under the Local Government Code of 1991. This Manual essentially covers the standard operations and procedures in the classification, appraisal and assessment of real property for compliance of all local assessors. It is presented in a modest manner to provide an easy flow of information pertaining to the statutory and administrative aspects of real property tax administration with the end in view of attaining fairness and equity in the distribution of tax burden. This Manual is divided into six Chapters, as follows: Chapter I Local Government Assessment Organization Chapter II Assessment Operations Chapter III Records Management Chapter IV Miscellaneous Provisions Chapter V Penal Provisions Chapter VI Repealing and Effectivity Clause Historical Background of Real Property Taxation in the Philippines During the encomienda system of the Spanish Era, there was no real property tax in the Philippines. Taxes on land were levied primarily on the male tenant of 16-60 years old as personal taxes or tributes rather than the real land taxes. They were paid generally in the form of agricultural products for the privilege to work on the land of the encomiendas. 1

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It was in 1901, during the American Regime that the real property taxation in the Philippines was formally instituted. In 1901, Act Nos. 82 and 83 of the Philippine Commission organized the municipal and provincial governments, respectively. These laws authorized the municipality and the province to levy taxes on real properties. These taxes became the primary source of locally-generated revenues. Likewise, Provincial and Municipal Board of Assessors were created under the same law in each province and municipality. The Municipal Board was charged with the assessing of real properties for taxation purposes while the Provincial Board was authorized to levy an annual tax on the real property assessed value. The said Act also charged the Provincial Treasurer of the supervision of the real property assessment and tax collection. Other laws affecting assessment and taxation of real property were enacted and were later compiled and incorporated in the Administrative Code of 1916 under the Jones Law. On December 5, 1932, Act No. 3995 “An Act Revising and Compiling the Assessment Laws” was passed, which in effect repealed, compiled and incorporated into a single Body all existing laws relating to the assessment and collection of real property taxes. Then in July 1939, the National Assembly passed Commonwealth Act No. 470 repealing Act No. 3995. CA No. 470 continued as the Assessment Law from 1940 until the birth of the new society in 1972 when His Excellency, President Ferdinand E. Marcos initiated reforms in real property tax administration under Presidential Decree (PD) Nos. 25 and 76. On May 20, 1974, PD No. 464 entitled “The Real Property Tax Code” was promulgated as the law governing the Real Property Tax Administration in the Philippines. The said law was designed to upgrade the assessment techniques, procedures and practices in the country. As provided under Section 8 of Batas Pambansa Blg. 337, dated February 10, 1983, the Real Property Tax Code (PD 464) was recognized under the Local Government Code of 1983. Accordingly, PD 464, as amended, continued to be the governing laws relative to the appraisal and assessment of real property for taxation purposes, as well as the levy, collection and administration of the real property tax until the year 1991 wherein Title II Book II of the Local Government Code (Republic Act No. 7160) has integrated the law on real property taxation and repealing PD 464 in the process. Significant changes in the legal framework, concepts and procedures embodied in the Local Government Code will be comprehensively discussed in this Manual. The Present Role of the Local Assessor The Local Assessor shall take charge of the discovery, classification, appraisal, assessment and valuation of all real properties within his territorial jurisdiction which shall be used as the basis for taxation. His duties include the preparation, installation and maintenance of a system of tax mapping and records management and the preparation of a Schedule of Fair Market Values of the different classes of real property within his territory.

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CHAPTER I LOCAL GOVERNMENT ASSESSMENT ORGANIZATION SECTION 1. - LOCAL ASSESSMENT PERSONNEL ADMINISTRATION I. Appointment of Provincial, City and Municipal Assessors A. Manner of Appointment – The Local Assessor shall be appointed by the Local Chief Executive concerned, subject to the Civil Service law, rules and regulations. All incumbent Assessors holding permanent appointment (appointed by the President or the Secretary of Finance) shall continue in Office without need of further appointment. The local chief executive may exercise his power to appoint the Assessor only when permanent vacancy occurs. B. Nature of Position - The appointment of an assessor shall be mandatory for all provincial, city and municipal governments C. Qualification Requirements - No person shall be appointed assessor unless he is a citizen of the Philippines, a resident of the local government unit concerned, of good moral character, a holder of a college degree preferably in civil or mechanical engineering, commerce or any other related course from a recognized college or university and a first grade civil service eligible or its equivalent. He must have acquired experience in real property assessment work or in any related field for at least five (5) years in the case of the city or provincial assessor, and three (3) years in the case of the municipal assessor. Experience in related field means actual work experience acquired from the Bureau of Local Government Finance and its Regional Offices, real property appraisal, treasury (Land Tax Division), shall be considered functional experience in the assessment service. Nobody shall be appointed or designated local Assessor if he does not possess the minimum requirements for appointment as provided in the LGC, otherwise, the appointment or designation shall be considered invalid or without effect.

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II.

Appointment of Assistant Assessor. A. Manner of Appointment – The Assistant Assessor may be appointed by the Local Chief Executive concerned, subject to the Civil Service law, rules and regulations. All incumbent Assistant Assessors holding permanent appointments shall continue in office without need of further appointment. The local chief executive shall exercise his power to appoint the assistant assessor only when a vacancy occurs. B. Nature of Position – The appointment of an assistant assessor shall be optional for provincial, city and municipal governments. C. Qualification Requirements – No person shall be appointed assistant assessor unless he is a citizen of the Philippines, a resident of the local government unit concerned, of good moral character, a holder of a college degree preferably in civil or mechanical engineering, commerce, or any related course from a recognized college or university, and a first grade civil service eligible or its equivalent. He must have acquired experience in assessment or in any related field for at least three (3) years in the case of the city or provincial assistant assessor, and one (1) year in the case of the municipal assistant assessor.

III.

Duties, Functions and Responsibilities of Local Assessors. A. Major Functions 1. Establish a systematic method of assessment in the manner prescribed herein and in accordance with the rules and regulations issued by the Secretary of Finance; 2. Install and maintain real property identification and accounting system conforming to the standards prescribed by the Secretary of Finance; 3. Prepare, install and maintain a system of tax mapping showing graphically all property subject to assessment in the province, city, or municipality within Metro Manila and gather all necessary data concerning the same; 4. Undertake a general revision of real property assessments within two (2) years after the effectivity of the Local Government Code and every three (3) years thereafter; 5. Make frequent physical surveys to check and determine whether all real property within the locality are properly listed in the assessment rolls;

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6. Appraise all items of real property at current market value in accordance with R. A. 7160 and conduct ocular inspections to determine if all properties are assessed properly; 7. Issue Tax Declaration/s covering newly discovered properties and transactions involving transfer of ownership, subdivision/segregation of land into two or more parcels, and/or consolidation of two or more parcels into a single ownership as well as other transactions involving assessment of real property; 8. Enforce uniformly the exemption from real property tax prescribed under Chapter II Section 14 hereof; 9. Apply the appropriate assessment levels prescribed by the Sanggunian concerned; 10. Keep a record of all transfers, leases and mortgages of real property, rentals, insurance and cost of construction of buildings and other improvements on land, and land income for assessment purposes; 11. In case of duplication of assessment on one property, appropriate cancellation shall be made. However, if any assessee or his representative shall object to the cancellation of the assessment made in his name, such assessment shall not be cancelled but the fact shall be noted on the tax declaration and assessment rolls and other property books of records. Preference, however, shall be given to the assessment of the person who has the best title to the property or, in default thereof, of the person who is in actual possession of the property; 12. Eliminate from the assessment roll of taxable property such properties which have been destroyed or have suffered a permanent loss of value by reason of storm, flood, fire or other calamity; or being exempt have been improperly included in the same; 13. Decrease the assessment where property previously assessed has suffered a substantial loss of value by reason of physical and economic obsolescence; and 14. Increase the assessment where improvements and repairs have been made upon the property subsequent to the last assessment.

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B. Other Functions of Local Assessors a. Declare the property in the name of the defaulting owner, if known, or against an unknown owner, as the case may be, and shall assess the property for taxation in accordance with the provisions of Title II, Book II of the Local Government Code, when any person, natural or juridical, by whom real property is required to be declared, refuses or fails for any reason to make such declaration within the time prescribed; b. Prepare and maintain an assessment roll wherein shall be listed all real property, whether taxable or exempt, located within the territorial jurisdiction of the local government unit concerned, except in cases where the assessors records are computerized and the same are directly and operationally connected to the Provincial or City or Municipal Treasurer in the form of LAN or local area networking; c. Submit to the treasurer of the local government unit, on or before the thirty-first (31st) of December each year the assessment roll containing a list of all persons whose real properties have been newly assessed or reassessed and the value of such properties, except in cases where the assessors records are computerized and the same are directly and operationally connected to the Provincial or City or Municipal Treasurer in the form of LAN or local area networking; d. For the purpose of obtaining information on which to base the market value of any real property, the assessor of the province, city or municipality or his deputy may summon the owners of the properties affected or persons having legal interest therein and their witnesses; administer oaths, and take deposition concerning the property, its ownership, amount, nature, and value; e. Recommend to the Sanggunian concerned amendments to correct errors and inequalities of valuation in the Schedule of Fair Market Values; f. The provincial, city, or municipal assessor shall within thirty (30) days give written notice of such new or revised assessment to the person in whose name the property is declared, when real property is assessed for the first time or when an existing assessment is increased or decreased; g. In case the provincial, city, or municipal assessor within Metropolitan Manila Area concurs in the decision of the Local Board of Assessment Appeals, it shall be his duty to notify the owner of the property or the person having legal interest therein of such fact using the form prescribed for the purpose. The owner of the property or the person having legal interest therein or the assessor who is not satisfied with the decision of the Board, may, within thirty (30) days after receipt of the decision of said Board, appeal to the Central Board of Assessment Appeals; 6

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h. The provincial, city or municipal assessor shall make and keep an updated record of all idle lands located within his jurisdiction. For purposes of collection, the provincial, city and municipal assessor shall furnish a copy thereof to the provincial, or city treasurer who shall notify, on the basis of such record, the owner of the property or person having legal interest therein of the imposition of the additional tax; i. The assessor concerned, upon the effectivity of the ordinance imposing special levy pursuant to Section 241 of R. A. 7160, shall forthwith proceed to determine the annual amount of special levy assessed against each parcel of land comprised within the area especially benefited by the public works or improvements to be undertaken and shall send to each landowner a written notice thereof by mail, personal service or publication in appropriate cases; j. The Provincial/City Assessor sits as Chairman of the Appraisal Committee except in Cities and Municipalities within Metropolitan Manila Area where the Assessor sits as member pursuant to E.O. 329 as amended; k. Whenever appointed by the Court, the Local Assessor shall act as Commissioner; l. Annotate in the tax declaration any encumbrance or adverse claims over the subject property; m. Attend personally or thru his duly authorized representative all sessions of the Local and Central Board of Assessment Appeals and present any information or record in his possession as may be required by the Board in determining the correct assessment of the real property under appeal; n. Issue upon request of owner or his authorized representative certificates pertaining to, or certified copies of, the assessment records of real property and all other records relative to its assessment, upon the presentation of the official receipt of payment of realty tax till the current year and upon payment of a service charge or fee fixed therefor by the Local Sanggunian concerned; and o. Exercise such other powers and perform such duties and functions as may be prescribed by law and ordinance.

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IV. Duties and Responsibilities of Assistant Provincial, City and Municipal Assessors The assistant assessor shall assist the assessor in performing the foregoing functions and perform such other duties as the latter may assign to him. All assignments or delegations of functions to the Assistant Assessors must be in writing.

SECTION 2. – SUPERVISION OVER LOCAL ASSESSORS

A. Technical Supervision of DOF thru BLGF: The Department of Finance shall be responsible for the supervision of the revenue operations of local government units, with the objective of making these entities less dependent on funding from the national government. The BLGF shall exercise technical supervision and coordination over the treasury and assessment operations of local governments, provide consultative services and technical assistance to the local governments and the general public on local taxation, real property assessments and other related matters and exercise line supervision over its Regional Offices and the Local Treasury and Assessment Services. “Technical Supervision” includes the promulgation of the necessary rules and regulations for the classification, appraisal, and assessment of real property, taxmapping, general revision of real property assessments and records management pursuant to the provisions of the Local Government Code. It includes also the submission of the necessary reports to the DOF thru BLGF to monitor compliance with existing law, rules and regulations. DOF, thru BLGF shall exercise the authority to examine and enforce compliance with the assessment laws, rules and regulations. For this purpose, the DOF shall, on continuing basis, issue guidelines, rulings and opinions on matters relating to the classification, appraisal and assessment of real property and other issues relative thereto for the strict compliance of the local assessors. B. Technical Supervision of provincial assessors over component City and Municipal Assessors: “Technical Supervision” includes the authority to review actions taken by a subordinate official to determine compliance with existing pertinent rules and regulations regarding the conduct of day-to-day operations of official or offices concerned. Provincial Assessor, therefore, may require the Municipal Assessors concerned to submit assessment reports and other assessment records or forms for his review and approval. 8

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SECTION 3. – DELEGATION OF FUNCTION BY PROVINCIAL ASSESSORS TO THE MUNICIPAL ASSESSORS From the provisions of Sections 200 and 232 of the Local Government Code, it is clear that the real property tax is, generally, a provincial imposition and, therefore, it is the province that is vested with the power to levy and administer the real property tax and not the municipality. However, for reason of being a part of the provincial government, it is the Office of the Provincial Assessor that shall perform such duties and function as may be essential to the administration of the real property tax. It is, therefore, the Provincial Assessors who have the authority to determine whether or not Municipal Assessors within his territorial jurisdiction may be authorized to approve tax declarations covering real properties within their respective municipalities. Municipal Assessor of a province shall perform all the duties and functions related to the classification, appraisal and assessment for taxation purposes of real property situated within the municipality under the direct and immediate supervision of the Provincial Assessor.

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SECTION 4. - ORGANIZATIONAL STRUCTURE As mandated under Section 472 (b)(12), of the Local Government Code, prescribed hereunder is a minimum/model organizational structure and staffing pattern for the Provincial/City/Municipal Assessor’s Office.

ORGANIZATIONAL CHART OFFICE OF THE PROVINCIAL ASSESSOR (Minimum) PROVINCIAL ASSESSOR * Optional

ASSESSMENT OPERATIONS EVALUATION UNIT

ASSISTANT PROVINCIAL ASSESSOR *

MUNICIPAL ASSESSORS

ADMINISTRATIVE AND ASSESSMENT RECORDS MANAGEMENT DIVISION

TAX MAPPING OPERATIONS DIVISION

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APPRAISAL STANDARDS AND EXAMINATION DIVISION

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ORGANIZATIONAL CHART OFFICE OF THE PROVINCIAL ASSESSOR (Recommended Maximum) **

PROVINCIAL ASSESSOR

ASSESSMENT OPERATIONS EVALUATION UNIT

ASSISTANT PROVINCIAL ASSESSOR FOR ADMINISTRATION *

ASSISTANT PROVINCIAL ASSESSOR FOR OPERATION *

MUNICIPAL ASSESSOR

ADMIN. DIVISION

IT DIVISION

ASSESSMENT RECORDS MANAGEMENT DIVISION

TAX MAPPING OPERATIONS DIVISION

PROPERTY VALUATION & EXAMINATION

ASSESSMENT STANDARD & EXAMINATION DIVISION

* Optional ** Recommendatory depending on the financial capability of the province concerned

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ORGANIZATIONAL CHART OFFICE OF THE CITY ASSESSOR (Minimum)

CITY ASSESSOR

ASSESSMENT OPERATIONS EVALUATION UNIT

ASST. CITY ASSESSOR *

ADMINISTRATIVE AND ASSESSMENT RECORDS MANAGEMENT DIVISION

TAX MAPPING OPERATIONS DIVISION

* Optional

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APPRAISAL AND ASSESSMENT DIVISION

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ORGANIZATIONAL CHART OFFICE OF THE CITY ASSESSOR (Recommended Maximum) **

CITY ASSESSOR

ASSESSMENT OPERATIONS EVALUATION UNIT

ASSISTANT CITY ASSESSOR FOR OPERATION

ASSISTANT CITY ASSESSOR FOR ADMINISTRATION

ADMIN. DIVISION

IT DIVISION

ASSESSMENT RECORDS MANAGEMENT DIVISION

TAX MAPPING OPERATIONS DIVISION

APPRAISAL DIVISION

ASSESSMENT STANDARD & EXAMINATION DIVISION

* Optional ** Recommendatory depending on the financial capability of the city concerned

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ORGANIZATIONAL CHART OFFICE OF THE MUNICIPAL ASSESSOR (Minimum)

MUNICIPAL ASSESSOR

ASST. MUNICIPAL ASSESSOR *

ADMINISTRATIVE & ASSESSMENT RECORDS MANAGEMENT UNIT

TAX MAPPING * Optional OPERATIONS UNIT

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APPRAISAL AND ASSESSMENT UNIT

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ORGANIZATIONAL CHART OFFICE OF THE MUNICIPAL ASSESSOR (Recommended Maximum) **

MUNICIPAL ASSESSOR

ASST. MUNICIPAL ASSESSOR *

ADMINISTRATIVE AND ASSESSMENT RECORDS MANAGEMENT

IT

TAX MAPPING OPERATIONS DIVISION

DIVISION

APPRAISAL & ASSESSMENT DIVISION

* Optional ** Recommendatory depending on the financial capability of the municipality concerned

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Staffing Pattern OFFICE OF THE PROVINCIAL ASSESSOR (Minimum) No. of Position 1 1 2 -------

Provincial Assessor (Mandatory) Assistant Provincial Assessor (Optional) A. Assessment Operations Evaluation Unit Assessment Evaluation Officer I, G - 11 Assistant Statistician, G – 8 Clerk, G - 4

1 * 1 -------

B. Administrative and Assessment Records Management Division Assessment Records Officer III, G – 15 Assessment Records Officer I, G – 11 Assessment Clerk III, G – 9 Data Encoder II, G –8 Clerk III, G – 6 Assessment Clerk I, G –4 Storekeeper I, G – 4 Clerk I, G –3 Reproduction Machine Operator I, G – 2 Book Binder I, G –2 Driver I, G – 3

1 * 1 * 1 1 1 1 * 1 * -------

C. Assessment Standard and Examination Division Property Appraiser II, G –15 Property Appraiser I, G – 11 Assessment Clerk II, G –6 Assessment Clerk I, G – 4 D. Tax Mapping Operations Division Tax Mapper II, G –15 Information Systems Analyst I, G – 12 Tax Mapper I, G –11 Blueprint Machine Operator Draftsman, G – 6 Tax Mapping Aide, G – 4 Book Binder, G –2

1 1 1 1 -------

2

7

4

1 * 1 * 1 * * 3 ------- -----18

Total

* Optional

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Staffing Pattern OFFICE OF THE PROVINCIAL ASSESSOR (Recommended Maximum) ** No. of Position

Provincial Assessor (Mandatory) Assistant Provincial Assessor (Optional)*

1 2 -------

A. Assessment Operations Evaluation Unit Assessment Evaluation Officer IV, G – 22 Assessment Evaluation Officer I, G – 11 Data Entry Machine Operator II, G – 8 Assistant Statistician, G – 8 Assessment Clerk II, G - 6

B. Administrative Division Administrative Officer IV, G – 22 Administrative Officer I, G – 11 Data Entry Machine Operator II, G – 8 Storekeeper II, G – 6 Clerk III, G – 6 Clerk II, G –4 Clerk I, G –3 Messenger, G – 2 Reproduction Machine Operator, G – 2 Driver I, G – 3

1 4 1 1 1 -------

1 1 1 1 2 2 1 1 1 1 -------

C. Assessment Records Management Division Assessment Records Officer IV, G – 22 Assessment Records Officer III, G – 18 Assessment Records Officer II, G – 15 Assessment Records Officer I, G – 11 Data Entry Machine Operator II, G –8 Assessment Clerk III, G – 8 Assessment Clerk II, G –6 Assessment Clerk I, G-4 Book Binder, G – 2 Reproduction Machine Operator, G – 2

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1 1 1 2 2 1 2 2 1 1 -------

3

8

12

14

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D. Tax Mapping Operations Division Tax Mapper IV, G –22 Information Technology Officer I, G -19 Tax Mapper III, G –18 Tax Mapper II, G – 15 Tax Mapper I, G - 11 Data Entry Machine Operator II, G – 8 Blueprint Machine Operator, G – 7 Draftsman I, G – 6 Tax Mapping Aide, G – 4 Book Binder, G –2

1 1 1 1 2 1 1 2 2 1 -------

E. Property Valuation and Examination Division Property Appraiser IV, G –22 Property Appraiser III, G –18 Property Appraiser II, G –15 Property Appraiser I, G –11 Assessment Clerk III, G – 9 Data Entry Machine Operator II, G –8 Assessment Examiner II, G – 6 Assessment Examiner I, G – 4

F. Assessment Standards and Examination Division Assessment Examiner IV, G – 22 Assessment Examiner III, G – 18 Assessment Examiner II, G – 15 Assessment Examiner I, G – 11 Assessment Clerk III, G –9 Data Entry Machine Operator II, G –8 Assessment Clerk II, G – 6 Assessment Clerk I, G -4

1 1 1 3 1 1 2 2 -------

1 1 1 2 1 1 1 2 -------

13

11

10 -------

G. Information Technology Division Programmer V Total

72

** Recommendatory depending on the financial capability of the Province Concerned

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Staffing Pattern OFFICE OF THE CITY ASSESSOR (Minimum)

No. of Position City Assessor (Mandatory) Assistant City Assessor (Optional)

1 1 -------

A. Assessment Operations Evaluation Unit Assessment Evaluation Officer I, G - 11 Assistant Statistician, G – 8 Clerk, G - 4

1 * 1 -------

B. Administrative and Assessment Records Management Division Assessment Records Officer II, G – 14 Assessment Records Officer I, G – 11 Data Entry Machine Operator II, G – 8 Assessment Clerk II, G – 6 Clerk III, G – 6 Assessment Clerk I, G –4 Storekeeper I, G – 4 Clerk I, G – 3 Messenger, G – 2 Reproduction Machine Operator, G – 2 Book Binder, G –2 Driver I, G – 3

1 * * 1 1 1 1 1 1 * * * -------

C. Tax Mapping Operations Division Tax Mapper II, G –15 Tax Mapper I, G –11 Data Entry Machine Operator II, G – 8 Blueprint Machine Operator, G – 7 Draftsman I, G – 6 Tax Mapping Aide, G – 4 Book Binder, G –2

1 1 * * 1 1 * -------

D. Appraisal and Assessment Division Property Appraiser II, G – 15 Property Appraiser I, G – 11

1 1 19

2

2

7

4

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Assessment Clerk III, G – 9 Data Entry Machine Operator II, G – 8 Assessment Clerk III, G – 6 Assessment Clerk II, G – 4

1 * * 1 4 -------- ------19

Total

*Optional

Staffing Pattern OFFICE OF THE CITY ASSESSOR (Recommended Maximum) *

No. of Position City Assessor (Mandatory) Assistant City Assessor (Optional)

1 2 -------

A. Assessment Operations Evaluation Unit Assessment Evaluation Officer IV, G – 22 Assessment Evaluation Officer I, G - 11 Data Entry Machine Operator II, G – 8 Assistance Statistician, G – 8 Assessment Clerk II, G - 6

B. Administrative Division Administrative Officer IV, G – 22 Administrative Officer I, G – 11 Data Entry Machine Operator II, G –8 Storekeeper I, G – 6 Clerk III, G – 6 Clerk II, G –4 Clerk I, G –3 Messenger, G –2 Reproduction Machine Operator, G – 2 Driver I, G – 3

1 4 1 1 1 -------

1 1 1 1 1 1 1 1 1 1 -------

C. Assessment Records Management Division Assessment Records Officer IV, G – 22 Assessment Records Officer III, G – 18 20

1 1

3

8

10

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Assessment Records Officer II, G –15 Assessment Records Officer I, G – 11 Data Entry Machine Operator II, G –8 Assessment Clerk II, G – 6 Assessment Clerk I, G –4 Book Binder, G – 2

1 1 1 2 2 1 -------

D. Tax Mapping Operations Division Tax Mapper IV, G –22 Information Technology Officer I, G – 19 Tax Mapper III, G –18 Tax Mapper II, G – 15 Tax Mapper I, G – 11 Data Entry Machine Operator II, G – 8 Blueprint Machine Operator, G – 7 Draftsman, G – 6 Tax Mapping Aide, G – 4 Book Binder, G –2 E. Property Appraisable Division Property Appraiser IV, G – 22 Property Appraiser III, G – 18 Property Appraiser II, G – 15 Property Appraiser I, G – 11 Assessment Clerk III, G – 9 Data Entry Machine Operator II, G – 8 Assessment Clerk II, G – 6 Assessment Clerk I, G – 4

1 1 1 1 2 1 1 1 2 1 ------1 1 1 4 1 1 1 2 -------

F. Assessment Standards and Examination Division Assessment Examiner IV, G – 22 Assessment Examiner III, G – 18 Assessment Examiner II, G – 15 Assessment Examiner I, G – 11 Assessment Clerk III, G – 9 Data Entry Machine Operator II, G – 8 Assessment Clerk II, G – 6 Assessment Clerk I, G – 4 Total

11

12

12

1 1 1 4 1 1 1 2 12 ------- ------68

** Recommendatory depending on the financial capability of the City Concerned

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Staffing Pattern OFFICE OF THE MUNICIPAL ASSESSOR (Minimum)

No. of Position Municipal Assessor (Mandatory) Assistant Municipal Assessor (Optional) Tax Mapper I, G – 11 Real Property Appraiser I, G – 11 Assessment Clerk III, G – 9 Assessment Clerk II, G – 6 Draftsman I, G – 6 Assessment Clerk I, G – 4 Tax Mapping Aide, G – 4

1 1 * 1 * * * 1 1 -----5

Total

*Optional Staffing Pattern OFFICE OF THE MUNICIPAL ASSESSOR (Recommended Maximum) *

No. of Position Municipal Assessor (Mandatory) Assistant Municipal Assessor (Optional)

1 1 -------

A. Administrative and Assessment Record Division Assessment Records Officer III, G - 18 Assessment Records Officer II, G - 15 Assessment Records Officer I, G –11 Assessment Clerk III, G – 9 Data Entry Machine Operator II, G – 8 Assessment Clerk II, G – 6 Assessment Clerk I, G – 4 Reproduction Machine Operator, G – 2 Driver I, G – 3 Book Binder, G – 2 Messenger, G – 2

22

1 1 1 1 1 1 2 1 1 1 1 -------

2

12

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B. Tax Mapping Operations Division Tax Mapper III, G – 18 Tax Mapper II, G – 15 Tax Mapper I, G – 11 Data Entry Machine Operator II, G – 8 Drafsman, G – 6 Assessment Clerk I, G – 4 Tax Mapping Aide, G – 4

1 1 2 1 1 1 1 -------

C. Appraisal and Assessment Division Property Appraiser III, G – 18 Property Appraiser II, G – 15 Property Appraiser I, G – 11 Assessment Clerk III, G – 9 Data Entry Machine Operator II, G – 8 Assessment Clerk II, G – 6 Assessment Clerk, G – 4

8

1 1 2 1 1 1 2 9 ------- ------31

Total

SECTION 5. - COORDINATION AND LINKAGES OF LOCAL ASSESSORS WITH OTHER LOCAL OFFICIALS AND NATIONAL GOVERNMENT AGENCIES It is inherent upon the Local Assessor to maintain close coordination and cooperation with the following officials/offices in the performance of their duties and functions. The local assessors whenever necessary may request from these agencies assistance/information/data/documents needed in the performance of duties. A. Offices of the Local Treasurers a) On the Assessment Roll A copy of the Assessment Roll should be furnished the Local Treasurers’ Offices as basis for the collection of real property taxes and updating of the Real Property Tax Register (RPTAR)/Real Property Tax Index Card (RPTIC), except in cases where the assessors’ records are computerized and the same are directly and operationally connected to the Provincial, City, or Municipal Treasurer in the form of LAN or local area networking, in which case the assessment roll is readily available to the Treasurer concerned.

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b) Conduct of the RPTA-Information and Education Campaign (IEC) Program Both the Local Assessor and Treasurer shall act as communication agent of the RPTA-IEC Program. c) On the implementation of RPTA Project Both shall be members of the RPTA Task Force charge with the implementation of the RPTA Project. d) On the application of remedies for the collection of real property tax Before the treasurer can initiate the steps leading to public auction of delinquent real property or civil action through courts, the assessor should provide the correct information concerning the ownership and assessed value of the property in question. e) On Records Keeping The two Offices must also coordinate in the aspect of record management. Both of them should use the same coding system in recording to avoid confusion in tracking down taxable property. If the Assessor’s Office uses numeric codes, like the Property Identification Number (PIN) and the Tax Declaration Number (TDN), the Treasurer’s Office should also do so to avoid problems when one uses a code different from the other.

B. Office of the Registrar of Deeds To ascertain whether or not any real property entered in the Registry of Property has escaped discovery and listing for the purpose of taxation, secure every year from the Registrar of Deeds, an abstract of his registry, which shall include brief but sufficient description of the real properties entered therein, their present owners, and the dates of their most recent transfer or alienation accompanied by copies of corresponding deeds of sale, donation, or partition, or other forms of alienation. C. Official Issuing Building Permit or Certificate of Registration of Machinery Secure from any public official or employee who may now or hereafter be required by law or regulation to issue to any person a permit for the construction, addition, repair, or renovation of a building, or permanent improvement on land, or a certificate of registration for any machinery, 24

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including machines, mechanical contrivances, and apparatus attached or affixed on land or to another real property, a copy of such permit or certificate within thirty (30) days of its issuance. D. Geodetic Engineers Secure from Geodetic Engineers, public or private, to furnish free of charge a white or blue print copy of each of all approved original or subdivision plans or maps of surveys executed by them within thirty (30) days from receipt of such plans from the Lands Management Bureau, the Land Registration Authority, or the Housing and Land Use Regulatory Board, as the case may be. E. Registrar of Deeds and Notaries Public Secure from the Registrar of Deeds and Notaries Public copies of all contracts, selling, transferring, or otherwise conveying, leasing, or mortgaging real property received by, or acknowledged before them. F. Department of Agrarian Reform (DAR) Secure from DAR data of Operation Land Transfer (OLT) in pursuance of the Comprehensive Agrarian Reform Program (CARP), such as name of barangay, urban code, list of landowners together with the name of tenant-beneficiaries. G. Department of Environment and Natural Resources (DENR) Secure from the DENR, the following: a) Complete listing of provinces, cities, municipalities, barangays and city districts cadastrally surveyed, including parcellary maps of properties under OLT and such other data or documents in the possession or custody of the Bureau of Lands; b) Copies of controlled/semi-controlled survey maps; c) Subdivision Plan approved by the Land Management Bureau (LMB); d) Survey plan of Geodetic Engineer approved by the LMB; and e) Certification as to alienable and disposable land area H. Housing and Land Use Regulatory Board (HLURB) Copy of comprehensive land use plan and supporting documents.

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I. Bureau of Internal Revenue (BIR) 1. 2. 3. 4. 5.

Updated Schedule of Approved Zonal Valuation List of Branches and Warehouses Annual List of Income Tax Filers Quarterly List of Capital Gains Tax Filers Quarterly Lists of Bank Taxpayers

J. Bangko Sentral ng Pilipinas (BSP) – Foreign Currency Conversion Rates for purposes of computing the acquisition cost of machinery K. Securities and Exchange Commission (SEC) 1. Articles of Incorporation, By-laws 2. Statement of Assets and Liabilities L. Board of Investment/Department of Trade and Industry (BOI/DTI) – Price index for purposes of computing the market value of machinery M. Land Bank of the Philippines (LBP) – Certificate of full payment of CLOAs/emancipation patents N. Bureau of Customs (BOC) 1. 2. 3. 4.

Bills of lading Letter of Credit Official Receipt Purchase Invoice

O. Philippine Economic Zone Authority (PEZA) – List of real properties/enterprises covered by/within the zone P. Bases Conversion and Development Authority (BCDA) – List of real properties affected by bases conversion Q. Cooperative Development Authority (CDA) – List of duly registered cooperatives R. Department of Agriculture (DA) – Copy of the short and medium term irrigation infrastructure development plan S. National Commission on Indigenous People (NCIP) 1. Information on Land Ownership 2. Information on Ancestral Domain 3. Certificate of Land Ownership (CLOA)

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CHAPTER II STANDARD OPERATIONS IN REAL PROPERTY ASSESSMENT SECTION 1. - GUIDING PRINCIPLES The classification, appraisal and assessment of real property for taxation purposes shall be governed by the provisions of RA No.7160 and its implementing rules and regulations and other pertinent laws, with the view of attaining methodical, efficient and consistent compliance thereof and achieve equity in the distribution of tax burden and shall be guided by the following fundamental and guiding principles: 1. Real property shall be appraised at its current and fair market value based on the duly approved schedule of market values; 2. Real property shall be classified for assessment purposes on the basis of its actual use; 3. Real property shall be assessed on the basis of a uniform classification within each local government unit; 4. The appraisal, assessment, levy, and collection of real property tax shall not be let to any private person; and 5. The appraisal and assessment of real property shall be equitable. 6. Assessment Levels – The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the Sangguniang Panlalawigan, Sangguniang Panlungsod or Sangguniang Bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following: (a) On lands: CLASS Residential Agricultural Commercial Industrial Mineral Timberland

ASSESSMENT LEVELS 20% 40% 50% 50% 50% 20%

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(b) On Building and Other Structures (1) Residential Fair Market Value OVER 175,000.00 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00 5,000,000.00 10,000,000.00

Not Over P 175,000.00 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00 5,000,000.00 10,000,000.00

Assessment Levels

Not Over P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00

Assessment Levels 25% 30% 35% 40% 45% 50%

Not Over P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00 5,000,000.00 10,000,000.00

Assessment Levels 30% 35% 40% 50% 60% 70% 75% 80%

0% 10% 20% 25% 30% 35% 40% 50% 60%

(2) Agricultural Fair Market Value OVER P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00

(3) Commercial/Industrial Fair Market Value OVER P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00 5,000,000.00 10,000,000.00

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(4) Timberland Fair Market Value OVER P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00

Not Over P 300,000.00 500,000.00 750,000.00 1,000,000.00 2,000,000.00

Assessment Levels 45% 50% 55% 60% 65% 70%

(c) On Machineries; CLASS Agricultural Residential Commercial Industrial

ASSESSMENT LEVELS 40% 50% 80% 80%

(d) On Special Classes: The assessment levels for all lands, buildings, machineries and other improvements; ACTUAL USE Cultural Scientific Hospital Local water districts Government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power

ASSESSMENT LEVEL 15% 15% 15% 10%

10% 7. Date of Effectivity of Assessment or Reassessment – All assessments or reassessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year: Provided, however, That the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or any other abnormal cause, shall be made within ninety (90) days from the date any such cause or causes occurred, and shall take effect at the beginning of the quarter next following the reassessment. 8

Assessment of Property Subject to Back Taxes – Real property declared for the first time shall be assessed for the period during which it would have 29

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been liable but in no case for more than ten (10) years prior to the date of initial assessment: Provided, however, that taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period. Provided further that the total tax liability is eleven (11) years including the year the assessment is made. If such taxes are paid on or before the end of the quarter next following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two (2%) per month or a fraction thereof until such taxes are fully paid but not to exceed thirty-six (36) months. 9. Notification of New or Revised Assessment – When real property is assessed for the first time or when an existing assessment is increased or decreased, the provincial, city or municipal assessor shall within thirty (30) days give written notice of such new or revised assessment to the person in whose name the property is declared. The notice may be delivered personally or by registered mail or through the assistance of the punong barangay to the last known address of the person to be served. 10. Effect of Appeal on the Payment of Real Property tax – Appeal on assessments of real property made under the provisions of the Local Government Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal. SECTION 2. - DEFINITION OF TERMS All terms defined under Section 199 of R. A. 7160 shall be controlling, and those that may be incorporated in an Ordinance not otherwise inconsistent with the provisions of laws. (a)

Acquisition Cost – for newly acquired machinery not yet depreciated and appraised within the year of its purchase, refers to the actual cost of the machinery to its present owner plus the cost of transportation, handling, and installation at the present site;

(b)

Actual Use – refers to the purpose for which the property is principally or predominantly utilized by the owner or the person in possession thereof;

(c)

Ad Valorem Tax – is a levy on real property determined on the basis of a fixed proportion of the value of the property;

(d)

Agricultural Land – is land devoted principally to the planting of trees, raising of crops, livestock and poultry, dairying, salt making, inland fishing and similar aquacultural activities, and other agricultural activities, and is not classified as mineral, timber, residential, commercial or industrial land; 30

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(e)

Appraisal – is the act or process of determining the value of property as of a specific date for a specific purpose;

(f)

Assessment – is the act or process of determining the value of a property, or proportion thereof subject to tax, including the discovery, listing, classification, and appraisal of properties;

(g)

Assessment Level – is the percentage applied to the fair market value to determine the taxable value of the property;

(h)

Assessed Value – is the fair market value of the real property multiplied by the assessment level. It is synonymous to taxable value;

(i)

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.” And this is true, whether the building is built on one’s 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)

(j)

Commercial Property – is property devoted principally for the object of profit and is not classified as agricultural, industrial, mineral, timber, or residential property;

(k)

Cooperative – is a duly registered association of persons with a common bond of interest, who have voluntarily joined together to achieve a lawful common or social economic end, making equitable contributions to the capital required and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. (R.A. No. 6938)

(l)

Depreciated Value – is the value remaining after deducting depreciation from the acquisition cost;

(m)

Economic Life – is the estimated period over which it is anticipated that a machinery or equipment may be profitably utilized;

(n)

Fair Market Value – is 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;

(o)

Improvement – is a valuable addition made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of

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parts involving capital expenditures and labor, which is intended to enhance its value, beauty or utility or to adapt it for new or further purposes; (p)

Industrial Land – is land devoted principally to industrial activity as capital investment and is not classified as agricultural, commercial, timber, mineral, or residential land;

(q)

Machinery – embraces machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily to the real property. It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes, without which such industry or facility cannot function. Machinery shall in no case include constructions or structures which basically falls within the definition of Building under Section 2 (i) hereof;

(r)

Mineral Lands – are lands in which minerals, metallic or non-metallic, exist in sufficient quantity or grade to justify the necessary expenditures to extract and utilize such materials;

(s)

Reassessment – is the assigning of new assessed values to property, particularly real estate, as the result of a general, partial, or individual reappraisal of the property;

(t)

Remaining Economic Life – is the period of time expressed in years from the date of appraisal to the date when the machinery becomes valueless;

(u)

Remaining Value – is the value corresponding to the remaining useful life of the machinery;

(v)

Replacement or Reproduction Cost – is the cost that would be incurred on the basis of current prices, in acquiring an equally desirable substitute property or the cost of reproducing a new replica of the property on the basis of current prices with the same or closely similar materials; and

(w)

Residential Land – is land principally devoted to habitation. (Sec. 199, R.A. No. 7160)

(x)

Special Classes of Real Property – All lands, buildings and other improvements thereon actually, directly and exclusively used for hospitals, cultural, or scientific purposes, and those owned and used by local water districts, and government owned or controlled corporations rendering 32

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essential public services in the supply and distribution of water and/or generation and transmission of electric power shall be classified as special. (y)

Residential Machinery - are those machines, equipment, appliances or apparatus permanently attached to residential land and/or buildings.

Other Classifications of land not otherwise enumerated under RA No. 7160 but assessable are also defined as follows: 1.

Timberland – land identified as forest or reserved area by the government, which may or may not be granted to a concessionaire, licensee, lessee or permittee.

2. Memorial Parks – Lands exclusively used as burial ground, the disposition of which is for commercial purpose or for profit, and considered as wasting assets. 3. Horticultural Land – Land devoted to or cultivated for the planting of flowers and other ornamental plants. 4. Marsh Land – A tract of low-lying land usually under water. 5. Foreshore Land – A strip of land along the seashore, the use of which may or may not be granted by the government to private person or corporation. 6. Mangrove Land – is a term applied to the type of forest occurring on tidal flat along the seacoast, extending along stream where the water is brackish. (P.D. 705) 7. Orchard – land specifically devoted to various fruit bearing trees and plants.

SECTION 3. - REAL PROPERTY IDENTIFICATION SYSTEM Property Identification Numbering System (PINS) shall be used to account for the separate parcels of land, by ownership. The numbering system is unique, meaning, when it is properly applied, no two parcels of land in the Philippines will have exactly the same property identification number. Or to restate, every separate parcel of land in the country shall have a property identification number different from any other parcel. The installation of property identification shall be made in accordance with the following guidelines: 1 Province Index Number - The first three (3) digits (1st, 2nd and 3rd) in the Property Identification Number (PIN) shall be used to identify the Province, City and Municipality of Metropolitan Manila Area. For this purpose, each 33

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province, city and municipality of Metro Manila Area, is hereby assigned with a specific Index Number indicated as follows:

Province

Province Index Number

Batanes Cagayan Ilocos Norte Abra Kalinga-Apayao Mountain Province Ilocos Sur La Union Benguet Ifugao Isabela Nueva Vizcaya Pangasinan Nueva Ecija Quezon Zambales Tarlac Bataan Pampanga Bulacan Rizal Cavite Laguna Batangas Camarines Norte Camarines Sur Catanduanes Occidental Mindoro Oriental Mindoro Marinduque AlbaySorsogon Romblon Masbate Northern Samar Western Samar Eastern Samar Aklan Capiz Antique Iloilo

-001 -002 -003 -004 -005 -006 -007 -008 -009 -010 -011 -012 -013 -014 -015 -016 -017 -018 -019 -020 -021 -022 -023 -024 -025 -026 -027 -028 -029 -030 -031 -032 -033 -034 -035 -036 -037 -038 -039 -040 -041 34

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Negros Occidental Cebu Leyte Southern Leyte Negros Oriental Bohol Surigao del Norte Camiguin Zamboanga del Norte Misamis Occidental Misamis Oriental Agusan del Norte Agusan del Sur Surigao del Sur Zamboanga del Sur Lanao del Norte Lanao del Sur Bukidnon North Cotabato South Cotabato Davao del Sur Davao del Norte Davao Oriental Sulu Palawan Quirino Siquijor Tawi-Tawi Maguindanao Sultan Kudarat Basilan Aurora Biliran Guimaras Sarangani Apayao Kalinga Compostela Valley Zamboanga Sibugay

-042 -043 -044 -045 -046 -047 -048 -049 -050 -051 -052 -053 -054 -055 -056 -057 -058 -059 -060 -061 -062 -063 -064 -065 -066 -067 -068 -069 -070 -071 -072 -073 -074 -075 -076 -077 -078 -079 -080

City Index Number

City Laoag Baguio Dagupan

-101 -102 -103 35

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San Carlos (Pang.) San Jose Palayan Cabanatuan Angeles

-104 -105 -106 -107 -108 City/Metro Manila Mun. Index Number

City/Metro Manila Municipalities Olongapo Navotas Malabon Valenzuela Caloocan Quezon Marikina San Juan Manila Mandaluyong Pasig Taguig Pateros Makati Pasay Parañaque Las Piñas Muntinlupa Cavite Trece Martires Tagaytay San Pablo Lipa Batangas Lucena Puerto Princesa Naga Iriga Legazpi Roxas Iloilo Cadiz Silay San Carlos (Negros. Occ.) Bacolod Bago La Carlota

-109 -110 -111 -112 -113 -114 -115 -116 -117 -118 -119 -120 -121 -122 -123 -124 -125 -126 -127 -128 -129 -130 -131 -132 -133 -134 -135 -136 -137 -138 -139 -140 -141 -142 -143 -144 -145 36

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Canlaon Bais Dumaguete Toledo Danao Mandaue Cebu Lapu-Lapu Tagbilaran Ormoc Tacloban Calbayog Dapitan Pagadian Zamboanga Surigao Butuan Gingoog Cagayan de Oro Dipolog Oroquieta Ozamiz Tangub Iligan Cotabato Marawi Davao General Santos Sagay Santiago Kabankalan Antipolo Talisay Samal Tagum Kidapawan Tuguegarao Passi Victorias Tacurong Bislig Koronadal Calapan Sorsogon Digos Gapan Calamba

-146 -147 -148 -149 -150 -151 -152 -153 -154 -155 -156 -157 -158 -159 -160 -161 -162 -163 -164 -165 -166 -167 -168 -169 -170 -171 -172 -173 -174 -175 -176 -177 -178 -179 -180 -181 -182 -183 -184 -185 -186 -187 -188 -189 -190 -191 -192 37

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San Jose del Monte Tanauan Panabo San Fernando (La Union) Urdaneta Vigan Candon Alaminos Himamaylan Escalante Science City of Munos Balanga (Bataan) San Fernando (Pampanga) Tarlac Ligao Tabaco Masbate Maasin Valencia Sipalay Isabela (Basilan) Cauayan Malaybalay Malolos Tanjay Bayawan Talisay

-193 -194 -195 -196 -197 -198 -199 -200 -201 -202 -203 -204 -205 -206 -207 -208 -209 -210 -211 -212 -213 -214 -215 -216 -217 -218 -219

2. Municipal Index Number or City District Index Number. - Following the three digits which identify the province, city and municipality of Metro Manila Area are two (2) digits (4th and 5th) which identify the municipality in the province or district in the City. (a) Municipal Index Number - The municipalities in the province shall be numbered consecutively beginning with "01" for the first municipality, after all the municipalities are arranged alphabetically. (See Fig. 2, for a typical Municipal Index Map). (b) City District Index Number - The City Districts shall be numbered beginning with "01" in the northwesterly most district, thence in an easterly direction, thence southward to the next district, thence westerly direction, thence southward and then repeat in an easterly direction until al the districts within the city are assigned with index numbers. (See Fig. 3 for a typical City District Index Map).

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3. Barangay Index Number - The next four (4) digits (6th, 7th, 8th and 9th) in the Property Identification Number shall be used to identify the barangay. Barangays are numbered beginning with "0001" for the Poblacion and continuing serially through all barangays on an alphabetical basis, by municipality. (See Figures 4 and 4-A, for a typical Barangay Index Map). In cases where the poblacion consists of two or more barangays that were designated numerically such as Poblacion I, Poblacion II, etc., the barangays shall be numbered in like manner, i.e., 0001 for poblacion I, 0002 for poblacion II, etc. However, if the barangays are designated by name as Poblacion Centro, Poblacion West, etc., the barangays shall be numbered beginning with 0001 for barangay, preferably, where the municipal building is located, followed serially through barangays in an alphabetical order. In cases where there is no barangay poblacion, the barangays shall be numbered consecutively beginning with "0001" for the first barangay after all the barangays are arranged alphabetically. 4. Fundamental Component of PIN. – The combination of the Index Number’s of the Province/City/Municipality of MMA, Municipal/District, barangay, constitutes the fundamental components (first nine digits) of a Property Identification Number. Illustrations: (a) For parcel located in a Province: 000 Province

00 Municipality

0000 Barangay

(b) For parcel located in a City: 000 City

00 District

0000 Barangay

(c) For parcel located in a municipality of MMA: 000 Mun.

00 District

0000 Barangay

5. Section Index Number. - Following the nine digits, which are the fundamental components of the property identification number, are three (3) digits (10th, 11th and 12th) which shall be used to identify the section. Sections shall be numbered in conformity with the layout under Sec. 30 hereof beginning with "001" in the north westernmost section, thence on an easterly direction, thence southward, thence on a westerly direction, thence southward and then repeat on an easterly 39

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direction, or stated differently, in an inverted "S" pattern, until all the sections within the barangay are assigned index numbers. 6. Permanent Parcel Number. - Following the twelve digits in the property identification number, the two (2) digits (13th and 14th) shall be assigned to identify each separate parcel of land. A parcel of land for the purpose of this Manual is a plot or an area of land, having established limits, that is practicable to be assessed as one parcel of land and likewise numbered, in an inverted “S” pattern. 7. Permanent Property Identification Number (PIN). - With the inscription of the permanent parcel (lot) number on the tax map all needed information are available to identify and describe all real property in the mapped area. The numbering system is now ready to bridge the gap between the real property in the field and office assessment records. This is called the property identification numbering system. The final and permanent property identification number assigned to a parcel of land in the tax map shall consist of the following sequence: The 1st, 2nd and 3rd digits represent the Province/City/Municipality of MMA Index Number; the 4th and 5th represent the Municipal/District Index Number; the 6th, 7th, 8th and 9th digits represent the Barangay Index Number; the 10th, 11th and 12th digits represent the Section Index Number; and finally the 13th and 14th digits represent the permanent parcel number. Thus the complete number sequence of a PIN is illustrated as follows: 000 Prov/City/Mun.

00 Mun./Dist.

0000 Bgy

000 Sec.

00 Parcel

Example: (1) The PIN of Lot (05) of Section (002) of Barangay (0005) at Municipality (15) in the Province of (020) is: 020-15-0005-002-05 (2) The PIN of Lot (35) of Section (001) of Barangay (0012), District of (06) in City (132) is: 132-06-0012-001-35 8. PIN of Building. – A building which shall be separately assessed from the land, should bear the PIN of the land with a four(4)-digit number (1001) added to it. In the case of a condominium building, the permanent PIN of the condominium unit should bear the PIN of the condominium building with a three(3)-digit number (001) added to it. 9 PIN of Machinery. – A machinery which shall be separately assessed from the land or building, should bear the PIN of the land with a four (4) digit number beginning with 2001 added to it. 40

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10 PIN of Building or Machinery Separately Assessed from Land. - In case of a building constructed in a parcel of land whether owned by the landowner or any person other than the landowner, the permanent PIN of said building will bear the same PIN of the land with a four(4)-digit number beginning from "1001" added to it followed by 1002; 1003, etc. for additional buildings constructed on the same land; for example: 020-15-0005-002-05-1001 for the first building; 020-15-0005-002-05-1002 and 020-15-0005-002-1003 for other additional buildings on the land. Likewise, for machinery installed in a parcel of land, whether owned by the landowner or any person other than the landowner, the permanent PIN of said machinery will bear the same PIN of the land with a four(4)-digit number beginning from 2001 added to it, followed by "2002", "2003", etc., for additional machinery. Example: 132-06-0012-001-35-2001; 132-06-0012-001-35-2002 and 132-060012-001-35-2003, etc. for other machineries installed on the land. The aforementioned four digit numbers in effect substitute the temporary postfixes B-1, B-2, B-3, etc. and M-1, M-2, M-3, etc. indicated on the FAAS of building and machinery. 11. Property Identification Numbering in cases of Parcel Subdivisions or Consolidation. - In case of a land subdivision involving two (2) or more parcels, the PIN of the original parcel shall be retired while the newly created lots shall be assigned consecutive numbers beginning with the number following the highest parcel numbers in the section. These are then indicated on the tax map and new FAAS shall be prepared for each subdivided parcel. The appropriate PIN shall then be placed on the corresponding FAAS, thereby, completing the tie-in between parcel and FAAS which initiates the issuance of the necessary assessment records, thus, maintaining the integrity of the property numbering system. Likewise, in cases of consolidation of two or more existing parcels into a single ownership, the original property identification numbers of the parcels affected shall be retired and the resulting single parcel shall be assigned with a number next the highest parcel number in the section. The practice of retiring index numbers for subdivided or consolidated parcels provides a history of physical and ownership changes of the parcels involved. 12. Barangay Index Numbers for New Barangays. - In preparing a new Barangay Index Number once the mother barangay is divided into two or more barangays, the procedure is to cancel the previous original barangay index number and use the last succeeding Barangay Index Number. For example, if the last Barangay Index Number is 0021, the succeeding (new) Barangay Index Number shall be

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0022, 0023, etc., following the principle of retiring the PIN of a parcel of land in case of subdivision/consolidation. Illustration: Barangay Dadiangas, the mother barangay with an Index Number 0001, was subdivided into four (4) newly created barangays, namely: Dadiangas North, Dadiangas South, Dadiangas East and Dadiangas West. Assuming that a city is comprised of 21 barangays, each with an assigned Index Number whereby Barangay Dadiangas is numbered 0001 and continuing serially through all barangays on an alphabetical basis, the last barangay has an Index Number 0021. Thus, mother Barangay (Dadiangas) 0001 is considered retired and retaining the index number of the other barangay while the newly created barangay will be numbered as follows: 0001 for Dadiangas (retired) 0021 for the last barangay 0022 for Barangay Dadiangas East 0023 for Barangay Dadiangas North 0024 for Barangay Dadiangas South 0025 for Barangay Dadiangas West 13. Mechanics of PINS. - It shall be the duty of the Provincial, City or Municipal Assessor of Metropolitan Manila Area to explain to all his personnel the mechanics and system of the Property Identification Numbering. Special instructions shall be made to the personnel of the Tax Mapping and the Records Division, who are directly involved in the execution of the Tax Mapping Operation. 14. Preparation of Field Appraisal and Assessment Sheet (FAAS). - After receiving special instructions on the mechanics of Property Identification Numbering System (PINS) and upon direction of the Provincial, City or Municipal Assessor of Metro Manila Area, the staff of the Records Management Division shall start to prepare Field Appraisal and Assessment Sheet (FAAS) as prescribed under Annexes ___, ____ and ____ hereof. This is done by copying from existing tax declaration all the information except the classification and value of the property contained on each original copy of the tax declaration on file by municipality in the case of province, and by district or barangay in the case of city or municipality within Metro Manila Area. Only one FAAS shall be prepared for each real property unit declared under existing and active Tax Declaration. (a) Preparation of FAAS by Municipality. - The preparation of FAAS shall be done on a municipality by municipality basis in the case of province. 42

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In the case of city or municipality of Metro Manila Area, FAAS shall be prepared by barangay. (b) Segregation of FAAS by Barangay. After the FAASs have been prepared for the entire municipality or district, they should be segregated by barangays except for the city or municipality of Metro Manila Area that were already process by barangay. Those covering lands including buildings, machineries or other improvements, which were identified to be standing or installed in a particular parcel of land, shall be attached to the corresponding FAAS of the land, should be segregated and placed in one file while those covering buildings, machineries or other improvements whose location were not identified should be separately placed under another file. FAAS on each file should be arranged in alphabetical order by surname of the declared owner. However, for a province that may undertake tax mapping on two or more municipalities simultaneously, the temporary PIN shall be of the three(3)-digit Municipal Index Number, the four(4)-digit Barangay Index Number and the four(4)-digit number assigned to each FAAS. Thus, the first FAAS of the first barangay in Municipality of 002 should be 0020001-0001, where 002 identifies the Municipal Index Number, 0001 identifies the Barangay Index Number and 0001 identifies the FAAS. (c) Assigning Temporary PIN on FAAS. - Following the arrangement of FAAS in the immediate preceding paragraph, each FAAS of land shall now be assigned with Temporary Property Index Numbers consecutively beginning with the number 0001 for first FAAS and proceeding in numerical order until the last FAAS in the file. It is important that a four (4) digit number shall be used for the Temporary Property Index Number as this will readily distinguish it from the two (2) digit number which will be assigned to each parcel of land under the Permanent PIN after the tax mapping operation is completed. The complete temporary PIN shall consist of the four (4) digit Barangay Index Number and the four (4) digit number assigned to each FAAS, thus the first FAAS of the first Barangay in a municipality or city should be 0001-0001, where 0001 identifies the barangay index number and 0001 identifies FAAS. The PIN at this point is "Temporary" because before tax mapping, the number controls the FAAS only. After tax mapping these official records will be linked together with the real property they represent on a permanent basis. (d) Temporary PIN of FAAS Covering Buildings, Machinery and other Improvements. - The following steps shall be made on FAAS covering buildings, machinery, and other improvements now arranged alphabetically in a separate file: (1) FAAS covering building identified to be constructed on a particular parcel of land whether owned by the landowner or any person other 43

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than the landowner, shall be attached to the FAAS of the land and assigned with temporary PIN bearing the temporary PIN of the land with postfix B1 added to it, followed by B2, B3, etc. for the additional FAAS still covering buildings identified to be standing on the same land, for example: 0001-0001B1; 0001-0001B2; 0001-0001B3, etc. (2) FAAS covering machinery identified to be installed in a particular parcel of land whether owned by the landowner or any person other than the landowner, shall be attached to the FAAS of the land and assigned a temporary PIN bearing the temporary PIN of the land with postfix M1 added to it, followed by M2, M3, etc. for additional FAAS still covering machineries identified to be installed on the same land, for example: 0001-0001M1; 0001-0001M2; 0001-0001M3, etc. (3) Those FAASes covering buildings, machinery and other improvements, which are not identified in whose land they are located, shall be filed alphabetically and placed in a separate folder for proper identification and assignment of temporary PIN in the field in similar manner as in the preceding paragraphs.

SECTION 4. - TAX MAPPING OPERATION Tax mapping is a highly accurate method of field operations for identifying real property units, defining property boundaries, determining actual use, and discovering undeclared properties for taxation purposes A. Objectives of the Tax Mapping Operations 1. 2. 3. 4.

To establish a complete inventory of all real property; To provide a permanent link between real property and office records; To identify the ownership of every piece of real property; and To account for the sum total of all land area of provinces or cities or municipalities.

B. Three (3) Phases of Tax Mapping Component1. Pre-field Operations 2. Field Operations 3. Post Field Operations Importance of Tax Maps. - Tax maps are the single most important tool in the assessment process. It is impossible to establish an adequate property tax record and accounting system without tax maps, for they are the basic foundation of the system. They establish a permanent link between the real property in the field and the tax records in the office. They are indispensable to the discovery of property and the identification of property ownership. They simplify the task of property 44

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description and tie together all property records, including field appraisal and assessment sheet, tax rolls, and collection registers. They also serve the additional important purpose of providing the public with vital real property information. Finally, tax maps make possible the establishment of a system of records that is easily adopted to automatic data processing techniques. Thus, it may be seen that tax maps are absolutely necessary in any systematic method of assessment administration. As tax maps constitute the first step and the prime requisite of any general valuation or revaluation program, assessors should place the highest possible priority on their construction over all other phases of assessment work.

C.

PERSONNEL SUPPORT 1. Organization of Provincial, City and Municipal Assessor's Office.- In line with the Real Property Tax Administration (RPTA) program, Provincial, City Assessor’s Offices, as much as possible shall be reorganized in such a way that the following divisions are provided: (1) Tax Mapping Division - To take charge of the tax mapping operations. (2) Appraisal and Assessment Division - To take charge of real property appraisal and assessment operations. (3) Records Management Division - To take charge of records management operations. (4) Research and Statistic Division - To take charge of gathering and studying data on real property valuation, assessment and tax collection. For provinces, a Field Operations Division, may be created, to supervise the Municipal Assessors. To insure the effective implementation of the RPTA program there may be created in every Office of the Municipal Assessor at least one (1) position of Tax Mapping Aide; one (1) position of Assessment Clerk; one (1) position of Records Clerk; and one (1) position of Statistical Aide. 2. Staffing of the Provincial/City and Municipal Assessor's Office.- Once the formal organization and the staffing pattern have been determined, the next important step is the preparation of qualification standards for each position. Staffing with qualified personnel in assessment offices is extremely important. The qualifications of employees already on the job should be carefully checked to insure that the right persons are in the right 45

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positions as designated by the staffing pattern. Recruitment of new employees to fill new or vacant positions should be so conducted as to positively insure that only those who are fully qualified would be placed in the various technical and supervisory positions. The building of a permanent professionalized and technically competent staff is also a goal of the real property tax administration. 3. Staffing the Tax Mapping Division.- In order to carry out effectively the tax mapping operations under the RPTA program, the Tax Mapping Division shall be provided, at least, with the following minimum regular positions: (1) One (1) Tax Mapping Division Chief - He shall supervise, coordinate and direct all phases of the tax mapping operation. Preferably the incumbent should be a college graduate with engineering or land surveying background. In some cases, someone with land surveying and cartography work experience from the Bureau of Lands, Bureau of Coast and Geodetic Survey, Private Surveying Firms or other agencies engaged in land surveys may be recruited to occupy the position. This kind of experience is sometimes more valuable than a formal educational background. (2) Two (2) Tax Mappers - The Tax Mapper shall serve as team leader in tax mapping field operation. Preferably, he should have some college engineering background with demonstrated leadership and supervisory capability. (3) Two (2) Draftsmen - They are the ones responsible for the preparation of all maps (from base maps to final maps) relative to real property tax administration and may be utilized to assist in actual sketching work in the field. A high school or vocational graduate with substantial training or experience in drafting or cartography may qualify for the position. (4) One (1) Typist/Research Clerk - This person shall be responsible for the recording, cataloguing, and cross referencing of all maps and related records of the tax mapping division in both the field headquarters and the main office. A person who has completed at least two years college and with knowledge or experience in typing may qualify for the position. (5) One (1) Map Filer - He shall be responsible for the filing and safe keeping of tax maps and related records. He must be at least a high school graduate of average intelligence and above all dependable. The foregoing minimum qualification requirements are subject to such guidelines, rules and regulations on position classification 46

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and related personnel matters as may be issued by competent authority. If extensive use is to be made of aerial photographs, qualified personnel in this Division should be enrolled in the Photo Interpretation Program at the University of the Philippines Training Center for Applied Geodesy and Photogrammetry.

D. FACILITY, EQUIPMENT AND COMMODITY SUPPORT 1. Facilities.- A separate work area for the preparation and storage of tax maps and related files must be provided, away from direct contact with the public but immediately accessible to field survey personnel. The work space provided should be cool, dust-free, and of sufficient floor area to provide freedom of movement between and around drafting tables, map files, etc. Adequate working facilities represent only a relatively limited cash investment, but one that is absolutely essential to a successful Real Property Tax Administration improvement projects. 2. Equipment and Commodity Support of Field Operations.- Successful performance of the field phase of the tax mapping and tax appraisal operations depends to a large degree upon the adequate equipment and commodity support, including transportation, the basic tools for mapping and measuring and essential supplies. Virtually every field operation requires the use of suitable vehicles to transport personnel, equipment and materials to and from the work site in the field. Past experience has repeatedly proved that projects fail or fall behind schedule when inadequate vehicular support is provided. If at all possible, one or more vehicles should be assigned to the field teams throughout the period they are engaged in field work. As the various field phase of tax mapping and tax appraisal work are accomplished the work burden shifts to the Office where the official tax maps and records are prepared. Once again, the success of the operation depends to no small degree on the adequacy of the equipment, tools and materials available for the work to be done. In cases of major office equipment outlays, these should be carried as capital purchases in the Capital Improvement Program (CIP) of the province, city or municipality. Each year’s budget should make specific and detailed provision for all items of office equipment, office tools needed for mapping and record making, and the office supplies, including the necessary forms. The entire office support operations as it relates to the real property tax administration program must be specifically budgeted in order that the needed items will be on hand ready for use when needed. 47

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Provision of adequate working tools, equipment and materials for field tax mapping and tax appraisal operations is also of great importance. Field crew that arrives on site with adequate tools, equipment and materials are in a position to produce quality work. Without this support, the end product will suffer and the time taken to produce even inferior work will increase substantially. Tax mapping field teams should have access, at least, to the tools, equipment and materials listed below: (1) Equipment and Tools: (i) (ii) (iii) (iv) (v) (vi) (vii)

Vehicle (preferably jeep and/or motorcycle) Magnetic Compass Transit Engineer Steel Tape Stadia Rod Portable Calculator Basic Drawing Instruments (such as triangle, scales, pencils, etc.) (viii) Map Boards

(2) Materials: (i) Engineering Controlled Land Survey Maps (ii) Rectified Aerial Photographs (iii) Plastic Overlays (iv) Tracing Papers (v) Chalks (vi) Papers, etc. Adequate and detailed provision must be made in each annual budget for the vehicular support and maintenance, and for the acquisition of the equipment, tools and materials needed to support field operations. This will require the programming of and identifying what items are exactly needed in the field operation for a particular period. A direct follow up should be made through the budgetary process to insure that necessary funds are appropriated and made available as required.

E. Preparatory Steps in Tax Mapping Operations: 1.

Base Source Data Inventory. - Tax maps should be prepared from either one or any combination of base data sources, viz: (1) the existing engineering control survey maps; (2) the rectified aerial photograph; or (3) the original parcellary survey to be conducted by the Assessor's Office.

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(a) Existing engineering controlled land survey sources are listed as follows: (1) Cadastral maps - survey maps referring to extensive urban or rural surveys made for the purpose of locating property lines and improvements, and is primarily used in connection with the extent, value and ownership of land. (Davis and Foote Surveying) (2) Public Land Survey Maps - maps of surveys conducted for the purpose of subdividing land in accordance with some pre-arranged plans within a designated area. (Davis and Foote Surveying) (3) Isolated Survey Map - maps of surveys conducted for isolated or private land are usually for the purpose of obtaining clear title certificate to the land. (4) Topographic Map - map showing the topography or relief (by contour line) of the area including water drainage areas and other man-made structures. (5) Map of Existing Road Network - map showing the location, extent, design and alignment of roads. (6) Other relevant sources such as technical descriptions from Certificate of and Title and Deeds, etc. which can be taken from the Registrar of Deeds or Land Registration Authority. (b) Rectified Aerial Photographs - Rectified aerial photograph can be used as basis and source for base map in tax mapping operation. It provides an excellent source of information for a parcellary mapping and property assessment. Advantages of mapping with the aid of aerial photographs are rapid coverage of large areas, accessible or inaccessible and assurance in getting visible detail. The procedure for lot-sketching using rectified aerial photos is described in a later portion hereof. (c) Original Parcellary Survey - In the absence of engineering controlled land survey maps and rectified aerial photographs, the Assessor concerned shall conduct an original parcellary survey under any of the following methods. (1) Compass and Tape Method (2) Transit and Stadia or Tape Method (3) Plane Table Method 49

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The execution of the abovementioned survey method is discussed in the later portion hereof.

2. Preparation of Base Maps - It is impossible to secure a complete set of standard base map for a municipality or city. The assessor concerned shall explore in resorting to the existing and/or available maps, or undertake parcellary survey as mentioned in the preceding section hereof in the preparation of a base map for the purpose. This requires the compilation and coordination of all survey plans and property descriptive data so that they will be as accurate and prevailing as possible. When the base source data are developed into a coordinated map covering the entire municipality or city, or portion thereof, the developed map (s) is called the base map. Base Map - The first step in the preparation of tax maps is to secure base maps. These maps should be a coordinated and updated maps drawn to scale which shows political boundaries, lot lines, public and private improvement such as roads, highways, railroad lines, irrigation network and natural features like rivers, creeks, lakes, etc. (See Fig. 5.) (a) Engineering Controlled Land Surveys. - If engineering controlled land survey maps are to be used for tax mapping purposes, it shall be necessary to prepare base map of the municipality or city so covered. This map shall be developed from available property boundary information gathered during the base source data inventory. The procedure is to consolidate or integrate all the various existing maps covering an entire municipality or city by tracing them in a tracing paper. In the process, such map should be reasonably accurate and up-to-date. Information should be readily retrievable by reference to the base source data. Since base maps are to be developed from various maps of different scales, the same should be drawn to a standard scale for a barangay or segregated portion of a city or municipality. As far as possible one standard scale may be used for the entire city or municipality. The scale so selected should be convenient enough to produce a base map where details necessary for property identification can be conveniently indicated in every parcel of land thereon and discernible. Thus the engineering controlled land survey maps with different scales shall be reduced or enlarge to the selected scale with the use of a pantograph. For this reason maps covering highly urbanized areas may be prepared of relatively large scale while those covering rural areas may be prepared of relatively small scale. After the development of the base maps, it is necessary to invariably delineate provincial, city, municipal, district and barangay boundaries on the base maps. At this point the preparation of base map from engineering 50

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controlled land surveys has been completed. The original (in tracing paper) of the base maps shall be safely kept and preserved in the Office and shall not be used as a working map for tax mapping purposes in the field. Instead, several prints of the original base map shall be made and used as working map in the field. (b) Rectified Aerial Photographs. - When using rectified aerial photographs, the preparation of base maps shall be accomplished in the field operation. Actual field inspection and personal interviews with the owners or occupants shall be made to determine the necessary information in identifying every parcel of land including its corresponding corners and lines. Every determined corners and lines of separate parcel of land shall be delineated directly on the photo overlay and necessary data shall be recorded in the appropriate forms, continuing the operation until the aerial photograph in use has been completely covered. The accomplished photo overlay represents the base map for the area. Appropriate joining information as coordinated between aerial photographs in use shall be made to make certain no gap occur in the area which has been mapped. Sketch information on the photo overlay, which is a superimposed transparency sheet (tracing paper), shall be the basis in preparing the tax maps. The original sketches in the tracing paper shall also be kept and preserved in the same manner as mentioned in the immediate preceding paragraph. For convenience of field sketching on aerial photographs and for the protection of the photos from damage which may be sustained from weather or handling during field operations, rectified aerial photographs should be encased in a map board. The board is simply a piece of plywood or lawanit cut slightly larger than the aerial photos and covered with plastic overlay film secured on three sides. The 4th side is left open for the convenience of changing photos by slipping them in and out of the map board. Once secured in the photo map board, boundary lines and other information can be drawn directly on the overlay film or tracing paper. Either method is satisfactory. In this manner the aerial photos will be protected during their use in the field. (c) Original Parcellary Survey. - In the absence of engineering controlled land survey maps and rectified aerial photograph, the Assessor concerned shall conduct an original parcellary survey using any of the methods: Compass and Tape Method; Transit and Stadia or Tape Method; and Plane Table Survey Method. The following preparatory steps shall be made before fieldwork: (1) Organization of Surveying Team. The team is composed of the following: (i)

One (1) Instrumentman - Operates the Transit or Compass. If nobody in the Office knows how to 51

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(ii)

(iii)

(iv) (v)

(2)

operate a transit or compass, somebody from the outside shall be recruited for the purpose. One (1) Lineman - Establishes the loop traverse control stations and acts as foresightman. To be designated as such is the Tax Mapper. Two (2) Chainman - Measure the distance between traverse stations and/or property boundary corners. To be designated as such are the Data Gatherer and Tax Mapping Aide. One (1) Laborer - Serves as Instrument Carrier and Backsightman. One (1) Guide - Assists the team in identifying the property owners and pinpointing the boundaries of the lands.

Necessary Equipment, Materials and Supplies to be used in Original Parcellary Survey:

(i) (ii) (iii) (iv) (v) (vi) (vii)

Transit or Compass Engineer's Tape Stadia Two (2) Plumb Bobs Fieldnote Books Metric Scale Basic drawing Instruments (Triangles, Protractor, pencils, etc.) (viii) Drawing Materials (Tracing Papers, ink, etc.) (3) Procedure: (a) Compass and Tape Method: A parcellary survey may be undertaken by the use of a lensatic or any other compass of similar quality and a tape. The compass and tape are used to measure the direction and distance, respectively. At each property corner of the lot, the bearing (angle) toward the succeeding corner of the same property shall be taken and recorded on the fieldnote. The distance from the occupied corner to the sighted corner will then be measured by the tape and properly recorded. The direction of lines is measured by a compass showing the angle in degrees of the line with respect to the meridian (north-south line) is called ‘bearings’. These bearings are measured from North or South and towards the east or west. Bearings are written in abbreviated form by the meridian direction (north or south) and the angle of the measured line to either the west or east, like N 55’E which means that the line is 55’ east if the direction measured is from north or simply directly northeast. The 52

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recorded bearing and distance shall then be plotted on a sketch map sheet, preferably a tracing paper, at a convenient size to accommodate as much as possible all the parcels in a barangay. The same process shall be continued until all property boundary lines shall have been plotted accordingly on the sketch map sheet. Pertinent data needed in connection with tax mapping and appraisal and assessment operations, as much as possible shall be gathered and recorded on the proper forms simultaneously with the parcellary survey. (b) Transit and Tape/Stadia Method: The transit is a surveying instrument used for the purpose of measuring angles. The operation, use and maintenance of a transit are an extensive subject, which will not be covered in this manual. It is assumed that a person on the Assessors staff will be qualified to conduct training of field personnel in this subject. A Bearing (a direction of a line) is the angle measured from any reference line, such as magnetic or true meridian. Bearings are angles measured from the north and the south towards the east or the west. They can never be greater than 90 degrees. Bearings read in the advancing direction are forward bearings; those in the opposite direction are back bearing. Computed bearings are obtained by using a bearing and applying a direct deflection, or other angle. Bearings, either magnetic or true are used in returning old surveys, in computations, on the maps and on deed descriptions. An Azimuth is a clockwise angle measured from some reference line, usually a meridian. Most government surveys use geodetic south as the base azimuths. Other surveys in the Northern Hemisphere may employ north. Azimuths are advantageous in topographical surveys, plotting, direction problems, and other work where the omission of the quadrant letters and a range of angular values from 0 to 360 degrees simplify the work. Horizontal Control explained: All surveys require some kind of control, be it a base line, or benchmark, or both. Horizontal control consists of points whose positions are established by traverse, triangulation or trilateration. The Philippine Coast & Geodetic Survey has established many thousand control points throughout the country and tabulated azimuths, latitude and longitude, coordinates and other data for them.

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Transit-tape tertiary traverse control maybe sufficient on original parcellary surveys for tax mapping purposes. Property corner points may be located by sideshots from traverse stations and their distances as much as practicable will be taken from stadia readings. Corner points may be also located by intersection of two sideshots taken from two traverse stations. Based on the survey data, recorded on the fieldnotes provided for the purpose, traverse station (horizontal controls) and property corner points shall be plotted at a predetermined scale on a tracing paper of convenient size enough to accommodate as much as possible all the parcels in the barangay. The parcellary sketch map may be progressively accomplished as the fieldworks go on. (c) Plane Table Survey: Two basic kinds of table are used: a small traverse with peep-sight alidade and fixed leg tripod without leveling head, obviously appropriate only for rough work; and the standard plane-table board, usually 24 by 31 in., set on a tripod having either the USC & GS fourscrew leveling head or the Johnson ball-and-socket head. Plane tables are oriented by means of a declinator, by backsighting as with a transit, or by resection. Permanent backsights (towers, lone trees, fixed signals) enable the instrument man to check his orientation frequently without interrupting the rodman's movements. A traverse is run by orienting the table, sighting the next point, drawing a line along the alidade blade and plotting the stadia length, then moving to the plotted point and repeating the process. An average distance and elevation is obtained from the foresight and backsight. Adjusting the vertical is index to read zero when the bubble is centered presents an ever-present problem, because the table goes off level. Topographic details are located by radiation or intersection. Short distances can be measured with the cloth tape for large-scale maps. The intersection method (graphical triangulation) is appropriate for long sights taken from two plane-table stations or three for checking - to inaccessible points. In resectioning, orientation of the table at positions not yet identified on the map is done by either of the two or three point method. In two point location, a direction toward the unselected next point "X" is plotted. After setting up at any selected spot on the projected line "bx", the table is oriented using that line. By 54

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sighting to the known plotted point "A", which preferably is at an angle of 60 to 90 with "bx", the set up location is fixed at point y; the intersection of "bx” and "aA” extended. The three-point location method determines the plane table position after the table is set up at a place from which three or more prominents plotted control signals can be seen. Area drawn with radii equal to the measured distance and using the plotted signal points as centers give the desired point. Scales of Map - The following are some standard scale that shall be considered in the preparation of maps. The sizes of parcels of land and convenience for field use have been the controlling factors in influencing its use. (a) Urban areas (b) Rural areas (c) Forested areas

1:100 to 1:2000 1:1000 to 1:10,000 1:4000 to 1:50,000

PRE-FIELD OPERATIONS - The first step in the Pre- field operation is the preparation of base map as earlier discussed. It is important that cadastral maps and all engineering controlled maps are secured from the Department of Environment and Natural Resources/Land Management Bureau (DENR/LMB) or from other government agencies concerned. 1. PREPARATION OF PRE-TAX MAP CONTROL ROLL - Upon receipt of the duly prepared FAAS from the Records Management Division, the staff of the Tax Mapping Division, shall start to prepare the Pre-Tax Map Control Roll. The necessary data contained in the FAAS shall be tabulated in the said control roll in numerical order of the temporary PIN. These roll facilitates the control of FAAS in the field as well as supplying the field crew with a systematic method of accounting for selected information. It also serves as checklist in determining the extent of coverage by the tax mapping field crew. 2. PRELIMINARY TIE-UP OF FAAS AND PARCELS ON BASE MAPS.- The success of the field operation, and the tax mapping as a whole is largely dependent upon an initial attempt to link office records and the corresponding parcels in the base map prior to actual field property identification. The procedure is called the preliminary tie-up. To accomplish such process, the inputs required are the Pre-Tax Mapping Control Roll and the base map of the municipality or of the individual barangays and, if available, the list of claimants which can be secured from the Land Management Bureau. By reference to the survey lot number, the necessary information for each FAAS reflected in the PreTMCR, a set of information is transferred to the base map. This information includes the name of the declarant, area as declared, a notation T for titled properties in blue ink and the 4-digit temporary property index number in red ink. Data from

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the claimant’s list may serve as an aid for purposes of validation and/or reconciliation as to the name of the claimant and the area. One of the important features of the Preliminary Tie-Up is the use of a technique in identifying FAAS (in the Pre-TMCR), which have been linked with the corresponding parcels. For a one-to-one correspondence of parcel and FAAS, i.e., one FAAS for one lot, a check mark on the left side of the temporary PIN of the PreTMCR and a check mark in the base map parcel is used to signify the Office Tie-Up. This means that the ownership will just have to be verified during the field operation. If the tie-up in the Office is confirmed in the field thru an interview, then a second check should be marked on the right side of the temporary PIN of the control roll used. It is always possible that not all prepared FAAS could be tied-up with the parcels in the base map. This requires actual verification in the field. Chances are that several parcels on the base maps may not be covered by tax declarations hence undeclared by the owners. As such, a new FAAS for each of this parcel shall be prepared on the field after identifying the property. 3. PREPARATION OF WORK PLAN AND SCHEDULE - In order to attain a maximum output and efficiency, a fieldwork program shall be prepared. The Chief of the Tax Mapping Division together with the team leaders should prepare the fieldwork program and schedule. The work program should include points of orientation, routes to be taken the number of parcels to be covered in a given period and the time for returning to the field headquarters in the evening. The Chief Tax Mapper who should accompany one crew daily on an alternate basis can give supplementary instructions. Supplementary instructions can likewise be given at the headquarters during evenings when all members of the field crews have assembled. 1. Pre-Field Operation Activities: a) Organization of Tax Mapping Teams 1. Data Gatherer/Tax Mapper 2. Tax Mapping Aide 3. Barangay Guide b) Training of Tax Mapping Team c) Procurement of Cadastral Map and list of lot claimants d) Preparation of Base Maps from: 1. Engineering Controlled Survey 2. Aerial Photography 3. Topographic Maps 4. Road Network Maps e) Gathering, Classifying and Compilation of property records such as: 1. Titles 2. Sketch plan 3. List of lot claimants 56

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f) g) h) i) j) k) l)

m) n)

o)

p) q)

4. Other pertinent data Reflecting lot claimants and area on the base map. Preparation of FAAS Arrangement of FAAS alphabetically by barangay (lands/buildings). Attach all FAAS for buildings to their respective parcels with postfix B-1 Assignment of Temporary Property Index Number to the first FAAS with 001 for every barangay – (Complete Temporary PIN 001-0001) Preparation of Pre-TMCR Preparation and submission of work plans which will include: 1. Points of Orientation 2. Routes to be taken 3. Number of parcels/RPUs to be covered per day 4. Time for returning to field headquarters Pre-Field tie-up General briefing of Tax Mapping Team 1. Public Relation and courtesy towards municipal and Barangay Officials as well as the taxpayers and residents. 2. Field Operations Techniques 3. Magnitude of the field Tax Mapping Program 4. Data to be gathered and recorded in the field 5. Accomplishment of the necessary prescribed forms Notification of municipal and barangay officials and written notices, written both in English and Vernacular, to be placed in conspicuous places Establishment of proposed headquarters Final Check of equipment, supplies and materials

2. Field Operation Activities: a) Courtesy Call - Immediately upon arrival on the field, and prior to the beginning of the work, the Chief of the Tax Mapping Division together with all members of the team should confirm their arrival with the appropriate local officials. This generally entails a visit to the municipal building. Crewmembers are introduced to local officials so that they can be recognized on sight as members of the Assessor’s staff. The Chief, Tax Mapping Division should also present and discuss their work plan and schedule with local officials and arrange a tentative schedule for periodic meetings to keep them well-informed of work progress. 1. Introduction of the members of the Tax Mapping Team to the officials concerned 2. Presentation and discussion of work plans with local officials 3. Request for barangay guides b) Orientation of guides - As soon as practicable, barangay leaders are assembled for the purpose of their importance in the tax mapping operations. The work plan and schedule should be coordinated with barangay leaders. 57

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Guides who are not needed immediately can return to their barangay and begin an independent informal survey to facilitate and expedite the property identification operation in their respective barangays. Guides should be impressed that the major purpose of the operation is to identify real property parcels and their respective owners. c) Final Briefing of Tax Mapping Team 1. Tax Mapper − Leads the team in all phases of the operation − Takes note of questions of boundaries and ownership of real properties − Directs all Mapping and information gathering activities − Checks the Teams field accomplishment − Takes custody of the Pre-TMCR and the FAAS − Responsible for assigning Temporary PIN − Records all information necessary for appraisal and assessment of all real properties 2. Tax Mapping Aide − Takes charge of the base maps − Records the necessary notation on the base maps (Temporary PIN, Title (T) check marks for properties tied up) − Reflects partition or consolidation based from approved plan from Bureau of Lands 3. Barangay Guide − Assists the team in identifying the ownership and property boundary lines − Serves as liaison between the real property owners and the Tax Mapping Team d) Field Work Activities 1. 2. 3. 4. 5. 6.

Field interviews with property owners or administrator Identification of property ownership Adjustment of property based on approved plans Parcellary sketching in case of subdivision or consolidation Conflicting areas/boundaries should be identified Final tie up with FAAS in the PRE-TMCR with the tax mapped parcels on the base map with red check mark on the right hand side of the Temporary PIN on the PRE-TMCR. 58

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7. Parcels on the base map should be properly assigned with the temporary PIN in red ink. If properly identified and for pre-tie up parcels a check mark is indicated meaning a complete tie up has been made and T in blue ink should be reflected for titled parcels. 8. Determination of adjustment factors such as type of road outlets, distance to all weather road, Poblacion, Market and Trading Centers 9. For mixed classification such as agricultural and residential, the area for both should total the area reflected on the base map 10. For newly discovered land declared for the first time, a new FAAS should be prepared with ten (10) years back taxes imposed from date of discovery 11. Approved plan from the Bureau of Forestry with declaration that the land is alienable and disposable 12. If the property has been occupied for less than 10 years, a barangay captain’s certification should be presented with the affidavit of the adjoining owners stating that such taxes shall take effect the year following the occupancy 13. For Buildings: − Gather all data needed to come up with correct computation of market value to determine the correct assessed value. − Other building plans should be secured if possible. 14. For Machineries: − Machine type − Number of machine − Brand name of machine − Year acquired/installed − Condition of machine − Replacement/Reproduction cost for old machine e) GENERAL FIELD ACTIVITIES. - Whenever possible, field activity should follow the work plan. However, depending on unforeseen circumstances on field conditions, the tax mapping crew can make necessary adjustments in the program. These changes should be recorded in the daily production/accomplishment report sheet and should be reported to the Chief, Tax Mapping Division, at the earliest convenience. Although some specific techniques may vary between methods used, there are some general procedures that will apply in all cases. The tax mapping team must familiarize themselves with the base maps, aerial photos or original surveys as starting point. Combined with the method of inspection and measurement, the team will determine property boundary lines and corners. This is done in close coordination with the owners or occupants of the properties. The information gathered is verified from the base map. Simultaneously, the team completes the pre-TMCR and the field appraisal and assessment sheet (FAAS) by recording therein the necessary information relative to the property under survey. This process is repeated for every parcel. For newly discovered property, a FAAS shall be 59

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correspondingly prepared and a temporary PIN next to the last temporary PIN in the Pre-TMCR is assigned. 4. REVIEW OF FIELD WORK ACCOMPLISHMENT AND DATA GATHERED. - Following each day's work, the tax mapping team leader examines the field work and identifies those areas which need clarification. A partial checklist to be used by team leader as a guide shall be as follows: (a) Has each team completed the assigned area? (b) Does each parcel contains a temporary PIN? (c) Are there gaps, or overlaps between assigned crew work areas? (d) Are there any discrepancies found in barangay or municipal boundaries? (e) Is there FAAS for each property? (f) Can clear accurate sketches be drawn from information as provided? (g) Are sketches oriented by north arrow? Following comprehensive review of all field work including real property field appraisal and assessment sheets (FAAS), Pre-TMCR, sketches and other clarifying information, the team leader makes the decision as to whether or not the field operation has been successfully concluded. If not, teams shall be sent back to the area for the purpose of getting the specific information which they have missed previously. Once the team leader feels certain that he has secured sufficient information for the purpose of preparing tax maps and records, the crew is ready to return to the Assessor's Office. 3. Post Field Operations: Upon returning from the field, the tax mapping operation enters its final phase. In this phase, the final tax maps are prepared, permanent property identification numbers are assigned, if necessary land area is calculated and the FAAS are completed. a) Definition of Terms: Tax Map – Is a graphic representation of a portion of the earth's surface drawn to scale on standard size drawing material, having property lines and jurisdictional boundaries delineated showing all parcels of real property and identifying each separate real property ownership by a unique number. A tax map is also referred to as property identification map. The final tax map also indicates the section in the permanent property identification numbering system.

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Section - Is a portion of a barangay that can be conveniently drawn to scale on one standard size tax map sheet. Drafting Machine - a mechanical device designed to increase drafting production with fewer motions and greater accuracy. Pantograph - an instrument for copying from one scale to a predetermined second scale and designed to eliminate the need for expensive and time-consuming redrafting. Planimeter - an instrument for measuring the area of a figure by tracing its boundary line without the necessity for extensive and time-consuming calculations. Standard Format and Size of Tax Map. - The tax map shall be prepared from the validated base map and/or parcellary sketches made in the field using the standard map format prescribed under Annexes ___ and ___ hereof. The overall size of the prescribed standard tax map is 35.5 centimeters by 50 centimeters. Moreover, index maps, which shall be bound together with the tax maps, become necessary that their size shall be the same as that of the tax map. 1. Activities: a. Sectioning - It is not ordinarily convenient to draw an entire barangay on one single standard size. This inconvenience is caused because of the input requirement of presenting the information graphically to scale on the standard format as described above. To avoid duplication of parcels, the section boundaries should be made to pass along the property boundaries or along improvement lines if feasible. Sectioning of a typical barangay is shown in Figure ___, illustrating how the standard size format is laid over a typical barangay. It should be noted that each section is, all-inclusive, mutually exclusive, and assigned a number, which is recorded on a section index map. 1. Conflict Area. - Area covered by political boundary conflict shall be invariably indicated on the barangay index map and shall be considered as additional section/s of both barangays claiming for it. Said section/s shall bear the last section index number/s of both barangays. A status quo shall be observed for the issuance of the necessary assessment records of real property located therein, that is, the lots, buildings, machinery and other improvements located within the conflict area shall continue to be listed in the barangays where they are declared under the existing assessment records covering thereof, until the conflict shall be settled. b. Drafting the Tax Map - Field sketch information on the base maps shall be refined and drawn in the appropriate section first in pencil and finally in 61

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black ink. The tracing must follow a standard as to weight and types of lines, symbols and lettering. Information inscribed on the tax map shows lot lines which represents property ownership boundaries and intersection of lot lines which represents property owners. That area bounded on all sides represents a separate land ownership. This process is repeated until each section has been completely drawn to cover an entire barangay. Joining information should be recorded for the purpose of matching contiguous sections. c.

Standard Lines, Symbols and Lettering for Detail Tax Map. - Tax maps are the foundation of the assessor's record system and provide the description for the assessments of all parcels of real property for taxation purposes. The maps therefore should be neat, consistent and uniform in all designation. The standards and specifications are set in Annexes "D" and "D-1". 1. The standard and uniform line designations shall be used for all property lines and the standard set forth in the standard symbols shall be consistently used. 2. The standard lettering guides such as the Leroy or Wrico shall be used so that uniformity for the entire country map system can be maintained.

d. Subdivision Boundaries. - Political boundaries shall be shown by standard designation where they actually fall. (a) Boundary lines that run down the streets or roads shall be shown running down the center of the street or road. (b) Boundary lines that run down the river shall be shown running down the center of the river. (c) Boundary lines that fall along property lines shall be shown by a standard symbol. e. Boundary Definition and Certainty - All political boundaries within the province or city must be definite and certain. Municipality or district and barangay boundaries must be definite and certain. All political boundaries must be positively and physically identified for they are the very foundation of the property identification numbering system described herein. Barangay boundaries in rural areas will generally be coincidental with former barrio boundaries. However, in the poblacion and other more urbanized areas, new barangay boundaries may have not been set. These are the kinds of changes, which should be physically identified and charted before full tax mapping operation should be undertaken in the field. This is perhaps the single most time-consuming problem encountered by field crews in the tax mapping operation and it is one which can be avoided if steps to

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clarify boundaries taken well in advance and/or during the preparation of base map. Boundary disputes involving two (2) or more barangays in the same city or municipality shall be referred for settlement to the Sangguniang Panlungsod or Sangguniang Bayan concerned. Boundary disputes involving two (2) or more municipalities within the same province shall be referred for settlement to the Sangguniang Panglalawigan concerned. Boundary disputes involving municipalities or component cities of different provinces shall be jointly referred for settlement to the Sanggunians of the province concerned. Boundary disputes involving a component city or municipality on the one hand and a highly urbanized city or two (2) or more highly urbanized cities, on the other hand, shall be jointly referred for settlement to the respective sanggunians of the parties concerned. Corollary thereto, concerned officials of all local political subdivisions of the province/city/municipality should be duly apprised in the steps necessary to resolve boundary conflicts and the Provincial, City or Municipal Assessor concerned should make strong representations for the reconciliation, definitions at the earliest time possible. In cases where political boundary questions are resolved under this authority, officials are encourage to set boundaries along easily identifiable existing natural or man-made land divisions (river courses, road-ways, etc.). Further, insofar as possible, attempts should be made to set boundaries to coincide with property lines that are contiguous to political boundaries. This will have the effect of reducing the number of private ownerships that will be split into more than one political subdivision, thereby avoiding an unnecessary additional administrative workload. f. Unresolved Political Boundary Disputes. - The tax mapping operations should proceed despite political boundary conflicts; however, the contested areas shall be clearly defined in the final tax maps, the preparation of which are discussed in the later portions hereof. g. Final Parcel Numbering on Tax Map. - After all the parcels have been drawn in the section map, each separate parcel therein shall be assigned a two (2) digit number. The numbering sequence shall start from the northern most parcel as "01" and moving from west to east, then south, and east to west, then south (or tersely stated in an inverted "S" pattern), repeating the west-east-south, east-west-south process until all parcels within the section have been numbered. Insofar as possible consecutive lot numbers should be 63

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contiguous to each other, such as lot 01 should adjoined to lot 02; or lot 02 has a common boundary line with lot 03. See Figures 9, 10, 11, and 12 for illustration. h. Inscription of Permanent PIN on FAAS.- After the permanent property identification number has been assigned to each parcel, this number must be inscribed on the appropriate space of the corresponding FAAS. Recording of the permanent PIN on the FAAS completes the final tying together of the official records with the real property in the field. i. Drafting the Index Maps. - After the completion of the tax maps, index maps shall be prepared. These maps are important because it facilitate ready reference in locating the particular tax map for a city or municipality. It also provides key identification and control of all lands within the province, city or municipality as well as district and barangay. The order of preparation of these maps is as follows: (a) Section Index Maps - After tax maps have been prepared, section index map of every barangay shall be prepared by consolidating all tax maps comprise a barangay, showing therein the boundary lines of the section with its corresponding index number which is numbered in accordance with Section15 hereof. Inasmuch as the size of the index map will be the same with that of the tax map, it is necessary that a larger scale be used so that the same would fit in the standard size. (b) Barangay Index Map - On the basis of the developed section index maps, the Barangay Index Map is developed. The preparation of which shall be made by consolidation of all section index maps to form a map of the municipality, city district or city. This map shows the barangay boundary lines of each barangay with its corresponding barangay index number, which is numbered in accordance with Section 12 hereof. This map shall be drawn in a standard map size. (c) Municipal Index Map or City District Index Map - These maps shall be prepared by consolidating the completed index maps in the immediate preceding paragraph. This map shows the municipal boundary lines of each municipality in the case of province, and district/barangay boundary lines in the case of city or municipality of MMA, both with its corresponding municipal/district/barangay index number. The map size shall be the same with that of the tax map. j. Post Tax Mapped Control Roll. - A Post Tax Mapped Control Roll (TMCR) shall be prepared for every tax (section) map, based from the information entered in the pre-tax mapping control roll duly accomplished by the field crew during the field operation. The parcel entries are now arranged consecutively by PIN entering parcel number 01 on the first line of the control roll, unlike in the Pre-TMCR where the parcel entries are 64

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arranged in accordance with the alphabetical order of the names of the landowners in the barangay. The prescribed standard format of the post Tax Mapped Control Roll is shown in Annexes "E” and "E-1" hereof, where the tabular entries required are self-explanatory. Since this control roll shall be attached to the corresponding Tax map, it becomes necessary that its size shall be the same as that of the standard tax map. Entries thereon shall be under the direct supervision of the Chief, Tax Mapping Division. The necessary number of copies of this control roll shall be made corresponding to the number of tax map prints. k. Calculation of Land Area. - The final phase in the tax mapping operation is to calculate, if necessary, the area of the parcel of land by geometric formulae, or by mechanical measure (planimeter or other devices). When this information has been recorded on the FAAS, it shall be forwarded to the assessment operation for purposes of appraisal and assessment, which is the next step in the RPTA process. l.

Recomputation of Land Area. - The final step in the maintenance of tax maps shall be the recomputation or measurement of land areas, if necessary and recording the results on the appropriate FAAS. It is important to remember that the sum total of the land area of newly created parcels must be equal to the land area of the original parcel. This information shall be then recorded on the appropriate FAAS and forwarded to the Records Management Division thus ending the process. Records shall be also improved on a continuous basis as engineer controlled land survey information becomes available.

m. Accounting Public Rights-of-Way. - Public rights-of-way must also be accounted for on a land area basis. As public rights-of-way increase, the volume of land area ownership must decrease accordingly, and vice-versa. By maintaining an accurate accounting of streets or roads, the same shall be considered as one parcel of land with an assigned parcel number within a section. The extend of roads/streets, which shall be a closed figure, should be categorized as national, provincial, city, municipal or barangay road. Each contiguous road/street of the same category shall be considered as one parcel within a section. The outline of the road should be shown by standard designation, and the inscription of road/street name therein. See Figures 9, 10, 11 and 12 for illustration. MAP CARE AND STORAGE. - Considering that the provinces, city or municipality has made substantial capital investments in the preparation of tax maps, it is now necessary to protect tax maps and/or aerial photography in the same manner as it would for other capital investments such as vehicles, buildings and infrastructure.

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It be the first rule of the assessor's office that the tax map original should not leave the office. Instead, prints should be made for any intended purpose. For this reason, it is required that as each municipality or city that has been completely tax mapped, at least two (2) complete sets/prints shall be made. In the case of the province, at least three (3) complete sets/prints shall be made. The set of tax map prints together with the post tax map control roll (TMCR) covering the whole municipality or city shall be loose bound in book form arranged in the following order: (a) Municipality/District Index Map (b) Followed by the Barangay Index Map of the Municipality/District (c) Followed by Section Index Map of the first Barangay (d) Followed by the Post Tax Map Control Roll of the 1st Section of the first Barangay (e) Followed by the Tax Map (1st Section) of the first Barangay (f) Followed by the Post TMCR of 2nd Section (g) Followed by the Tax Map (2nd Section) of the same Barangay (h) The arrangement shall be made (steps d - g) up to the last section of the last barangay in the municipality/city The set of original tax maps (in transparency sheet) together with the original TMCR shall be arranged in similar manner, in loose leaves and securely filed in a steel map cabinet. TAX MAP MAINTENANCE - The Tax Mapping Division has the responsibility for the maintenance of the tax maps and for the preservation of the integrity of the identification numbering system. Tax map maintenance is defined as the technical revision of the tax map document, as differentiated from the care and storage of tax maps which subject was covered in the previous section. 1. System Elements Affected by Change. - Any one or all of the following assessment record forms may be affected by changes in (1) ownership; (2) value; or (3) land area: (a) Tax Map including Tax Map Control Roll (b) Property Identification Number 66

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(c) Tax Declaration (d) Assessment Roll (e) Real Property Field Appraisal and Assessment Sheet (FAAS) (f) Property Ownership Card (g) Tax Collection Record The Tax Mapping Division is responsible for recording changes in the first two (2) assessment record forms mentioned above. Changes affecting the other official records are the responsibility of other divisions. Revision of tax maps and the property identification numbering system occur as the result of changes in land area only. 2. Changes in Land Area. - There are four (4) kinds of land area changes which can possibly occur; they are (1) the subdivision of land (the division of land into smaller ownerships); (2) consolidation (combining two or more parcels thereby creating one large single ownership); (3) natural physical phenomenon (such as shifting of river courses); and (4) road and irrigation canal construction, etc. These land changes require revision of property identification number and sometimes revision of tax maps. All such changes will be reflected in new FAAS which shall be referred to the Tax Mapping Division and becomes the instrument which initiates appropriate action. 3. Protection of Tax Map Masters. – The best method of preserving and protecting original tax maps (tax map masters) from damage is to employ the extensive use of prints. Tax map masters should never be removed from their filing cabinets except for two (2) reasons: (1) for the purpose of making prints of them or (2) accomplishing their comprehensive revision. Only when a tax map section has been the subject of numerous changes (subdivisions, consolidation or natural phenomenon) rendering it illegible or not discernible, forcing a large scale, or similar situation, should a tax map master be revised. Two complete volumes of tax map book in print copies shall be prepared for the use by the Assessor's Office. These tax map books shall be kept in the Tax Mapping Division and their use are discussed as follows: (a) One Tax Map Book is to be used exclusively for the purpose of cross- referencing information from other information sources, such as cadastral lot numbers, benchmark locations, existing monuments, etc. Under no circumstances should this information be inscribed on tax map masters. The reason for this is quite simple. Tax maps must be kept as clear as possible for the purpose of rapid and accurate reading through the elimination of as much extraneous information clutter as possible. 67

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It is understandable that the Assessor may desire to chart cadastral and similar information, but the point is made here that it should be kept on a separate set of prints provided for this purpose and not on the tax map masters. (b) The second volume is to be used exclusively to record changes in land areas by inscribing the new property ownership boundaries as they occur. They may be best described as the "working" tax maps. It is this volume that is used by the Assessor's Office when dealing with the public on matters requiring map reference. It is in observing the condition of these prints that the decision is made when to revise or redraw the tax map master. Following the revision or reconstruction of the tax map master, the appropriate number of prints should be made and distributed, and the resulting new tax map master enters the files. 4. Property Index Numbering in cases of Parcel Subdivision or consolidation - In case of a land subdivision, into two (2) or more parcels, the PIN of the original parcel shall be retired while the newly created lots will be assigned consecutive numbers beginning with hw number following the highest parcel numbers. These are then indicated on the tax map and new tax declarations are prepared for each separate parcel. The appropriate PIN is then placed on the corresponding tax declaration, thereby, completing the tie-in between parcel and tax declaration, thus, maintaining the integrity of the property numbering system. Likewise, in cases of consolidation of two or more existing parcels into a single owner-ship, the original property index numbers of the parcels affected shall be retired and the resulting single parcel shall be assigned with a number next the highest parcel number in the section. The practice of retiring index numbers for subdivided or consolidated parcels provided a historical physical and owner-ship changes of the parcels involved.

MISCELLANEOUS PROVISIONS Tax Mapping Operations constitute the first of the several inter-related operations that must be undertaken in order to install a Real Property Tax Administration (RPTA) System. However, before the initial phase of tax mapping operations can begin, it is necessary that certain pre-requisite conditions shall be complied with and made in order to insure the success of the program. (a) When a particular parcel in a tax map is subdivided into numerous lots and if sketched therein becomes too small to reflect the required data and not discernible, the subject subdivision shall be drawn on a separate section and the parcels thereof shall be numbered accordingly. This section forms an additional tax 68

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map of the barangay and shall be given a section number next to the last section in the barangay. Notation shall be made on the original parcel, as "See Section(s)____". (b) No enlargement of parcel shall be reflected within a duly prepared tax map arising from subdivision, etc. To emphasize, the draftsmen should see to it that the scale used should be convenient before the finalization of tax map. (c) The revision of tax map(s) shall be made either after the year end or during general revision of property assessments. Revision of tax map refers to the assigning of new number of all parcels within an individual tax map, or section, or barangay, or district. In the case of revision for individual tax map, revision shall be allowed if 50% or more parcels in a particular tax map has been affected due to subdivision, and apparently making the parcel numbers cluttered or no longer discernible. (d) In case of real property whose owner is unknown, the name of the actual occupant shall be indicated in the line provided for "Administrator", which should be superimposed by the word "Occupant" including its address in order that any notices regarding the said property shall be sent thru the occupant. (e) As regards the extent of a road or an irrigation canal, which is yet owned by the registered owner, traversing a parcel of land, the boundaries of which shall be shown by a designated lines and the same shall be considered as a separate parcel. However, if the property owner insists in writing that the affected area be recorded as part of the said parcel, the same should not be deducted from the area of such land. Thus the same shall be an integral part of such land and still considered as one parcel. (f) When an easement, which restrict the use by the registered or declared owner, is granted over or through a parcel of land and annotated in the title certificate, the boundaries of which should be drawn in standard lines. Thus the same should be considered as a separate parcel. (g) Parcel of land traversed by barangay boundary line within a municipality or city, the portion that has a bigger area will bear the PIN of the subject parcel of land, provided, however, That annotation shall be made as illustrated hereunder: Barangay "A" "B"

Area 5,000 sq.m. 3,000 sq.m.

Assessed Value P1,000,000 600,000

(h) Two or more contiguous parcels of land owned by a single owner may be considered as one parcel if the property owner thereof insists/requested in

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writing to declare the same under one assessment for real property taxation purposes. (i) The extent of railroad track, which will be a closed figure, shall be considered as one parcel of land in every tax map. (k) Building that is standing on two or more lots will bear the PIN of the lot where the bigger area of said building is located. (l) The portions of a parcel of land that is traversed by a municipal or city boundary line shall constitute separate parcels in its respective LGU. (m) Adjacent boundaries such as section number, lot number and lines within a municipality or city shall be indicated on the tax map and to be shown by its standard designation and lettering. (n) Adjoining local government units, its boundary lines and names, shall be indicated in the tax map and to be shown by its standard designation and lettering. (o) When the mineral rights to a parcel of land are in different ownership with that of the surface right, the surface right shall possess the PIN of such parcel of land, and the mineral right should bear the same PIN of the surface right and a four (4) – digit number (such as 3001) will be added to it. Where the tax map is not yet installed in the LGU, the identification for real property unit (RPU) should be done through the series of transactions, in a manner wherein each RPU within the barangay in a municipality must be distinctly marked. 1. The marking shall correspond to the daily numbering of the transactions known as the Assessment of Real Property Number – ARP No. (Tax Declaration No.) based on the following illustration. In case of province: 01-000-00000 - refers to the 1st municipality after all the municipalities in the province shall have been arranged alphabetically and consequently numbered chronologically . 000 - refers to the designated number of barangay which should also be arranged alphabetically before they are numbered chronologically. However, Barangay Poblacion should always be assigned the number “001” and thereafter followed by the first barangay so arranged. 00000- refers to the series/numbers of daily transactions done consecutively until the last transaction and shall again start with 00001 when a General Revision of Assessment of Real Property (GRARP) shall be undertaken. 01

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In case of city: 01-000-00000 01 –

refers to district number after all the districts within the city shall have been assigned their respective number in pursuance of Section 3(b) hereof. 000 - refers to the designated number of barangay which should also be arranged alphabetically before they are numbered chronologically. However, Barangay Poblacion should always be assigned the number “001” and thereafter followed by the first barangay so arranged. 00000 - refers to the series/numbers of daily transactions done consecutively until the last transaction and shall again start with 00001 when a General Revision of Assessment of Real Property (GRARP) shall be undertaken. The entire office support operation as it relates to the real property tax administration program must be specifically budgeted in order that needed items will be on hand and ready for use when needed. Following are the items that will be needed and for which the budget should make special provisions: Drafting tables with adjustable tops Drafting tables Tracing tables Large map tables Desk and Chairs Map filing cabinets Filing cabinets Light tables Standard drafting and mapping instruments: Drafting Machine Pantograph Planimeter Scales (metric) Drafting Sets (Pens, compasses, etc.) Lettering sets Triangles T-squares Straight Edge Standard drafting and mapping supplies: Tracing Paper Drafting Film Ink Erasers Etc. 71

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Forms: (Sufficient quantities) FAAS Tax Mapped Control Roll Property Record Form Property Ownership Cards Tax Declaration Real Property Tax Order of Payment Accomplishment or Production Report Sheet The goal of the foregoing should be to provide adequate tools, equipment and supplies for each draftsman and technician in order that tax-mapping work may be expedited.

SECTION 5. - PREPARATION OF SCHEDULE OF FAIR MARKET VALUES Before any general revision of real property assessment is made pursuant to the provisions of Title II, Book II of the Local Government Code, there shall be prepared a schedule of fair market values by the provincial, city and the municipal assessors of the municipalities within the Metropolitan Manila Area for the different classes of real property situated in their respective local government units for enactment by ordinance of the sanggunian concerned. The Schedule of Fair Market Values shall be published in a newspaper of general circulation in the province, city or municipality concerned, or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two other conspicuous places therein. In case of Metropolitan Manila Area, the assessors of each district shall meet, discuss, compare and harmonize their respective schedule of values. The miscellaneous provision may contain a provision authorizing the assessor to classify, value and assessed real property independently of the schedule in cases where such real properties are not specifically included in the Schedule of Fair Market Value.

SECTION 6. – APPROACHES TO VALUE The three (3) approaches to value are: 1. Sales Analysis Approach 2. Income Capitalization Approach 3. Cost Approach A. Sales Analysis Approach: Sales Analysis Approach is often referred to as Market Data Approach. It is premised that the best evidence of value is valid sales data. It is based on the principle of substitutions. This approach involves direct comparison of the property being appraised to similar properties that have 72

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sold in the same or in similar market in order to derive a market value indicating for the property being appraised. Sales are transfers of rights of ownership in perpetuity. 1. Sources of Sales or Market Data: a.

Register of Deeds – it is the duty of the Register of Deeds to furnish the provincial or city assessor concerned with copies of all contracts conveying, leasing or mortgaging real property registered in his Office;

b.

Notary Public – it is the duty of a notary public to furnish the provincial or city assessor concerned with copies of all contracts conveying, leasing or mortgaging real property acknowledged before him;

c.

Classified Ads – offer for sales of bids of real property are advertised in the newspaper;

d.

Realtors – real estate appraisers, brokers, salesman, dealers, and bankers. Information or opinions on real estate values of such professionals are valuable for sales analysis. The assessor or his deputy may summon witnesses, and take disposition concerning the value of real property.

e.

Real property owners or administrators – Real property owners or administrators are required under the law to declare the true value of their real property under a sworn statement to be filed with the Office of the Assessor where the property is located.

f.

Interviews – Information from the parties involved in the sales transactions of real estate are valuable leads to value.

2. Analysis of Sales Transactions: The sales data to be considered in the sales analysis shall meet the following criteria: a.

Date of Transaction – The date of transaction must be reasonably near the assessment date. Sales transactions during the current year or the preceding year would serve good basis for the current market value;

b.

Type of Conveyance – The conveyance must represent a normal transaction; that is, whose which involved willing, able and wellinformed buyers and sellers;

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The following transactions do not reflect market value, hence, must not be considered in the sales analysis: 1. 2. 3. 4. 5.

Quitclaims Sheriffs Deeds Tax Deeds Transfer between relative or interrelated companies; Transfer involving non-residents or governmental jurisdiction; 6. Foreclosures; 7. Deeds of donation 8. Deeds of Exchange c.

Amount of Consideration – The amount of consideration reflected in the deeds must have the presumption of the true value of the property involved. It desirable to interview the parties involved in the transaction to check the accuracy of the amount of consideration reflected in the deeds. The interview must be done with utmost confidentiality to get cooperation from the persons concerned.

d.

Analysis of sales compared to property subject to appraisal:

Sale No. 1 2 3 4

_Price_

Date of Sale

Comparison with Property subject of Appraisal____

P250/sq.m. 220 310 370

5 yrs. ago 4 yrs. ago 2 yrs. ago 1 yr ago

Closely comparable Inferior Superior Closely comparable

Analysis: A study of the patterns indicated that: a. the sale prices of the closely comparable lots (Sale 1 & Sale 5) increased from P250 to P360 in four (4) years; b. Sale 2 tends to support Sale 1 as a fair price for that year; c. Indications show that the fair market value of the lot under appraisal is P360 per square meter;

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Rule: The general rule is that, the price of a closely comparable property sold at the most recent date is the one reflective of the market value of the property subject to appraisal. d. Abstraction Method Sales transaction sometime covered both land and improvement, say lot and building; building and machinery, etc. In this case, the value of the land or the improvement can be derived by deducting the value of the improvement to determine the value of the land or vice versa. Example: A house and a 300 square meter lot were sold at a total price of P150,000. 1. To determine the value of the lot, the value of the building may be determined by the cost approach, then deduct the same from the total price. If the replacement cost of the building referred above is P100,000, the value of the lot is P50,000 (150,000 minus P100,000); 2. To determine the value of the building, the value of the land may be determined by the sales value of closely comparative land, preferably adjoining land, then deduct the same kind has been recently sold at P165 per square meter, then the value of the building is P100,500 (150,000 minus 300 x P165).

B. Income Capitalization Approach: The Income Approach is based on the principle of anticipation reflected in the definition of value as the present worth of all the rights to future benefits accruing to ownership. The analysis of income often will serves as the best means of estimating the value of types of properties that are not frequently sold in the market but have definite income. A basic assumption of the Income Approach is that the value of an income producing property is no more that the return derived from it. The value of income capitalization rests upon the premise that future income capabilities determine the present value of property

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1. Steps involved in translating the net income Projection into a value indication (AIREA, The Appraisal of Real Estate) a. Estimate potential gross income; b. Estimate and deduct a vacancy and collection loss allowance to derive effective gross income; c. Estimate and deduct expenses of operation to derive net operating income (net income before recapture); d. Estimates remaining economic life of the duration and pattern of the projection income stream; e. Select an applicable capitalization method and technique; f. Develop the appropriate rate or rates; g. Complete the necessary computations to derive an economic value indication by the income approach. 3.

Capitalization Process a. Capitalization defined – Capitalization is the mathematical process which translates or converts net income into an indication of value. b. The formula to derive capital value may be expressed: I V= – Where: R V – Value I – Net Income Before recapture R – Capitalization rate

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Illustrations: Example 1: A 300 square meter commercial lot is rented at P5,000 a month . Determine its present value. Solution: 1. Gross Income (P500 x 12) 2. Less Expenses 3. Net Income 4. Divided by Capitalization Rate 5. Lot Value 6. Divided by Lot Area 7. Lot Value per square meter

= P 60,000.00 = 00.00 = 60,000.00 = 0.13 = 46,153.46 = 300 = P 1,538.46

Capitalization Rate: Interest rate prevailing in the area Tax based on Market Value (2% x 50%)

Example 2:

=

12%

=

1% 13%

Determine the present value of a 200 sq.m. lot where a 3-door residential apartment was constructed using the following assumptions:

a. Monthly rental per door – P600.00 b. Replacement cost of the building with estimated economic life of 33 years.

=P

90,000.00

=P

20,520.00

Solution (Land Residual Method): 1. Gross Income (P600 x 3 x 12) 2. Less 5% vacancy Allowance 3. Effective Gross Income 4. Less Expenses against building: a. Taxes (2% of 90,000 x .65) b. Insurance (2% of 90,000 x .6) c. Repair & Maintenance (5% of rent collection) d. Management charges

= P21,600 =

1,080

= 1,170 = 1,440 = 1,926

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.

(5% of rent collection) = 1,926 e. Depreciation (3% of 90,000) = 2,700 f. Interest on building investment (12% of 90,000) = 10,800 5. Net Income computable to land 6. Divided by capitalization rate 7. Residential Land Value 8. Divided by Lot Area 9. Lot Value per square meter

P = = = = =.P

18,162.00 2,358.00 0.126 18,714.28 200 93..52

Capitalization rate: Interest rate prevailing in the area Tax based on market vale Of land (2% x 30%)

=

12%

=

.6% ________ 12.6%

Example 3 (Building Residual Method): Assume that: a. Gross Income b. Land Value c. Actual Use d. Economic Life of bldg. e. Location

= = = = =

P100,00 for first year 200,000 Commercial 40 years Manila

Computation of the residual building value: 1. Gross income = P100,000 2. Less Vacancy & collection allowance (5%) = 5,000 3. Effective Gross Income __________________P95,000 4. Less Expenses (excluding interest amortization & taxes) say 25% _______________ 23,750 5. Net Operating Income _____________________ 71,250 6. Land Charges (P200,000x13.5%) _____________ 27,000 7. Income computable to building P44,250 8. Divided by Capitalization rate _______________ 0.166 _______ 9. Residual Building Value __________________P266,566.26 say: P266,570 =========

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Land Charge Rate: Interest of land cost Tax (3% x 50%)

__ __

12% 1.5% 13.5%

__ __ __

12% 2.1% 2.5% ========= 16.6%

Capitalization rate: Interest rate prevailing in the area Tax Based on Market Value (3%x70%) Depreciation (1/40)

Example 4. (Riceland): In leasehold agreement, the sharing of rice production, are 75% for the tenant and 25% for the landlord, all expenses charged to the tenant except taxes. Determine the value of a 2nd class unirrigated riceland: Solution: 1. Under Assessment Regulations No. 7-77 dated July 26, 1977 of the Ministry of Finance, the productivity of a 2nd class unirrigated riceland ranges from 47 to 63 cavans of palay per hectare. The midpoint of the range is therefore 55. 2. The share of the landlord of the production therefore (25% x 55)

=

13.75

3. Net income of the land is 13.75 times P65.00 (assumed price of palay per cavan) 4.Capitalization rate: Tax (2% x 40%) Interest rate

5. Capitalized Value per Hectare

=

____ .8% ____ 12% ____ 12.8%

P893.75 .128

79

=

P6,982.42, say P6,980 =====

P893.75

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C. The Cost Approach Basic to the cost approach is the Principle of Substitution; i.e. “No prudent person will pay more for a property than the amount for which more for a property than the amount for which he or she can obtain by purchase of a site and construction of a building without undue delay, a property of equal desirability and utility.” 1. Relation of Cost and Value: Costs represent a sacrifice, (that which is given up to obtain anything), or negative past income. Value depends upon future expected benefits. It is clear that there is no necessity for cost to equal value. 2. Reproduction Cost/ Replacement Cost Defined: a) Reproduction Cost/Replacement Cost – The cost of creating a building or improvement having the same or equivalent utility, on the basis of current prices and using current standards of material and design. It does not require that all features be reproduced, inasmuch as it assumes only equivalent services of not identical features. 3. Replacement/Reproduction Cost Illustrated 3.1 In 1992, a 520,000 family dwelling residential building was constructed at a total cost of P120,000 (assumed). In 2003, the same replica building was constructed on a lot located near the vicinity of the former at a total cost of P1,500,000. Therefore, the Replacement Cost New (RCN) in 2003, of the building constructed in 1992 was P1,500,000 (assumed). In other words, the cost of constructing the same replica of building in 2003 was 2.5 times than its cost in 1992. 3.2 A certain brand new electric generator was bought in 1992 at P300,000 (assumed). The same brand of generator is now sold (2003) at P1,500,000. The replacement cost of said generator is therefore P1,500,000. The accumulated allowable annual depreciation from 1972 to 1984 should be deducted from the replacement cost of P1.5M to determine the current market value of the old generator bought in 1972.

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SECTION 7. – PROCEDURES IN THE PREPARATION OF THE SCHEDULE OF FAIR MARKET VALUES A.

Legal Basis: 1. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures. – The procedure for approval of local tax ordinances and revenue measurers shall be in accordance with the provisions of R.A. No. 7160: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: 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: 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: 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. 2. Publication of Tax Ordinance and Revenue Measures. – (a) Within ten (10) days after their approval, certified true copies of all provincial, city and municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a newspaper of local circulation: Provided, however, Than in provinces, cities and municipalities where there are no newspapers of local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places.

B.

Technical Aspect: 1. A Schedule of Fair Market Values (SFMV) shall be prepared by the Provincial, City or Municipal Assessors of the municipalities in Metropolitan Manila for all classes of real properties within the local government units concerned before a general revision of assessment is conducted once every 3 years, reckoned from the first general revision conducted pursuant to Section 219 of R.A. 7160. 2. In the case of Metro Manila, the Assessors of the district shall meet, discuss and harmonize their respective schedules of market values. 3. The SFMV shall be prepared on the basis of standard approaches to value such as market sales, cost or income value with consideration to data gathered from mortgages, insurance, rentals and such other appraisal information available to the assessors and evaluated in the prescribed forms. 81

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4. Upon completion of the SFMV, the same shall be forwarded to the Sanggunian of the province, city, or municipalities in MMA for deliberation and series of public hearings. Within ten days after approval, the SFMV shall be published in a newspaper of general circulation for three consecutive days or in the absence thereof, in the local newspaper or be posted in the provincial capitol, city or municipal hall and in two other conspicuous places therein. 5. The approved ordinance on the SFMV for the general revision of assessment of real property shall include the legally approved assessment levels and the percentages of adjustments applicable to the market value.

SECTION 8. – DECLARATION OF REAL PROPERTY BY THE OWNER OR ADMINISTRATOR It shall be the duty of all persons, natural or juridical, owning or administering real property, including the improvements thereon, within a city or municipality, or their duly authorized representative, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of their property, whether previously declared or undeclared, taxable or exempt, which shall be the current and fair market value of the property, as determined by the declarant. Such declaration shall contain a description of the property sufficient in detail to enable the assessor or his deputy to identify the same for assessment purposes. The sworn declaration of real property herein referred to shall be filed with the assessor concerned once every three (3) years during the period from January first (1st) to June thirtieth (30th) commencing with the calendar year 1992.

SECTION 9. – DUTY OF PERSON ACQUIRING REAL PROPERTY OR MAKING IMPROVEMENT THEREON It shall also be the duty of any person, or his authorized representative, acquiring at any time real property in any municipality or city or making any improvement on real property, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of subject property, within sixty (60) days after the acquisition of such property or upon completion or occupancy of the improvement, whichever comes earlier.

SECTION 10. – DECLARATION OF REAL PROPERTY BY THE ASSESSOR When any person, natural or juridical, by whom real property is required to be declared under Section 6 hereof, refuses or fails for any reason to make such declaration within the time prescribed, the provincial, city or municipal assessor shall himself declare 82

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the property in the name of the defaulting owner, if known, or against an unknown owner, as the case may be, and shall assess the property for taxation in accordance with the provision of this Title.

SECTION 11. – RULES IN THE APPRAISAL AND ASSESSMENT OF REAL PROPERTY All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The appraisal of real property shall be based on the latest Schedule of Fair Market Values prepared by the Provincial Assessor, City Assessor or Municipal Assessor of Metro Manila Area (MMA) embodied in an Ordinance passed by the Sangguniang Panlalawigan, Sangguniang Panlungsod or Sangguniang Bayan of municipalities within Metro Manila Area. Appraisal of real property declared for the first time shall be listed, classified and valued on the basis of the SFMV (either for land or building), and shall be subject to back taxes (if applicable) of not exceeding ten (10) years from the year of initial assessment. Thus, the property shall be liable to tax payment for a maximum of eleven (11) years including the current year. The schedule of values applicable for the affected period shall be controlling. ILLUSTRATION: (A) Land - Declared in 2003. Assume all supporting documents are submitted. Basic Data: Area 10,000 square meters ConditionPlanted to fruit bearing tree SFMV 1993 P20.00 per sq. m. 1994 P50.00 per sq. m. 2000 P110.00 per sq. m.

COMPUTATION OF VALUE DESCRIPTION Orchard

AREA 10,000 sq.m. 10,000 10,000

ASSESSMENT LEVEL 40% 40% 40%

SFMV P20.00 50.00 110.00

ASSESSED VALUE P80,000.00 P200,000.00 P440,000.00 83

MARKET VALUE P 200,000.00 500,000.00 1,100,000.00 EFFECTIVITY 1991-1993 1994-1999 2000-2001

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! Requirements for the appraisal of land declared for the first time: 1. For Untitled Property: (a) A survey plan prepared by a duly licensed Geodetic Engineer preferably approved by Land Management Bureau of the Department of Environment and Natural Resources (DENR); (b) Certification from Community Environment and Natural Resources Office (CENRO), stating among other things, that the land is within alienable and disposable area; (c) Affidavit of ownership and/or Sworn Statement of Market Value of Real Property submitted by the owner/administrator; Affidavit that the applicant is in long, continuous and notorious possession of the property. (d) 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; (e) Ocular inspection/investigation report by the assessor or his authorized representative; (f) In cases of newly discovered land wherein the possessor/occupant whose rights can not be established, the foregoing requirements under (a) to (e) hereof, shall likewise apply; (g) In case of lands of the public domain occupied and possessed by National Cultural Communities prior to July 4, 1955, a certification from a government agency in charge of cultural communities, National Commission for Indigenous Peoples (NCIP) or other government agency, shall be submitted. (h) An untitled property being claimed by two or more persons whether natural or juridical should be issued two or more assessment of real property. 2. For Titled Property: (a) Certified true copy of free patent, homestead or miscellaneous sales must be submitted; (b) Certified true copy of the title issued by the Registry of Deeds, certifying among others, that the original copy of which is intact and existing in the said registry. 84

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(c) Approved survey plan A.

APPRAISAL AND ASSESSMENT OF LAND: A.1

Urban Lands Generally, market values of urban lands are enhanced by their proximity to commercial and government center, educational and religious institutions, highways and availability of water, electricity, telephone system and transportation facilities, as well as accessibility to good roads and avenues Residential lands are valuable if they are accessible to employment opportunities and shopping, recreational, educational and cultural centers. Value of commercial lands depends upon their access to suitable markets, while industrial lands are valuable if accessible to source of raw materials, roads, ports, electric power and labor. On the basis of these influences on value, residential, commercial, and industrial lands located within the contiguous urban areas of the city or municipality, may then be sub-classified into first, second, third or more classes, and schedule of base unit market value per square meter shall be determined and fixed for each sub-class. The number of subclasses for each class of the urban lands shall be left to the discretion of the provincial and city assessor, and the municipal assessors of the municipalities within the Metropolitan Manila Area depending upon the existing variations of value factors in such land. The criteria established herein, may vary or be modified to suite the actual physical developments and conditions obtaining in a city or municipality. However, lots located in the populous centers of barangays separate from the contiguous areas defined hereof may not be subclassified in accordance with the criteria herein referred to. A schedule of barangay street unit land value shall be established independently on the basis of the sales value as well as opinions on declared values of representative lots therein (1) Lands actually and principally used for residential, agricultural, commercial or 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 thru an ordinance by the Sanggunian concerned. (2) Lands located in areas of mixed land uses – 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 85

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classification, valuation and assessment thereof. If the predominant use is residential, all lands in that area shall be classified, valued and assessed as residential; if the predominant use is commercial or industrial, all lands in that area shall be classified, valued and assessed as such. (3) A lot or parcel of land classified and valued 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 classified, valued and assessed like similar lands in the locality. (5) Lands actually, directly and exclusively used for cultural or scientific purposes, located in residential, commercial or industrial areas shall be classified and valued as residential, commercial or industrial in accordance with the schedule of base market values determined on the basis of that schedule. (6) 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 areas shall, likewise, be classified and valued as residential, commercial or industrial in accordance with the schedule of base market values, and shall be assessed at ten per cent (10%) of the market values. (7) 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 shall govern the classification and valuation of those special classes of land and shall be assessed at the corresponding levels of assessment. (8) Lands actually, directly and exclusively used for religious, charitable or educational purposes located in residential, commercial or industrial areas shall be classified, valued and assessed as residential, commercial or industrial.

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(9) 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 residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification, valuation and assessment of those lands used for religious, charitable or educational purposes. ! Rules for Computing Values of Urban Lands: (a) The value of rectangular lots shall be computed as follows: (1)

(2) (3)

(4)

Rectangular lot within the standard depth - To find the value of a rectangular lot within standard depth, multiply base unit value by its area. Rectangular lot whose depth exceeds the standard. (Compare with Book) Rear (Interior) Rectangular Lot. – To find the value of a interior rectangular lot, extend first the two (2) opposite sides from a hypothetical rectangular lot supposedly formed by a combination of the hypothetical rectangular lot and the subject lot as in Rule I (b). This value less the value of the hypothetical rectangular lot computed also as in Rule I (b) is the value of subject rectangular lot.

(b) Triangular Lots (1)

(2)

Triangular lots with base on street. – To find the value of a triangular lot with base on street, first compute as a rectangular lot as in Rule I, then take two-thirds (2/3) of the resulting value. Triangular lot with apex on street. – To find the value of a triangular lot with apex on street, first compute as rectangular lot as in Rule I, then take one-third (1/3) of the resulting value.

(c) Trapezoidal Lot. – To find the value of a trapezoidal lot, compute the values of the rectangular and triangular portions separately, according to the rules hereof and take the sum of the computed values for the total value. (d) Irregular Lot. – Reduce the irregular lot to the nearest equivalent rectangular, triangular, trapezoidal sector and apply the abovestated rules for computation of lot values.

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(e) The established SFMV along a particular street in an urban area shall be controlling irrespective of the actual use.

ILLUSTRATION: Residential Land-SFMV - P1,500.00 per square meter Land Dimension: Width 10 meters Length 20 meters Area 200 square meter SFMV P1,500.00/square meter Market value P3,000,000.00 Assessment Level - 20% Assessed Value - P60,000.00

ILLUSTRATION: Commercial Land –SFMV - P500.00 per square meter Land Dimension: Width - 10 meters Length - 20 meters Area - 200 square meter SFMV - P1,500.00/square meter Market value - P3,000,000.00 Assessment Level - 50% Assessed Value - P150,000.00 • All Assessment Levels used herein are in accordance with the statutory provisions of R.A. 7160 which may vary in accordance with the local tax ordinance as specifically mentioned under the foregoing Section 1(6) hereof. (f) Appraisal by Stripping Method shall be adopted where the length of the land exceeds the established depth of 20 meters for residential areas, 30 meters for commercial areas, and 50 meters for industrial areas as determined by the local assessor. Suppose a residential lot 20 by 50 meters is located along a street whose schedule of base unit value is P20.00 and the standard depth for residential land in the locality is 20 meters.

Strip

1 2 3

Unit Value

% Value

Adj. UV

P20.00

100% 80% 60%

P20.00 16.00 12.00

Area (sq.m. ) 400 400 200 88

(Width Depth) 20x20 20x20 20x10

Value X P8,000.00 6,400.00 2,400.00

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NOTE: Subdivision Lots are not subject to Stripping Total . . . . . . . . 1,000 sq.m.

P16,800.00

ILLUSTRATION: Class of Land - Commercial Established Standard Depth - 30 meters Established Strip 2 strips Applied percentage of SFMV per Strip 1st Strip 100% 2nd Strip 80% Land Dimension: Width Length SFMV

-

20 meters 55 meters P1,5000.00 per square meter

1) Recomputed

STRIP 1ST

W 20

X

2nd

20

X

TOTAL

L 3 0 2 5

TOTAL AREA 600

SFMV X P1,500 (100%)

500

X P1,500 (80%)

1,100 sq.m.

MARKET VALUE P 900,000.00 600,000.00 P1,500,000.00

• Stripping method shall not apply to corner lots. • For lands bounded by 2 streets which are not considered corner lots, the higher street value shall be applied provided that the value per square meter for the last strip shall not be lower than the value per square meter of lots in the other street. (g) Corner lots shall be valued with percentage increment as determined by the local assessor in SFMV, provided that only the SFMV along the street with the highest value will be considered as the factor for the corner influence. Provided further that an alley or callejon shall not be a factor to increase/adjust the value of the land. (h) Adjustment for Frontage - Adjustment value for frontage shall be added to the valuation of all commercial lots fronting streets or roads. The same is derived by multiplying the length of frontage in linear meter by 50% of the unit base value thereof.

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A.2

Agricultural Lands The base unit market value per hectare prescribed in the schedule is multiplied by the area to arrive at its market value for different subclasses of agricultural lands. No provision in R.A.7160 for trees and plants and it is the kind of plants and trees that determine the classification and value of agricultural land. The aggregate value arrived at is subject to the applicable adjustment(s) expressed in percentage(s) for: (a) Type of road where the property is located or accessible, and (b) location of property such as distance from the public road, and from the poblacion or trading center. The computation of values begins with the determination of area(s) and productivity of the sub-classes of land or each sub-class within a parcel of land. In the case of a parcel of land utilized to various sub-classes, that is, rice, corn, coconut, etc. (if practicable, the boundaries of such sub-class be plotted or sketched on the map) and the corresponding area thereof shall be determined. Each area so derived at (check if it tallies against the total area of the lot) be multiplied by the applicable base unit market value. The resulting values for each sub-class so derived at are summed up to obtain the total base market value of the parcel. To arrive at a final value, the total base market value is modified by applying the adjusted percentage value, which is the difference of 100% (base market value) and total percentage adjustment for type of road serving the parcel and location of the property.

! ADJUSTMENT FACTORS – The following guides are recommended for percentage Adjustment on values for agricultural lands: (1) Type of Road

% Adjustment

(a) Provincial or National Road (b) For all weather Roads (c) Along Dirt Road (d) For no road outlet

--------- No Deduction --------- 3% Deduction --------- 6% Deduction --------- 9% Deduction

(2) Location: Adjustment Factor Distance in Kms. 0 to 1 Over 1 to 3 Over 3 to 6 Over 6 to 9 Over 9

Trading Center/Poblacion 0 -2% -4% -6% -8%

90

All Weather Road +5% 0% -2% -4% -6%

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Distance of property from all-weather roads, railroad stations, landing places along sea coast and from trading center or poblacion shall be measured from corner of the lot or parcel nearest to such road or center. All-weather road includes national, provincial, municipal and all other public roads traversable by trucks, cars and other forms of vehicles under any kind of weather. ILLUSTRATIONS: Assuming a five (5) hectare irrigated riceland, capable of producing 204 cavans of palay per hectare annually has a SFMV of P150,000.00 per hectare. Assume further that the riceland is over 3 kms. from all weather road and trading center or town proper.

Market Value Adjustments: a) along no road frontage b) kms from all weather road c) kms to trading center Total Percentage Adjustment % of Adjustment of Unit Value Adjusted Unit Value Area Market Value Assessment Level

Percentage Adjustment

SFMV

100%

P150,000.00

-9% -4% -2% -15% 85% P127,500.00 5 hectares P637,500.00 40%

! Values of improvement such as trees and plants shall be considered in the preparation of the schedule of values of land which is principally planted on the land. This conclusion finds support in the decided case entitled “Manila Railroad Company vs Aguilar” (35 Phil. 118), where the Supreme Court said: “when the land preferably intended for the raising of a given crop or for the planting of trees of a certain kind, although these or the crop be deemed improvements of the land they should not be appraised apart from the land as they are an integral part thereof and their value is inherent or forms a part of that of the land” ! Agricultural land convertible into urban subdivisions such as residential, commercial or industrial shall be classified, valued and assessed as agricultural until such time that they shall have been converted and developed into such subdivisions. This rule shall also apply to lands already approved by proper authorities as subdivision but have not yet been actually developed for the purpose.

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As soon as a portion of the subdivision is finally divided, converted and developed into residential lots, the same shall be valued and assessed like similar lots in the locality. Portions of the subdivision not yet developed and converted into residential, commercial or industrial lots shall be classified, valued and assessed as agricultural. Roads or streets in urban subdivisions, unless already donated or turned over to the barrio (barangay), municipality or city, shall be listed in the name of the subdivision owner and shall be valued on the basis of the cost of cementing, asphalting or paving them with gravel and sand per square meter. The roads or streets shall be assessed at the rate not exceeding the assessment level applicable to lands located in the subdivisions. A.3

Subdivision Lands Requirements: (a) Duly approved subdivision plan by the Land Management Bureau (LMB); (b) A copy of the authority to sell from the Housing and Land Use Regulatory Board (HLURB); (c) Certified true copies of the Transfer Certificate of Title (TCT) and/or summary of Certified List of individual TCTs issued indicating the TCT Number, Name of Owner, Lot Number and corresponding area; (d) Certificate of real property and transfer clearance issued and signed by the Provincial, City or Municipal Treasurer/authorized representative; and (e) Sworn Statement/Declaration of Current Market Value by the owner/administrator. (f) Approval of the subdivision project by the Local Sanggunian.

A.4

Timber and Forest Lands Timber and forest lands belonging to the Republic of the Philippines or any of its political subdivisions, the beneficial use of which have been granted to a taxable person, shall be subject to the real property tax. For this purpose, said lands shall be appraised and assessed yearly, at the market value of the marketable timber on the basis of the annual volume of timber “actually cut” from the operational area, during

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the preceding year regardless of the annual total “allowable cut” indicated in the lease agreement. A.5

Golf Courses Procedures in the Appraisal of Golf Courses Course development follows a reasonably well-established pattern including: A. B. C. D. E. F. G.

Land Acquisition Water Supply Provision Route Planning and Surveying Grading and Shaping Installation of Irrigation and Drainage System Seeding and Landscaping Slope Rating

The time necessary to complete development is usually from ten to twenty months depending upon timing of work in relation to seasonal weather patterns. The course developer can spend any amount of money to develop a course which may range from the example given below: TYPE A B C

PER HOLE 5M 3M 2M

Type A consists of 19 Holes and above Type B consists of 10 to 18 Holes Type C consists of 9 Holes and below In broad terms, golf courses can be categorized further by the topography of the surrounding area: (1) flat course located upon valley lands, (2) gently slopping courses located upon flood plains, (3) hilly courses located upon gently rolling and steeper sloping lands. Hence, the following additional cost may be considered:

Flat course Gently sloping course Hilly courses

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Per Hole P 500,000 700,000 900,000

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GOLF COURSE VALUATION CRITERIA: 1) LOCATION- Accessibility to the general public. Type and distance of road leading to and from the highway, secondary and make and width, whether concreted, asphalted, gravel road. 2) SIZE – Sufficient area to support a high-quality golf facility. Layout and appearance good. Tees and greens large enough (140 to 160 acres is considered an average size for a course). Acres to hectares x .40 x 160 =64 has. 3) Hectares to acres x 2.47 4) TURF - (Stratum of soil bound by grass and plant roots into a thick mat) Types of grasses, condition of turf overall maintenance and the quality of the playing surface. 5) SOIL – This rating considers the types of soil on the golf course and how well the soil can support a good playing surface. The soil’s ability to drain ground water and support natural hazards. 6) DRAINAGE – Establish area that drain well. Grass/trees grow well due to proper drainage. 7) HAZARDS – Enough hazards and bunkers make the course distinctive and challenging to play. Bunkers are used to outline greens, direct play or increase the strategic value of holes. 8) AMENITIES – Given to trees, shrubs, planted areas, cart paths, practice areas, lakes, ponds, views, etc. 9) WATERING SYSTEM – Whether the watering system is manual, semi-automatic, or fully automatic and whether the system uses quick-couple sprinklers, pop-ups or a combination. GOLF CHARACTERISTICS Golf Characteristics Location Size (adequacy of greens, tees and length) Turf Soil Drainage Hazard (bunkers, lakes and ponds Amenities (trees, shrubs, cart paths, etc.) Watering System Slope Rating Total Weight 94

% of weight 25 20 10 10 10 10 5 5 5 100%

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Example of Weighted Score Calculation Rating Location Size Turf Soil Drainage Hazards Amenities Watering System Slope Total Score

8 7 6 7 8 3 10

Weight 25 20 10 10 10 10 5 5 5 100%

Weighted Score 25 x 0.70 = 17.5 20 x 0.90 = 18.0 10 x 0.80 = 8.0 10 x 0.70 = 7.0 10 x 0.60 = 6.0 10 x 0.70 = 7.0 5 x 0.80 = 4.0 5 x 0.30 = 1.5 5 x 1.00 = 5.0 75.0%

Establish Golf Value per hole Example:

900,000.00 per hole 18 hole golf course P 900,000 x 75% = 675,000 x 18 = P12,150,000.00 ! For purposes of assessment, golf courses shall be classified on the basis of a duly enacted ordinance. A.6

Memorial Parks

The following are the requirements for the appraisal/assessment of memorial parks: (a) Memorial Park development plan, license to operate and license to sell; (b) Approval of the Memorial Park development plan by the Local Sanggunian. Saleable area as identified in the Master List; (c) List of saleable areas and sold plots as of the end of every year; (d) The aggregate area for the pathways, open spaces which remained in the name of the developer which are recorded in the permanent assessment record; and (e) Memorial Park the lots of which are still registered in the name of the owner/developer shall still be assessed and declared in its name and shall be classified as commercial. Lots already in the name of the buyer and actually used as burial ground shall be likewise assessed and classified as commercial and considered exempt. 95

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THE PRIVATE BURIAL GROUND COMMONLY KNOWN AS A MEMORIAL PARK SHALL BE CONSIDERED AS A COMMERCIAL LAND AND A WASTING ASSET. A.7

Reclassifying Land to Other Uses The following are the procedures in reclassifying land to other uses:

(a) Land converted into other uses, e.g. agricultural to residential, residential to commercial, made known to the assessor in writing by the owner shall be inspected for confirmation of the actual condition/use of the property; (b) A report of the actual condition of the property and the recommendation thereof should be rendered either by the responsible personnel of the Provincial Assessor’s Office or the Municipal Assessor not exceeding fifteen (15) working days after inspection in accordance with the policy as may be prescribed by the Provincial Assessor; (c) Among others, the report may contain, tangible land improvement, e.g. land leveling and compaction, construction of road networks, drainage and other relevant land amenities; (d) In all others cases, Local Finance Circular No. 3-92 dated September 11, 1992 and Local Finance Circular No. 1-98 dated December 15, 1998 shall be controlling in reclassifying agricultural land to non-agricultural uses the pertinent portions thereof is quoted hereunder: (Local Finance Circular No. 1-98 dated December 15, 1998 shall be controlling in reclassifying agricultural land to non-agricultural uses, pertinent portions thereof is quoted hereunder: “x x x”). (e) Duly approved Zoning Ordinance.

B.

APPRAISAL AND ASSESSMENT OF BUILDINGS:

The appraisal and assessment of buildings shall be in accordance with the approved SFMV and supported by the following: (a)

(b)

(c)

Copy of the approved building permit, building plan, and/or certificate of Completion or Certificate of Occupancy permit from local officials concerned; Notice of the date of inspection, if the owner/administrator is not around during the discovery; Report of inspection of the building/structure; and

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(d)

Accomplished affidavit of ownership or Sworn Statement of the market value of the property, in the absence of a building permit or Certificates required under Item (a) above. •

•

•

In case of two (2) storey building used both for residential and commercial or industrial purposes, the same shall be classified and valued in accordance with the Schedule of Basic Unit Construction Cost and shall be assessed on the basis of the principal and predominant use of the building. Historical or vintage building the life span of which had surpassed the estimated economic life shall be independently reassessed from the ordinary course of the established procedures. Bowling alleys shall be valued separately from the principal building but its appraisal shall form part of the whole, except the machinery, which shall be independently appraised and assessed.

B.1

Appraisal and Assessment of Buildings and Other Structures A. For the appraisal of building and other structures, the Schedule of Base Unit Construction Cost (SBUCC) refers to base unit cost per square meter including additional items, to be determined by the assessor should conform with the structural design, type and other amenities described under Sec. 401 R.A. No. 1096 otherwise known as the National Building Code of the Philippines. Types of Construction. - For purposes of this Manual, all buildings shall be classified or identified according to the following types: • • •

•

Type I – Type I buildings shall be of wood construction. The structural elements may be any of the materials permitted as follows: Nipa Houses and similar structures will fall under this type: Type II – Type II buildings shall be of wood construction with protective fire-resistant materials and one-hour fire-resistive throughout: Except, that permanent non-bearing partitions may use fire-retardant treated wood within the framing assembly. Type III – Type III buildings shall be of masonry and wood construction. Structural elements may be any of the materials permitted by this Code: Provided, that the building shall be one-hour fire-resistive throughout. Exterior wall shall be of incombustible fireresistive construction.

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STRONG MATERIALS: A) First group wooden structural framings, flooring, walls and G.I. roofing B) First group wooden structural framings, flooring, walls on the first floor, and tanguile walls on the second and G.I. roofing. C) First group wooden posts, griders, girsts, window walls and heads, apitong, floor joists and roof framing, tanguile floor and sidings and G.I. roofing. D) Third group wooden structural framings, floorings and sidings, and G.I. roofing. E) Same as “D” but structural members are sub-standard. •

Type IV – Type IV buildings shall be of steel, iron, concrete, or masonry construction. Walls, ceiling, and permanent partitions shall be of incombustible fire-resistive construction: Except, that permanent nonbearing partitions of one-hour fire-resistive construction may use fireretardant treated wood within the framing assembly. MIXED CONCRETE: A. Concrete columns, beams and walls – but wooden floor joists, flooring and roof framing and G.I. roofings; even if walls are in CHB, kitchen and T&B are in reinforced concrete slabs. B. Concrete columns and beams – but hollow blocks walls and G.I. roofings

•

Type V – Type V building shall be fire-resistive. The structural elements shall be of steel, iron, concrete, or masonry construction. Walls, ceiling, and permanent partitions shall be of incombustible fireresistive construction. REINFORCED CONCRETE: A) Structural steel and reinforced concrete columns, beams, the same as I-B. B) Columns, beams, walls, floors and roofs all reinforced concrete. C) Same as “B” but walls are hollow blocks reinforced concrete or tiles roofings. 98

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B. Extra Items as Component Parts of Buildings: 1. Carport ……………………

30% - 40% of Base Unit Value plus additional for finishings of materials used.

2. Mezzanine ………………..

60% of Base Unit Value plus additional for finishings of materials used.

3. Porch ………………..…….

30% - 40% of Base Unit Value plus additional for finishings of materials used.

4. Balcony ……………..…….

45% of Base Unit Value plus additional for finishings of materials used.

5. Garage ……………….……

45% of Base Unit Value plus additional for finishings of materials used.

6. Terrace: Covered ………

Open …………..

35% - 40% of Base Unit Value plus additional for finishings of materials used. 20% - 40% of Base Unit Value plus additional for finishings of materials used.

7. Roof Deck: Penthouse ……..

70% - 100% of Base Unit Value plus additional for finishings of materials used. Covered ……….. 60% of Base Unit Value plus additional for finishings of materials used Open ………….. 30% of Base Unit Value plus additional for finishings of materials used.

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8. Basement: Residential …….. 100% of Base Unit Value plus additional for finishings of materials used. High Rise-Bldg. plus 120% of Base Unit Value plus additional for finishings of materials used. 9. Pavement……………………. Tennis Court ….. 300 – 360 per sq. meter Concrete ………. 10 cm. thick …….. 150 per sq. meter 15 cm. thick ……. 210 per sq. meter 20 cm. Thick …… 270 per sq. meter Asphalt ……….. 1 course ………… 140 per sq. meter 2 course ………… 180 per sq. meter 3 course ………… 240 per sq. meter

10. Floor Finishes ……………………... a. b. c. d. e. f. g. h. i. j. k. j.

Marble Slabs ………………. 400 - 500 per sq. meter Marble Tiles ………………. 280 – 320 per sq. meter Crazy Cut Marble …………. 250 per sq. meter Granolithic ………………… 220 per sq. meter Narra ………………………. 240 per sq. meter Yacal ………………………. 240 per sq. meter Narra/Fancy Wood Tiles ………………… 240 per sq. meter Ordinary Wood Tiles ……………………….. 240 per sq. meter Vinyl Tiles ………………… 220 per sq. meter Washout Pebbles ………….. 200 per sq. meter Unglazed Tiles …………….. 220 per sq. meter Granite ……………………. 3,500 per sq. meter

11. Special glass panels/sidings

100

4,000

per sq. meter

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12. CHB Fence………………………… With Steel Gate………... 250-400 per sq.meter With Finishing ………… 400-550 per sq.meter With Iron Grills ……….. 550-800 per sq.meter NOTES: 1) All the Base Unit Values herein indicated are not controlling and the same may vary depending upon the schedule of Unit Value enacted by the Sanggunian concerned. The foregoing rule shall not apply to Parking Spaces or garage of high rise buildings which shall be appraised and assessed on the basis of the base unit construction cost of the building plus additional provisions depending on the type of finishings. 2) Percentages (%) may vary. 3) DEFINITION OF TERMS: (a) Carport – an open-sided roofed automobile shelter that is usually formed by extension of the roof from the side of a building. (b) Garage – a building or compartment of a building used for housing an automotive vehicle. (c) Terrace – a relatively level paved or planted area adjoining a building and in formal settings often surrounded by a balustrade. (d) Balcony – a usually unroofed platform projecting from the wall of a building, enclosed by a parapet or railing, and usually nesting on brackets or consoles. (e) Porch – a covered entrance to a building usually with a separate roof and often large enough to serve as an outdoor seating or walking space ILLUSTRATION : One family single detached one-storey house with basic information as follows: Structural design Bungalow Type III Foundation Reinforced Concrete Roofing - G.I. Sheet Dimension: (House core 6.00 meters x 10.00 meter) Master Bedroom with 18.00 sq.m. Toilet and Bath 8.00 sq.m .One Bedroom 12.00 sq.m. Toilet and Bath 6.00 sq.m. Family Hall 16.00 sq.m.

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COMPUTATION OF VALUE: DESCRIPTION

AREA

Master Bedroom 18.00 One Bedroom 12.00 2 Toilets & Baths 14.00 Family Hall 16.00 2nd Floor Total 60.00sq. m. Add: Market Value Ground Floor TOTAL MARKET VALUE Assessment Level ASSESSED VALUE

UNIT VALUE Php 4,000.00 Php 4,000.00 Php 4,000.00 Php 4,000.00

Percentage Adjustment + 20% + 20% + 10% + 20%

ADJUSTMENT MARKET VALUE Php 86,400.00 57,600.00 61,600.00 76,800.00 Php282,400.00 432,000.00 Php714,400.00 25% Php178,600.00

NOTE : For three or more storeys, the same procedures in valuation shall apply, provided that when the materials and amenities differ including but not limited to quality and design of fixtures, etc., appropriate adjustments either plus or minus percentage on the basic SFMV have to be made. C.

A duplex, apartment/row houses shall be valued per unit and the aggregate appraisal shall be indicated as the value of whole, whether the structural design, materials used differs or typical for proper identification, reference and adjustment in case of segregation of the units.

ILLUSTRATION : A Two-storey duplex with typical semi-concrete for ground floor, 1st floor cement flooring with vinyl tiles, 2nd floor colored cement, G.I. roofing, etc. Dimension: Unit A Width Length Toilet & Bath Open Patio

-

4.00 meters 8.00 meters 6.00 meters 6.00 meters

Type IV – Building Basic SFMV - (1st Flr.) – Php5,800.00 per square meter Basic SFMV - (2nd Flr.) – Php4,500.00 per square meter Add on: - 5% on basic SFMV for vinyl tiles

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COMPUTATION OF VALUE: DESCRIPTION

AREA

UNIT VALUE

PERCENTAGE ADJUSTMENT ADJUSTMENT MARKET VALUE

1st Floor 32.00 Php5,800.00 Toilet & Bath 6.00 Php 5,800.00 Open Patio 6.00 Php 2,000.00 1st Floor Market Value

+ 5%

Php194,880.00 34,800.00 12,000.00 Php241,680.00

Add: 2nd Floor

32.00 Php4,500.00 Market Value Unit A Add: Market Value Unit B TOTAL MARKET VALUE Assessed Level ASSESSED VALUE Say

Php144,000.00 Php385,680.00 385,680.00 Php771,360.00 39% Php231,408.00 Php231,410.00

ILLUSTRATION : A building with three or more fix adjoining units, e.g. apartment, row houses or town houses shall be valued similar with the valuation of a duplex. Differences in SFMV that maybe attributed due to Type, structural design, quality of materials used and other fixtures inside and outside the building. Assume that in Illustration 15.1, the identical/replica units are four instead of two, the valuation would be: Unit A Market Value Unit B Market Value Unit C Market Value Unit D Market Value (or Php385,680.00 x 4 units) Market Value Assessment Level ASSESSED VALUE

B.2

-P

385,680.00 385,680.00 385,680.00 385,680.00 - Php2,742,720.00 40% - Php1,097,088.00

Assessment of Buildings and Other Structures (1) Buildings used exclusively for residential purposes shall be classified and valued in accordance with the schedule of base unit construction cost, and shall be assessed by applying the corresponding assessment levels fixed by ordinances of the sangguniang panlalawigan, 103

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panlungsod or the sangguniang bayan of a municipality within the Metropolitan Manila Area. (2) A building used both for residential and commercial or industrial purposes shall be classified and valued in accordance with the schedule of base unit construction cost and shall be assessed on the basis of the principal and predominant use of the building. (3)

Special properties (buildings and other improvements) a.

Building and other improvements actually, directly and exclusively used for hospital, cultural or scientific purposes shall be classified and valued according to the schedule of base unit construction cost, and shall be assessed at 15% of their depreciated market values. b. Buildings owned by local water districts and governmentowned or controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power shall, likewise be classified and valued in accordance with the schedule of base unit construction cost, and shall be assessed at 10% of their depreciated value.

(4)

Churches, parsonages, convents, mosques and buildings and other improvements used actually, directly and exclusively for religious, charitable or educational purposes shall be classified and valued in accordance with the schedule of base unit construction cost, if applicable, otherwise on the basis of their replacement cost as of the year of appraisal, and shall be assessed as residential on the basis of their depreciated values.

(5)

Buildings and other improvements owned by the Republic of the Philippines or any of its political subdivisions shall be classified, valued and assessed like similar buildings and improvements in the locality. If the buildings and improvements are of a kind not covered by the schedule of base unit construction cost, they shall be valued at their fair market value at the time of appraisal and shall be assessed like similar buildings and improvements in the locality.

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B.3

Assessment of Multi-Storeys or High Rise Buildings The following are the procedures in the appraisal and assessment of Multi-Storeys or High Rise Buildings (a)

Multi-storeys or High Rise buildings should be appraised in a similar manner shown in the preceding illustration, provided, however, that in case the building is built under R.A. 4726 (Condominium Act), each unit or separate interest and the common areas shall be independently appraised and assessed.

ILLUSTRATION: A 10 storeys Commercial building owned by a Corporation erected on a 1,000 square meter parcel of land. Building Dimension: Width 20 meters Length 30 meters 10-Storey Building Basement Gross Area 600 square meters Open Parking Area 400 square meters Foundation Reinforced Steel Concrete Space for one elevator shafts 4.00 square meters 4.00 sq. meters x 4 elevators = 16.00 square meters All Floors Reinforced Steel Concrete Ground Floor – Granite Exterior Walls – Reinforced Concrete w/ colored glass paneling All Other amenities – 1st Class RECAPITULATION OF THE AREA & COMPUTATION OF VALUE: Total Land Area Building Ground Floor Area Space for elevator shaft DECRIPTION

AREA

Foundation Basement Ground Floor 2nd Floor rd 3 to 10th Floor

600 584 584 584

-

1,000 square meters 600 square meters 16 square meters

UNIT ADJUST VALUE -MENT Php1,000 15,000 15,000 + 2,000 15,000 + 1,000 (replica of 2nd Floor)

NO. OF UNITS 10 1 1 8

Add: parking Space 400 sq. m. @ Php5,000 MARKET VALUE Assessment Level ASSESSED VALUE 105

MARKET VALUE Php6,000,000.00 8,760,000.00 9,928,000.00 9,344,000.00 74,752,000.00 Php108,784,000.00 2,000,000.00 Php110,784,000.00 80% Php88,627,200.00

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ILLUSTRATION: Assume that the 10-storey building in the preceding illustration was constructed under R.A. 4726, the Condominium Act Assume further that the ground floor and 2nd floor were sold to a Corporation for its sole use, while the 3rd to 10th floors are divided into ten (10) separate units, composing of 40.00 square meters each. Common areas are provided from the ground floor up to 10th floor. RECAPITULATION OF SEPARATE AND COMMON AREAS:

DESCRIPTION

SEPARATE UNIT

Ground Floor 4 Elevator shafts spaces and alleys Space for stairway Alley to elevator and Stairway 2nd Floor 4 Elevator shafts spaces and alleys Space for stairway Alley to elevator and Stairway

566 square meters 16.000 square meters 6.00 square meters 12.00 square meters 566 square meters 16.000 square meters 6.00 square meters 12.00 square meters

TOTAL AREA 3RD Floor 4 Elevator shafts spaces and alleys Space for stairway Hallways, terrace, etc.

1,132 SQ. METERS 400 square meters

TOTAL AREA

400 SQ. METERS

DESIGNATED FLOOR 3RD 4th 5th 6th 7th 8th 9th 10th TOTAL

COMMON AREA

68.00 SQUARE METERS

16.000 square meters 6.00 square meters 166.00 square meter 188.00 SQUARE METERS

NO. OF UNITS

TOTAL AREA SEPARATE UNIT

TOTAL COMMON AREA

10 10 10 10 10 10 10 10 80

400 Square meters 400 400 400 400 400 400 400 3,200 square meters

188 square meters 188 188 188 188 188 188 188 1,504 square meters

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NOTE: •

Depending upon the enabling or master deed of the Condominium project, each separate unit should be appraised independently, whether or not the Condominium Certificate of Title is in the name of the corporation or individual person.

•

Each separate unit shall have the same Unit Base Value. Number of rooms, toilet and bath and other internal amenities are important factors to consider for higher valuation.

•

The common area in the building should be appraised and assessed in the name of the Condominium Corporation or Association.

•

In case of indivisible portions of the Condominium building such as corridors, lobby, stair etc. shall be considered as common areas or common elements and shall be appraised and assessed as such.

•

Town house shall also be appraised and assessed in accordance with the abovementioned provisions on condominiums.

•

The capital equipment such as machinery, elevators, water pumps and tanks of the condominium project shall be listed and assessed aggregately in the name of the Condominium Corporation or Association.

•

Parking Spaces not sold to respective unit owners in the building shall be considered as common areas, assessed and declared in the name of the developer-owner or Condominium Corporation or Association of the condominium building for taxation purposes. B.4

Appraisal of Buildings and Other Structures Previously Valued and Assessed (a)

Building and other structures subject to reappraisal and reassessment must be revalued in accordance with the current Schedule of Base Unit Construction Cost (SBUCC).

(b)

The loss in value or depreciation due to physical, functional or economic obsolescence must be considered in one application, or a combination of two or all of the three methods depending upon building condition.

(c)

Since depreciation is definite to occur in any man-made structure due to use, degree of maintenance, changing economic conditions and several obtaining factors, the rule on RCNLD must be consistently applied every time a reappraisal is made.

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ILLUSTRATION: Physical Depreciation (Wear and Tear) – Straight Line Method Assume the building (house) in Illustration 16.1 was constructed in 1994. Only minor repair made Estimated Economic Life 25 years New SBUCC for 2000 Php6,000.00 per sq. m. COMPUTATION OF VALUE DESCRIPTION Two-Bedrooms Living Room Dining & Kitchen Toilet & Bath Open Terrace & Carport Total Reproduction Cost New Less: Depreciation (6/25=24%) Market Value (Rev.) Assessment Level

AREA (SQ. M.)

UNIT VALUE

18.00 16.00 17.00 9.00

Php6,000.00 6,000.00 6,000.00 6,000.00

30.00

3,000.00

PECENTAGE ADJUSTMENT + 20% + 30% + 30% + 10%

ADJUSTED MARKET VALUE Php29,600.00 124,8000.00 132,600.00 59,400.00 Php446,400.00 90,000.00 Php536,400.00 128,736.00 407,664.00 20% 81,532.00 Php81,530.00

ASSESSED VALUE (d)

Loss in value if applied, due to functional obsolescence shall be categorized and measured into curable or incurable deterioration. Curable if the functional obsolescence can be remedied by the introduction of improvements that will not affect the structural base of the building otherwise it is incurable.

(e)

Loss in Value due to Economic obsolescence regarded as incurable shall be measured by sales comparison or rent loss.

(f)

A Depreciation Table developed to rationalize the degree of maintenance, e.g. Poor, Average or Excellent must be in consonance with the model shown in Appendix ________.

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B.5

1st 5yrs 2nd 5yrs 3rd 5yrs 4th 5yrs AFTER 20 YRS RESID UAL VALUE

Schedule of Depreciation:

I-A

I-B

I-C

II-A

II-B

II-C 3.0% 2.5% 2.5% 2.0% 2.0%

III-AB 4.0% 3.5% 3.0% 2.5% 2.0%

III-CD 4.0% 3.6% 3.2% 3.0% 2.5%

1.8% 1.4% 1.2% 1.0% 1.0%

2.0% 1.8% 1.5% 1.2% 1.0%

2.2% 2.0% 1.7% 1.3% 1.1%

2.4% 2.2% 2.0% 1.7% 1.4%

2.6% 2.3% 2.2% 2.0% 1.6%

40.0%

40.0%

37.0%

35.0%

33.0%

IV 5.0% 4.0% 3.4% 3.0% 3.0%

30.0%

28.0%

20.0%

15.0%

In the excess of the above rate of annual depreciation, bigger rate may be granted for extra-ordinary causes, if properly presented and described as in the case of the following: 1) 2) 3) 4)

C.

Damage due to catastrophy (earthquake, fire, deluge) Heavily damaged due to pest (termite, anay or pest) Established defects of construction. Obsolescence

APPRAISAL AND ASSESSMENT OF MACHINERY: Appraisal and Assessment of new machinery installed and fully operational as discovered by the assessor or his representative or reported by the owner/administrator, shall be supported by the following: (a) Certified list of machinery indicating the acquisition cost, as supported by consular invoices, in case of imported machinery and plain invoices/receipt, in case of locally manufactured machinery, date of acquisition, date of actual operation, including freight, insurance, brokerage, bank and other charges, handling and installation costs, etc. including the model, serial number, quantity/pieces, horse power/capacity and country of origin, if imported; or (b) Information from the Bureau of Customs, Securities and Exchange Commission, Banks and other agencies for reference in confirming the value of the machinery; and (e) Notice of the date of inspection, if the owner/administrator is not around during the discovery; (f) Report of inspection of the building/structure; and

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(g) Accomplished affidavit of ownership or the Sworn Statement of the market value of the property, in the absence of a building permit or Certificates required under Item (a) above. (1) The appraisal of machinery shall be based on its actual cost which include the acquisition cost, freight and insurance charges, brokerage, arrastre and handling, customs duties and taxes, transportation, handling and installation charges, among others, to the site. (2) To support the actual cost, the declared value or sworn statement from the owner or responsible officer in case of a corporation, shall be secured to form an integral part of the appraisal report. (3) The imported brand new machinery, the market value should be based on its acquisition cost; which cost shall be that with the actual cost to the owner and when the same is not yet depreciated and appraised within the year of its purchase, plus the cost of freight, insurance, bank and other charges, brokerage, arrastre and handling, duties and taxes, plus cost of inland transportation, handling and installation charges at the present site. The cost in foreign currency shall be converted to peso cost on the basis of foreign currency exchange rates fixed by the Bangko Sentral ng Pilipinas (BSP). By the expressed provision of the Code, the acquisition cost of the machinery should be based on the actual cost to the owner when it was acquired. Further, the cost in foreign currency should be converted to average exchange rate then prevailing. (4) In all other cases the cost in foreign currency of imported machinery shall be converted to peso equivalent based on exchange rates fixed by the BSP, at the time of acquisition, and applied a depreciated allowance of not exceeding 5% per year.

FMV = AC x FERAC WHERE: AC = Acquisition Cost FERAC = Foreign Exchange Rate at time of Acquisition (5)

In case of doubt of the declared value of machinery, confirmation has to be made by securing documents from Bureau of Customs (BoC), Bureau of Internal Revenue (BIR), Securities and Exchange Commission (SEC) and other agencies of the government.

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ILLUSTRATION: Assume that in 1999, several pieces of machinery worth US200, 000.00 was installed in a factory building. Freight and insurance charges were US20,000.00. Peso expenses for brokerage, arrastre and handling, customs duties, etc., amounted to PhP2,000,000.00 Appraisal could be: US200,000,[email protected] = Php 9,830,000.00 US20,[email protected] = 983,000.00 Brokerage, arrastre, etc. = 2,000,000.00 Market Value = Php12,813,000.00 Assessment Level = 80% ASSESSED VALUE = Php10,250,000.00 NOTE: • Indicated figures are rough estimates. • The declared value of the owner, subject to confirmation by the assessor, is controlling. (h)

Reappraisal of machinery by RCNLD shall be based on the formula established for the purpose.

FORMULA: RCNLD=OC x FC2 / FC1 x REL / EL Where: RCNLD OC FC1 FC2 EL REL

= = = = = =

Reproduction/Replacement Cost New Less Depreciation Original Cost (or Acquisition Cost) Foreign Currency Exchange Rate Time of Acquisition Foreign Currency Exchange Rate during Reassessment Economic Life Remaining Economic Life

ILLUSTRATION : Assume that a machinery from U.S.A. was acquired, installed and in operation in February 1995 at total original cost of converted P10,000,000.00. Reappraisal was made in December 1999 to take effect in 2000. Dollar Exchange Rate at the time of operation – P25.0282 to 1.00 dollar Dollar Exchange Rate at the time of appraisal – P40.6232 to 1.00 dollar Estimated Economic Life – 30 years 111

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RCNLD

= = = say Assessment Level ASSESSED VALUE SAY

10,000,000 x 40.6232 / 25.0282 x 26 / 30 10,000,00 x 1.6231 x .08666 P14,065,784.00 P14,065,780.00 80% P11,252,627 P11,252,630.00

(5)

An annual rate of depreciation shall be applied to the machinery, provided that the formula provided for in paragraph F hereof shall be observed and provided further that major expenses to recondition the same and extending its life span shall be capitalized and added to the depreciated value.

(6)

Depreciation Allowance for Machinery – The depreciation allowance shall be made at a rate not exceeding five percent (5%) of its original cost or its replacement or reproduction cost, as the case may be, for each of use: Provided, however, that the remaining value for all kinds of machinery shall be fixed at not less than twenty percent (20%) of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation.

(i)

If the machinery has reached its maximum economic life, the 20% residual value shall be applied against the last current Market Value determined during the last general revision which shall be maintained for so long as the machinery is serviceable and in operation.

(j)

Appraisal of Elevated Rail Track and Road shall be based on cost approach or income approach whichever is applicable the total market value of which shall be apportioned or pro-rated to the local government units they traverse.

(k)

Appraisal of Transmission Lines, Transmission Tower, Cell Sites and the likes shall be assessed like all other machineries and taxes thereon paid in the local government unit where they are constructed. Transmission lines including the posts be assessed on the basis of its total value using the cost or income approach and the total market value shall be apportioned or pro-rated to the local government unit where these lines traverse.

(l)

Appraisal and assessment for submerged pipe lines for natural gas and water shall be assessed on the basis of the cost or income approach, the total market value thereof shall be apportioned or pro-rated to the local government unit they traverse.

(m) Appraisal for Heavy Equipment being used and operated in Timberland area and Mineral Land shall be assessed on the basis of the cost approach in the local government unit where they operate. In cases where they operate in more

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than one local government unit, the market value thereof shall be apportioned or pro-rated among local government units. (n)

Appraisal for standby generators, airconditioners, reservoir, dams, tailings pond, pier, wharf. Standby generators and other equipment shall not be assessed. Reservoir, dams, tailing ponds, pier and wharf shall be assessed on the basis of the cost approach. Provided however, that the cost of the piling of port must be given additional consideration.

SECTION 12. - REASSESSMENT DUE TO GENERAL REVISION. Reassessment of real properties covered by general revision shall be strictly made in accordance with the approved SFMV. (a)

Individual property adjustments of SFMV should be consistently enforced;

(b)

Stripping of land beyond the established standard depth for a particular class of property shall be adhered to;

(c)

For lands bounded by two parallel streets, the value of the last strip should not be lower than the market value per square meter of the abutting street; and

(d)

Application of adjustments based on factors not specified in the SFMV, such as but not limited to the shape, topography and blighted status adversely affecting the value of the property being assessed, should be applied;

(e)

In case of buildings, machinery and other structures, already covered by the existing assessment, reproduction/Replacement Cost New Less Depreciation (RCNLD) approach shall be applied.

(f)

All assessments or re-assessments made after the first (1st) day of January of any year shall take effect on the first (1st) day of January of the succeeding year: Provided, however, That the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or any other abnormal cause, shall be made within ninety (90) days from the date any such cause or causes occurred, and shall take effect at the beginning of the quarter next following the reassessment; Provided further, that real property declare for the first time shall be assessed for the taxes for the period during which it would have been liable but in no case for more than ten (10) years prior to the date of initial assessment: Provided, however, That such taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period. If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the 113

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owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid.

SECTION 13. ISSUANCE OF TAX DECLARATION ON TRANSFERRED REAL PROPERTY The following are the basic requirements for the issuance of tax declaration of transferred real property: A. For Untitled Property (a) Copy of the Deed of Conveyance duly registered in the Registry of Deeds; (b) Copy of realty tax clearance or official receipt from the Local Treasurer; (c) Copy of transfer tax receipt; (d) Certificate of payment of appropriate BIR taxes; (e) A sketch plan of the property preferably prepared by a Geodetic Engineer; and (f) A sworn statement of the market value of the property filed by the transferee. B.

For Titled Property: (a) A duplicate copy or a certified copy of the Deed of conveyance duly registered in the Registry of Deeds; (b) A certified copy of the Transfer Certificate of Title; (c) Copy of the realty tax clearance or official receipt issued by the local treasurer; (d) Copy of the Official receipt of Transfer Tax; (e) Certificate of payment of appropriate BIR taxes; and (f) A sworn statement of the market value of the property as far as practicable.

C.

Requirements for the transfer of building, machinery and other structures. 114

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(a) A certified copy of the Deed of conveyance. (b) A certificate of realty tax payment or official receipt issued by the local treasurer as well as the copy of the Official Receipt of Transfer Tax. (c) Certificate of payment of appropriate BIR taxes.

SECTION 14. – EXEMPTION FROM THE REAL PROPERTY TAX The following are exempted from real property tax: A. Constitutional provisions - Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, and non-profit cemeteries, and all lands, buildings and improvements actually, directly and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation. B. Statutory provisions 1. Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. The exemption shall cover properties owned by the Republic of the Philippines and those of constitutionally declared political subdivisions such as provinces, cities, municipalities and barangays which are owned in a patrimonial or private character, the beneficial use of which has not been granted, for consideration or otherwise, to a taxable person. (a) Under this provision, real property owned by the Republic of the Philppines, or any of its political subdivisions (Provinces, cities, municipalities and barangays) shall be declared taxable in the name of the grantor or grantee, refers to their patrimonial or private properties under Article 421 and 423 of the Civil Code and excludes real property for public use and for public service, which are beyond the commerce of man; and to lands of public domain granted, sold or leased under Com. Act No. 141 and the Forestry Laws. (b) "Private or patrimonial property of the state" is a property over which the State has the same rights as private individuals in relation to their own property, subject only to the administrative laws and regulations in the exercise of such rights. (c) Public lands may be declared as private property of the state as soon as they are available for the alienation or disposition, such 115

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alienation or disposition of public lands for agricultural, residential, commercial, industrial and other similar purposes, and for reservation for town sites and for public and quasi-public uses. (d) "Private property of provinces, cities and municipalities" are those other than property for public use consisting of roads, streets, the squares, public waters, promenades, and public works for public service paid for provinces, cities and municipalities. (e) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively used for religious or charitable or educational purposes. 1. "Charitable institutions" are those whose "principal aim is to give of its material substance or time to benefit those who are in need of such gift or expenditures in some other way than simply by an improvement of morals or bringing to them under the influence of the gospel." 2. "Church" is a building set apart for public worship; a place of worship of any religion. 3. "Parsonages", as derived from American usage, must be read, not in a technical or an ecclesiastical sense, but in the broad meaning of a ministerial residence used in connection with any place of worship of any denomination. It should include the house appurtenant to a cathedral, to a synagogue, or to a country-meeting house. 4. "Convent" includes not only the land actually occupied by the building, but also the adjacent ground or vegetable garden destined to the incidental use of the parish priest in the ordinary life. It is also defined as "a monastery or nunnery. "Nunnery, is defined as a house or building in which a body or community of nun reside." 5. "Mosque" is an Islamic place of public religious worship. 6. The term "cemetery" for purposes of tax exemption, should be construed as "an area or place where the dead are buried, a place of burial place set apart either by municipal authority or private enterprises for the interment of the dead, etc., and this includes whatever property is necessary for use of the cemetery such as paths, ornamentation and the land 116

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within the cemetery limits acquired for but not yet actually used for the burial of the dead. 7. “Nonprofit cemetery" is one owned and operated by the government, by religious corporations, by associations and societies exclusively for its members and not for profit. In the case of memorial park, which is a privately owned cemetery, developed and operated for profit and considering that lots/plots within that park although sold and used as burial grounds, are still part of a privatelyowned cemetery operated for profit, thus, shall be classified as commercial. However, exempt shall apply on plot(s) which is owned by a single person, actually occupied by the dead person. 8. “Exclusively used" means the primary or inherent use and does not preclude such incidental uses as are directly connected with, essential to, and in furtherance of the primary use. To illustrate, the primary use of a building may be for the purpose of a charitable or religious or educational institution, so that the exemption is not wholly or partly lost because on occasion the building or part of it is used for social purposes or let out to others for entertainment. 9.

Religious purposes means a use of such property by a religious society or body of persons as a stated place for public worship, Sunday schools and religious instructions.

10. Seminary building used by the Roman Catholic Church, as a place for public worship and the education for men for priesthood, which mainly involves religious instructions, is deemed considered used for religious purposes. Moreover, Seminary is defined as a place or school where persons are instructed in theology; such as the study for priesthood. D.

C.

All machineries and equipment that are actually, directly and exclusively used by local water districts and government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power

All real property owned by duly registered cooperative as provided for under R.A. 6938. 117

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However, Electric Cooperatives registered with the National Electrification Administration (NEA) under P.D. No. 269, as amended, are not covered by the herein exemption. D.

Machinery and equipment used for pollution control and environmental protection. Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or-controlled corporations are hereby withdrawn upon the effectivity of the Code (R.A. 7160). (id.) Thus, real property owned by government-owned or-controlled corporations are now taxable whether or not there is beneficial user. •

Day exemption is determined - If property is taxable on January 1, it is liable to taxation for the whole year although it afterwards becomes exempt. In the same manner, if the property is exempt on January 1 it is exempt for the whole year although it afterwards becomes taxable.

SECTION 15. – RULES AND PROCEDURES BEFORE THE LOCAL BOARD OF ASSESSMENT APPEALS (LBAA) AND CENTRAL BOARD OF ASSESSEMENT APPEALS (CBAA)

LOCAL BOARDS OF ASSESSMENT APPEALS Pursuant to the provisions of Section 230, Chapter 3, Title Two, Book II of Republic Act No. 7160, otherwise known as the Local Government Code of 1991, the following rules of procedure governing proceedings before the Local Boards of Assessment Appeals on appeals by real property owners from the assessment collection of real property taxes by the provincial or city assessors and treasurers, or municipal assessors and treasurers in the Metropolitan Manila Area, are hereby adopted and promulgated.

RULE I TITLE AND CONSTRUCTION

Section 1. Title – These rules shall be known as the Rules of Procedure in the Local Boards of Assessment Appeals. The “Local Board of Assessment Appeals” shall mean any of the Boards of Assessment Appeals in every province or city, including the municipalities comprising the Metropolitan Manila Area. Whenever the term “Local Board” is used in any part of these 118

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rules, it shall be held to mean the Provincial or City Board of Assessment Appeals or the Municipal Board Assessment Appeals of any of the municipalities within the Metropolitan Manila Area. Section 2. Construction – These rules shall be liberally construed in order to promote their objectives and to assist the parties in obtaining just, expeditious and inexpensive determination of every action relative to the assessment and collection of real property taxes.

RULE II LOCAL BOARDS OF ASSESSMENT APPEALS

Section 1. Composition – The Local Board of the province or city, or municipality within the Metropolitan Manila Area, shall be composed of the Registrar of Deeds, as Chairman, the provincial, city or municipal prosecutor and the provincial, city or municipal engineer, as Members, who shall serve as such in an ex officio capacity without additional compensation. In the absence of a provincial, city or municipal engineer, the district engineer shall serve as member of the Local Board. In the absence of regular appointee, the officer performing the duties of the Register of Deeds, or of the provincial, city or municipal prosecutors, or of the provincial, city or municipal engineer or district engineer, whether in an acting capacity or the duly designated officer-in-charge, shall act as Chairman or Member, respectively, of the said Local Board. Section 3. Oath of Office – The Chairman and Members of the Local Board shall enter into the duties of their respective positions without need of appointment or special designation in the manner prescribed under Section 317 (g) of the LGC. Section 3. Submission of Oath of Office – It shall be the duty of the Local Board Chairman and Members, by its Board Secretary, to furnish the Central Board of Assessment Appeals with a copy of their oaths of office and, whenever there is a change in the person occupying a particular position in the Local Board, to update the Local Board Roster of Membership on the file in the Central Board.

RULE III ROLE OF THE CENTRAL BOARD

Section 1. Supervision of Local Boards – The Central Board of Assessment Appeals shall exercise supervision over all Local Boards.

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Section 2. Submission of Monthly Reports – The Local Board shall submit to the Central Board a monthly report of accomplishment which shall state, among other, the number of cases receive and disposed of, the assessed values involved, and all ocular inspections conducted for evaluation, policy formulation, program coordination and statistical purposes.

RULE IV JURISDICTION OF LOCAL BOARDS

Section 1. Jurisdiction – The Local Board shall have original jurisdiction to hear and decide appeals of owners/administrators of real property from the action of the Provincial or City Assessors, or the Municipal Assessors in the Metropolitan Manila Area, in the assessment of their real properties, and from the action of the Provincial or City Treasurers, or Municipal Treasurers in the Metropolitan Manila Area, regarding collection of real property taxes, special levies, or other real property taxes under Title Two, Book II of the R. A. No. 7160.

RULE V APPEAL TO THE LOCAL BOARD

Section 1. Who May Appeal – Any owner or administrator of real property, or any person having legal interest therein, who is not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may appeal to the Local Board of Assessment Appeals of the province, city, or municipality with the Metropolitan Manila Area, where the property is located. A real property taxpayer who is aggrieved by the decision, action or inaction of the provincial, city or municipal treasurer over excessive realty tax paid under protest, or on claim for refund of illegally or erroneously collected real property tax, including special levies on real property, may likewise appeal to the Local Board as provided in the Rule. Section 2. Period of Appeal – (a) The owner, administrator or person who is not satisfied with the assessment of his property may, within sixty (60) days from the date of receipt of the written notice of assessment, appeal to the Local Board concerned. (b) Any real property taxpayer who is aggrieved by the decision, action or inaction of the provincial or city treasurer, or municipal treasurer within the Metropolitan Manila Area, on his written claim for refund or credit may appeal to the Local Board concerned as follows: 1. If, within sixty (60) days from the date or receipt by the treasurer concerned of the written claim for refund or credit for tax paid under 120

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protest the treasurer concerned fails to make any decision thereon, the appeals may be made within sixty (60) days from the date of receipt by the treasurer concerned of the said written claim for refund or credit; or 2. If, within sixty (60) days from the date of receipt by treasurer concerned of the written claim for refund or credit for tax paid under protest the treasurer concerned denies the said claim, the appeal may be made within sixty (60) days from the date of receipt by the taxpayer concerned of the said treasurer’s decision denying the said claim. Section 3. Parties in the Local Board. – The real property owner or person making the appeal shall be called the “Petitioner” and the Provincial or City Assessor or Treasurer, or the Municipal Assessor or Treasurer within the Metropolitan Manila Area, shall be called the “Respondent”. Section 4. What may be appealed. – Any action of the Provincial, City or Municipal Assessor in the assessment of real property, and any action or inaction of the Provincial or City Treasurer, or Municipal Treasurer, on taxpayer’s claim for refund of taxes paid under protest, or on claims for reduction or adjustment of taxes paid or for tax credits on illegally or erroneously collected realty taxes and such other real property taxes or special levies under Title Two, Book II of Republic Act No. 7160, may be appealed to the Local Board concerned. Section 5. Requisites of Appeal – The appeal shall be effected by filing, within the reglementary period, with the Local Board concerned a petition under oath which shall state the action of the provincial, city or municipal assessor or treasurer appealed from the grounds relied upon, the arguments in support thereof, and the date the petitioner received the written notice of assessment or revised assessment or tax declaration with a written notice of assessment, and, in the case of an appeal from the action or inaction of the treasurer, the date when the petitioner received the decision of the treasurer denying the claim or protest, or the date the treasurer received the protest in writing showing the lapse of the 60-day period and without any decision from the treasurer concerned having been rendered. The appeal shall be filed in three (3) legible and typewritten copies, accompanied by three (3) copies of the written protest and decision of the treasurer concerned, or such other documents showing the lapse of the 60-day period without any decision from the treasurer concerned, and such affidavits or other documents in support of the appeal. For this purpose, the Secretary of the Local Board may assist the petitioner in filing of the appeal for purposes of substantial compliance with the aforementioned requirements. Section 6. Nature of Proceedings – The proceedings before the Local Board shall be conducted solely for the purpose of ascertaining the truth without necessarily adhering to the technical rules applicable in judicial proceedings. Section 7. Effect of Appeal on Collection of Taxes. – An appeal shall not suspend the collection of the corresponding realty taxes on the real property subject of the appeal as assessed by the provincial, city or municipal assessor, without prejudice to subsequent adjustment depending upon the outcome of the appeal. An appeal may be entertained but 121

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the hearing thereof shall be deferred until the corresponding taxes due on the real property subject of the appeal shall have been paid under protest or the petitioner shall have given a surety bond, subject to the following conditions: 1. The amount of the bond must not be less than the total realty taxes and penalties due as assessed by the assessor nor more than double said amount; 2. The bond must be accompanied by a certification from the Insurance Commissioner (a) that the surety company is duly authorized to issue such bond; (b) that the surety bond is approved by and registered with said Commission; and (c) that the amount covered by the surety bond is within the writing capacity of the surety company; and 3. The amount of the bond in excess of the surety company’s writing capacity, if any, must be covered by Reinsurance Binder, in which case, a certification to this effect must likewise accompany the surety bond.

Section 8. Docket – Upon receipt by the Local Board Secretary of the appeal, the same shall be docketed and assigned a case number consecutively in the order or receipt. Dokecting and other fees, which the Local Board may hereafter fix, shall be collected. Thereafter, the parties shall place the case number on all other related pleadings which may be filed. Section 9. Quorum – A majority of the members of the Local Board shall constitute a quorum to decide any matter before said Board relative to its functions, and the vote or concurrence of a majority of the members constituting a quorum shall be necessary to promulgate a decision, order or resolution of the Local Board.

RULE VI DECISION

Section 1. Period to decide – The Local Board shall decide the appeal within one hundred twenty (120) days from the date of receipt of such appeal. The Board, after hearing, shall render its decision based on substantial evidence or such relevant evidence on record as a reasonable mind might accept as adequate to support the conclusion. Section 2. Service of Decision to Parties – The Local Board Secretary shall furnish the parties to a case each with a copy of the decision of the Local Board. Where the parties are represented by counsel, service of the decision to party’s counsel is deemed proper service to the party. Section 3. Revision of Assessment – In the case the Provincial or City Assessor concurs in the revision of the assessment, it shall be his duty to notify the petitioner of such fact using the form prescribed for the purpose.

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RULE VII POWER AND DUTIES OF LOCAL BOARDS

Section 1. Powers – In the exercise of its appellate jurisdiction, the Local Board shall have the power to summon witnesses, administer oaths, take despositions, and issue subpoena and subpoena duces tecum and conduct ocular inspections of the real properties in question. The Local Board may likewise prescribe filing, docketing, and other fees at such rates or amounts as it may be deem just, proper and reasonable, consistent with the expenses, such as office supplies and services, that its local government unit may incur to serve the needs of every petitioner or appellant. Section 2. Duties - The Local Board shall conduct hearings on all appealed cases and render decisions thereon with the periods prescribed by law. It shall likewise inform the Central Board of any new matter or issue not provided for in these rules, and submit to the latter such reports or information as the Central Board may require from time to time.

RULE VIII APPEALS TO THE CENTRAL BOARD

Section 1. Period of Appeal; Where to Appeal; How to Appeal Taken – Any party aggrieved by the decision, order or resolution of the Local Board may appeal to the Central Board within the period and in the manner prescribed under Rule IV of the Rules of Procedure before the Central Board of Assessment Appeals.

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CENTRAL BOARD OF ASSESSMENT APPEALS (CBAA)

RULE I TITLE AND CONSTRUCTION; APPLICABILITY OF RULES OF COURT; AND DEFINITION OF TERMS

Section 1. Title. – These rules shall be known as the Rules of Procedure before the Central Board of Assessment Appeals. Section 2. Construction. – These rules shall be liberally construed in order to promote their objectives and to assist the parties in obtaining just, speedy and inexpensive determination of every action relative to the real property assessment and collection of realty tax pursuant to the Local Government Code and other related assessment laws. Section 3. Suppletory Application of the Rules of Court. – In the absence of any applicable provision in these Rules, the pertinent provisions of the Revised Rules of Court of the Philippines may be applied in a suppletory character and effect in all proceedings before the Central Board of Assessment Appeals without strictly adhering to the technical rules of evidence. Section 4. Definition of Terms – Whenever they appear in any part of these rules and in decisions, orders, and resolutions, the term “Central Board” shall be held to mean the Central Board of Assessment Appeals and the term “Local Board” shall be held to mean the Boards of Assessment Appeals of every province or city, including the municipalities within the Metropolitan Manila Area.

RULE II CENTRAL BOARD OF ASSESSMENT APPEALS

Section 1. Composition. – The Central Board shall be composed of a Chairman and two (2) Members, all of whom are appointed by the President for fixed terms as provided under the Local Government Code of 1991. Section 2. Quorum. – A majority of the members of the Central Board shall constitute a quorum to decide any matter before it relative to its rule-making power and adjudicatory functions, and the vote or concurrence of a majority of the members constituting a quorum shall be necessary to promulgate a decision, resolution or order. Section 3. Place of Office. – The Central Board shall hold office at the EDPC Building, Bangko Sentral ng Pilipinas Complex, Roxas Blvd., Manila. 124

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Section 4. Conduct of Business. – The Central Board may, on its own, conduct hearings of any appealed cases on such date and at such time and place it may designate, taking into consideration the interest of the parties concerned. Section 5. Supervision over Local Boards. – The Central Board shall have supervision over the local boards and shall promulgate rules and regulations relative to their proceedings.

RULE III JURISDICTION OF THE CENTRAL BOARD

Section 1. Appellate Jurisdiction. – The Central Board shall have exclusive jurisdiction to hear and decide all appeals from the decisions, orders and resolutions of the Local Boards involving contested assessments of real properties, claims for tax refund and/or tax credits or overpayments of taxes.

RULE IV APPEAL

Section 1. What may be appealed. – All decisions, resolutions, and orders of Local Boards in cases involving (1) contested assessments of real properties, (2) claims for refund of taxes overpaid and claims for tax credits, and (3) protests against special levies may be appealed to the Central Board of Assessment Appeals as prescribed herein. Section 2. Who may appeal; when to appeal. – Any party in a case before the Local Board who feels aggrieved by the decision, resolution or order of the said Local Board may, within thirty (30) days from and after receipt of the said decision, resolution or order, appeal to the Central Board. Section 3. How appeal taken. – An appeal shall be taken by filing a written notice of appeal, and the appeal itself, personally or by registered mail, with the Local Board which rendered the decision, resolution or order appealed from, or directly with the Central Board or with the latter’s field office in the area where the real property in question is located, after serving a copy each of the notice of appeal and the appeal upon the adverse party or the latter’s attorney. The appeal shall state clearly and distinctly the decision, resolution or order appealed from, the date when appellant received a copy thereof, the grounds relied upon , and the arguments in support thereof.

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Section 4. Time to answer or comment. – The appellee may, within ten (10) days from and after receipt of the appeal, file his answer or comment thereto after service of a copy of said answer/comment upon the appellant. Section 5. Transmittal of Records and Appeal. – Within ten (10) days from receipt of the notice of appeal or from receipt of the notice from the Central Board to the effect that an appeal has been filed, whichever comes first, the Local Board which rendered the decision or order appealed from shall transmit to the Central Board the complete original records of the case, together with transcripts of stenographic notes, if any. The records, with pages duly numbered from the earliest document to the latest, shall be accompanied by a certification to the effect that the same constitute the original and complete records of the case involved. Section 6. Docket and Docketimg Fee. – Upon receipt of the appeal, the Secretary of the Central Board shall docket and assign the same with a case number consecutively in the order of receipt. Appeals coming from the Luzon area shall be numbered “L-___”; those from Visayas area, “V-____”; and those from Mindanao area, “M-____”. The parties shall place the case number so assigned on all subsequent pleadings filed relative thereto. No appeal before the Central Board shall be considered filed unless the corresponding docketing fee, in legal tender or in postal money order made payable to the Central Board, is paid. The docketing fee shall be based on the realty tax assessment involved in the appeal: Provided, That, if the realty tax assessment involved cannot be determined, the docketing fee shall be P500.00 per appeal, thus: Tax Assessment Involved Over

Not Over P200,000.00 300,000.00 400,000.00 500,000.00

P200,000.00 300,000.00 400,000.00 500,000.00

Docket Fee Exempt P100.00 150.00 300.00 500.00

Section 7. Effect of appeal on collection of taxes. – An appeal shall not suspend the collection of the corresponding realty taxes on the real property subject of the appeal as assessed by the assessor concerned without prejudice to subsequent adjustment depending upon the final outcome of the appeal. If the corresponding realty taxes are not paid, the Central Board may nevertheless entertain an appeal by requiring the appellant to file a bond to guarantee the payment of the said taxes if found to be due, subject to the approval by the Central Board. Section 8. Withdrawal of Appeal. – The Appellant may withdraw his appeal at any time before the resolution thereof by the Central Board by filing a written notice of withdrawal with the Central Board which shall enter a memorandum thereof upon the docket of the case. The parties thereto shall forthwith be advised in writing by the Central 126

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Board of such withdrawal. No further proceedings shall be taken on the appeal, the withdrawal having the same effect as that of dismissal of the appeal.

RULE V DECISIONS, MOTIONS FOR RECONSIDERATION Section 1. Period to decide; finality of decision. – The Central Board shall decide cases brought before it on appeal within twelve (12) months from the dates of receipt thereof. A decision by the Central Board shall become final and executory fifteen (15) days after receipt thereof by the appellant or appellee, as the case may be. If a petition for reconsideration is filed on time, said decision, as may be modified by a resolution on such petition, shall become final and executory fifteen (15) days after receipt by the appellant or appellee, as the case may be, of a copy of said resolution. Section 2. Decisions, orders and entry thereof. – All decisions of the Central Board determining the merits of the case brought before it on appeal shall be in writing and signed by the members of said Board, stating clearly and distinctly the facts and the law on which they are based, and filed with the Secretary of the Board. As soon as it becomes final, the decision or order shall be entered in the Book of Entries of Decisions with a notation on the dispositive portion of the decision or order. The entry shall be signed by the Secretary of the Board that such decision or order has become final and executory. Thereafter, the Secretary shall return the complete original records of the case, together with a certified copy of the decision or order, to the Local Board concerned. Section 3. Petition for reconsideration. – The Central Board shall, with like jurisdiction, resolve petitions for reconsideration of its decisions, resolutions or orders. An aggrieved party may file a motion for reconsideration within fifteen (15) days from the date he receives the Central Board’s decision, resolution or order sought to be reconsidered, furnishing the adverse party with a copy of such motion: Provided, That only one petition for reconsideration shall be entertained. Section 4. Opposition. – The adverse party may file his opposition to the motion for reconsideration within ten (10) days from the date he receives a copy of the said motion. Section 5. Action taken on motion for reconsideration. – The motion for reconsideration, as well as the opposition thereto, which shall embody all the arguments in support thereof, shall be set by the Central Board Secretary for hearing on the next “Motion Day”. Upon the expiration of the period set forth in the preceding section of this Rule without any opposition having been filed, the motion for reconsideration shall be considered submitted for resolution by the Central Board, unless the Board deems it necessary to hear oral arguments, in which case, the Central Board shall issue the proper order. RULE VI 127

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PARTIES AND PLEADING

Section 1. Parties in the Central Board. – The owner of the property involved, or the person having legal interest therein, shall be called the “ Petitioner-Appellant” or “Petitioner-Appellee”, as the case may be. The Local Board concerned shall always be called the “Appellee” and the Assessor or Treasurer shall be called the “RespondentAppellant” or “Respondent-Appellee”, as the case may be. Section 2. Size of Stationery. – Appeals and other pleadings shall be typewritten, double-spaced, on plain bond paper, 8 1/2 inches in width and 13 inches in length. Section 3. Citations. – Citations shall be indented at least one inch from the left and right margins and shall be typed single-spaced. Section 4. Number of Copies. – Six (6) copies, including the original copy of the appeal shall be filed.

RULE VII HEARING OFFICERS

Section 1. Hearing Officers. – There shall be three Hearing Officers appointed by the Central Board, one (1) each for Luzon, Visayas and Mindanao, who shall hold office in Manila, Cebu City and Cagayan de Oro City, respectively. The Hearing Officers shall assist the Central Board in its adjudicatory and rule-making functions in order that any matter before it and all appeals involving contested assessments and collections of real property taxes may be expeditiously decided. Section 2. Duties and Functions of the Hearing Officers. – The Hearing Officers shall, upon direction of the Central Board, conduct hearings of all appeals before the Central Board in their respective venues upon direction of the Central Board. They may receive new evidence pertinent or relevant to issues raised and decided in the Local Board relative to appeals in the Central Board. For this purpose, they are authorized to summon witnesses, take depositions, issue subpoena and subpoena duces tecum, administer oaths on all matters or proceedings related to the performance of their duties and, after due notice to parties concerned, conduct ocular inspections of real properties subjects of the appeals whenever such inspections are deemed necessary. Section 3. Report of Findings and Recommendation. – Within sixty (60) days after the termination of the proceedings before them, the Hearing Officers shall render full and accurate reports of their findings and recommendations to the Central Board. The reports shall be accompanied by a proposed decisions of the appeals concerned.

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CHAPTER III REAL PROPERTY ASSESSMENT RECORDS MANAGEMENT INTRODUCTION: This chapter shall govern the installation and maintenance of a real property assessment records system in every local assessment jurisdiction for real property taxation purposes; and shall cover the following subject matters: (a) The records/forms prepared and maintained in an Assessor’s Office, whether manual or automated; (b) The procedures in, or manner of, preparing and maintaining these assessment records/forms; and (c) The unit in the assessor’s office, or the assessor’s office concerned as well as the personnel responsible in preparing and maintaining the assessment records/forms. Objectives. - This aims to establish a uniform records system and ensure that a systematic method of assessment is installed in every assessor’s office throughout the country. More particularly, the objectives of this chapter are as follows: (a) To systematize the existing real property records management system, which would be the source of all information from manual to computerized records system in the local assessor’s offices; (b) To install and maintain a uniform real property assessment records system in the offices of the provincial, city and municipal assessors. (c) To provide the provincial, city or municipal treasurers with updated real property assessment records of real properties within their respective jurisdictions from which the latest records of real property tax collectibles can be generated.

SECTION 1. – FORMS AND RECORDS For the purpose of this chapter, the assessment forms/records shall be grouped into two (2) categories, namely: The technical real property assessment records – which shall be prepared and maintained by the technical units or personnel of an assessor’s office; and the non-technical real property assessment records – which shall be prepared and maintained by the administrative or non-technical units or personnel of Assessor’s Office. 129

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A.

The Technical Real Property Assessment Records – The technical records are the primary and principal real property assessment records/forms and shall be the following: (1) Real Property Field Appraisal and Assessment Sheet (FAAS) for Land; (Attachment 1) (2) Real property Field Appraisal and Assessment Sheet (FAAS) for Buildings and other Structures; (Attachment 2) (3) Real Property Field Appraisal and Assessment Sheet (FAAS) for Machinery, (Attachment 3) The FAAS shall be prepared for every real property unit as it is the most important tool of an assessor. It contains all information needed in appraising a real property unit including the sketch of the land or the floor plan of the building. It enables an Assessor to keep constant account of all real property units in a locality. The FAAS when approved shall be a source for generating all other assessment records. • Title of the form: Field Appraisal and Assessment Sheet (FAAS) for Land, Field Appraisal and Assessment Sheet (FAAS) for Buildings and other Structures Field Appraisal and Assessment Sheet (FAAS) for Machinery • Purpose of the form: To serve as the primary and principal record of all real property information that are necessary for appropriate assessment thereof. • Assessor Responsible in the preparation of the form: - Unless delegated, the municipal assessor subject to the approval of the Provincial Assessor. The print copy shall be made after it has been approved. City Assessors, and Municipal Assessors of the municipalities in Metro Manila. • Number of copies to be prepared and Office where they are filed: Number of copies

Type of copy

Office where filed

1 copy

original

Municipal Assessor’s Office

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1 copy 1 copy 1 copy

original original duplicate

•

for municipalities within Metro Manila City Assessor’s Office Provincial Assessor’s Office Municipal Assessor’s Office In municipalities outside Metro Manila

FAAS shall be prepared each time there is an assessment transaction.

• Manner of filing FAAS and assigning ARPN. - The FAAS shall be filed numerically according to PIN by barangay. - In LGUs that have been tax mapped or are undertaking the RPTA project, the FAAS in a completely tax mapped barangay shall be arranged according to the sequence of their PIN. The pre-ARP numbers in the JAT are then assigned to the FAAS as recorded. Subsequent FAAS are numbered chronologically as they are recorded. - In LGUs that have not been tax mapped, the FAAS are first segregated by barangay, then they shall be arranged alphabetically by surnames of the property owners, after which they are assigned ARP numbers as recorded in the JAT. Subsequent FAAS are numbered chronologically. - A FAAS of a building which shall be filed next to the FAAS of the land on which they are located regardless of who owns the land, shall bear the PIN of that land with appropriate suffix such as 1001 added to it. - FAAS of machinery which shall be filed next to the FAAS of the building where it is installed, shall bear the PIN of the land with appropriate suffix such as 2001 added to it. In cases where two or more buildings are constructed on the land and machinery is installed in one of the building, the FAAS of the machinery shall be filed next to the FAAS of the building where it is installed. • Instructions on the manner of accomplishing FAAS ! Field Appraisal and Assessment Sheet (FAAS) for Land:

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a) Transaction Code: Indicate the code of the transaction necessitating the assessment or reassessment of the property which may be any of the following:

RANK 1 3 4 5

6

7 8 9

TRANSACTION

CODE

Subdivision Consolidation Discovery/New Declaration Reassessment due to Physical Obsolescence. Reassessment due to a dispute in Assessed Value or assessment to correct an error in the assessment of property due to wrong information, erroneous documents, etc. Reassessment due to destruction of the Property (Partial) Transfer/Segregation Reclassification General Revision

SD CS DC PC DP

DT TR RC GR

b) ARP/TD No.: Indicate the assessment of real property number assigned to the property assessment. c) TDN: Indicate the number of the TD which shall be fixed by the Provincial, City, and Municipal Assessors. d) PIN: Indicate the designated property index number (13 digits) of the land, of the building and of the machineries and equipment, as duly recorded in the TMCR. e) OCT/TCT No., Survey No., Lot No. and Blk. No.: Indicate the Original Certificate of Title (OCT) number or the Transfer Certificate of Title number of the lot and the date of entry as indicated in the title; the survey plan number such as Cad –774, Psd – 10011, its designated lot number (Lot 1104) and/or block number (Blk. 2) as verified and/or as validated. f) Owner: Indicate the name of the declared owner with his or her middle name or initial as much as possible, his mailing address.

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g) TIN: Indicate the Taxpayer Identification Number of the declared owner as verified. h) Administrator/Beneficial User: Indicate the name of the administrator(s) or beneficial user (s) including their respective Taxpayer Identification Number, mailing addresses. - The Administrator referred to is the duly authorized representative of the owner to manage the subject property. - The Beneficial User refers to that person who has been granted or permitted to use the subject property and who is liable for the payment of real property taxes under Section 234 of RA No. 7160. i) Property Location: Indicate completely where property is located – the number and/or street name, name of the barangay, municipality and province or city. j) Property boundaries : Indicate in the appropriate space the adjoining property which bound the said land, to wit: -

If tax mapped, indicate the assessor’s lot number and the corresponding survey lot number enclosed in parenthesis. In case the said parcel of land is bounded by a parcel of land located in another municipality, state the name of the municipality and/or the survey lot number, if available.

-

If not tax mapped but surveyed, indicate the cadastral lot numbers/survey lot number and/or the name of the owner of the parcel of land bounding the subject parcel. In case the said parcel of land is bounded by a parcel of land located in another municipality, indicate the name of the municipality.

-

If surveyed, state the name of the owner as declared in the tax declaration bounding the subject property.

-

In the case of street, river, etc. state the name of such street, road, river, etc. bounding the subject property. Sources of information: -

The section map or base map, if tax mapped; The survey plan; if not tax mapped but is surveyed, The certificate of title; if titled,

k) Land Sketch: The drawing of the lot shall be indicated. 133

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l) Land Appraisal: All the required information for appraisal shall be reflected in the space provided, to wit: • Classification: Indicate the property classification such as residential, agricultural, commercial, industrial, mineral, special or timber/forest land (RACIMST). • Sub-Classification: Indicate the sub-classification code of the property adopted by the Assessor’s Office as embodied in the schedule of Market values, like, R-1 for 1st class residential, C-2 for 2nd class commercial, UIR-1 for 1st class un-irrigated riceland, F-1 for 1st class fruit land etc. The subclassification codes that are not embodied in the Schedule of Market Values, such as UIR-1 for unirrigated riceland, etc., must be established by the Provincial, City/Municipal Assessor of Metro Manila Area concerned. • Area: Indicate the area of the land in hectares, in the case of an agricultural land; or in sq.m., in the case of an urban land. • Unit Value: Indicate the base unit value for the land in accordance with the approved Schedule of Market Values. • Base Market Value: Indicate the amount arrived at which is the product of the area and the base unit value. m) Value Adjustment: The data shall be reflected as called for in each column, to wit: • Base Market Value: Enter the total base market value as arrived at in “Land Appraisal”, that is, to the total value of Land. • Adjustment factors: State the adjustment factors applied for the subject property as provided for in the approved Schedule of Market Values such as the following: - Sunken or low area - Accessibility - Presence of or nearness to squatter or depressed area =Along/No road frontage = Kms. To all weather road 134

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= Kms. To market (pob) Heading center • Percent (%) Adjustment: Indicate the percent (rate) of adjustment as fixed in the approved schedule of market value, either to be added to or deducted from the base market value. For instance, apply 10% as the percent of adjustment factor for corner lot influence. • Value adjustment: Indicate the amount equivalent to the percent of applicable adjustment factor multiplied by the base market value as provided for in the Schedule of Market values. An example is P400, which is the amount arrived at as the value adjustment; that is the product of the base market value of P4, 000 and 10% for corner influence. • Market value: Indicate the amount arrived at by applying the value adjustments to the base market value. In the above (Value Adjustment) example, the 10% Value Adjustment of P400.00, is added to P4, 000, the Base Market Value of the subject property, and the result is the Market Value, which is P 4,400, or P4,000 + P 400. n) Property Assessment: • Actual Use: Indicate the actual use of the property such as residential, commercial, industrial, agricultural, mineral, special or timber/forest land. • Market value: Enter the market value (round to the nearest ten) as determined under “Market Value Adjustment”. • Assessment level: Indicate the assessment level, which is consistent with the actual use of the property as fixed in the LGU ordinance. • Assessed value: Indicate the value arrived at as the product of the market value and the assessment level. • Taxable: Mark the appropriate “Taxable” box by an “X”, if the property is Taxable pursuant to the provisions of existing law(s). • Exempt: Mark the appropriate “Exempt” box by an “X” if the property is exempt from payment of real property tax, pursuant to Sec. 234 of the Local Government Code of 1991 or expressly granted under other laws. 135

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• Effectivity of Assessment/Reassessment: State the year or quarter of the year when the assessment shall take effect as basis for the collection of taxes. o) Assessed By/Recommending Approval: The Assessor or personnel who appraises and assesses, and thereupon recommends approval of the assessment, shall affix their signatures over the printed name on the appropriate spaces provided. p) Approved by: The approving officer which is the City Assessor, Municipal Assessor of Metro Manila or the Provincial Assessor, as the case may be, shall affix his/her signature over the printed name. The Provincial Assessor however may delegate the authority to approve assessments to Municipal Assessors under his jurisdiction. q) Memoranda: any of the causes that brought about the assessment of real property may be written in the space provided, such as the reason for the assessment or reassessment of the subject property as in a general revision of assessments; or in the implementation of an RPTA project; or in any other legal basis. r) Reference & Posting Summary: Indicate the appropriate information in the space provided for, which may be needed for cross referencing, to wit: -

Record of Superseded Summary Assessment: Enter the respective PIN, ARPN/TDN, page number of the Assessment Roll, Tax Roll, Total Assessed value, Previous Owner and Effectivity of Assessment as indicated in the cancelled record.

-

Recording Personnel: The personnel who entered the information affixes his/her initial and indicates the date of entry.

(A) Tax Declaration of Real Property; (Attachment 4) and •

Title of form: Tax Declaration of Real Property

•

Purpose of the form: To establish a permanent assessment record and provides property owner with information relative to the assessment of his property for purposes of real property tax.

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Assessor responsible in preparing the form:

- Provincial Assessor but may be delegated to the Municipal Assessor concerned, including the approval thereof. - City Assessor, and Municipal Assessor of Metro Manila. •

Number of copies to be prepared:

Number of copies

Type of copy

Office where filed For Cities/Municipalities Within Metro Manila Area:

2 copies

original Duplicate

Mun. Assessor’s Office Within Metro Manila Property Owner For Cities:

2 copies

original duplicate

City Assessor’s Office Property Owner For Provinces:

3 copies

original duplicate Triplicate

Prov’l. Assessor’s Office Property Owner Mun. Assessor’s Office

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Numbering System Used: The Tax Declaration or TD/ARPN shall be established by the Provincial/City Assessor and the Municipal Assessor within the Metro Manila Area following the numbering system as prescribed herein.

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Frequency in preparing the Tax Declaration of Real Property

A tax declaration shall be prepared for every real property unit (RPU) in the general revision of property assessment, and thereafter, as in the following instances: -

When the property is newly discovered and declared for the first time. When there is change in location. When there is a change in area, When there is a change in classification, When there is a change in ownership, and 137

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When there is a physical change in the property, or in any other causes than the above instances.

Manner of Filing The TD shall be filed by barangay following the sequence of ARPN/TDN.

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Instruction on the Manner of Accomplishing a Tax Declaration All information that should be indicated in the Tax Declaration shall be extracted from the respective FAAS covering the property assessed.

a) No.: This refers to the number of the tax declaration that is, the TDN/ARPN. In case of municipalities outside Metro Manila Area, the Provincial Assessor shall have the sole authority to assign such number. b) Property Index no.: Indicate the PIN (Property Index No.) assigned to the subject property. c) Owner: Indicate the name of the owner of the property in the same manner as in the FAAS, and mailing address. d) Administrator/Beneficial User: Indicate the name of the administrator, if any, as well as the mailing address. e) Location of Property: Indicate the building number, if any, the name of street, the name of barangay, municipality/district and province or city. f) OCT/TCT No.: Survey No.; and Block No.: Indicate, as far as practicable, the Title number and the date of entry, the survey plan no., lot no., and block number. g) Boundaries: Indicate the appropriate description bounding the subject property as appearing in the FAAS. h) Kind of Property: Indicate the kind of real property such as land, building or machinery. i) Classification: Indicate the classification of the property (RACIMST) as appearing in the FAAS. j) Area: Indicate the area of the parcel of land or area of the building, as the case may be, as appearing in the FAAS. k) Market Value: Indicate the market value as appearing under Property Assessment of the FAAS. l) Actual Use: Indicate the actual use of the property (RACIMIST) as appearing in the FAAS. m) Assessment Level: Indicate the assessment level as appearing in the FAAS. n) Assessed Value: Indicate the assessed value as appearing in the FAAS. 138

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o) Total: Indicate the total market value and the total assessed value as appearing in the FAAS. p) Total Assessed Value: Indicate in words the amount of total assessed value. q) Taxable: Mark the appropriate “Taxable” box if the property is taxable as indicated in the FAAS. r) Exempt: Mark the appropriate “Exempt” box if the property is exempt as indicated in the FAAS. s) Effectivity of Assessment/Reassessment: Indicate the effectivity year or quarter of the year, as appearing in the FAAS t) Recommending Approval: The Municipal Assessor outside Metro Manila Area; or the Assistant City Assessor, or the Assistant Municipal Assessor within Metro Manila Area shall affix their signature over their printed name, as the official recommending approval of the assessment, or more particularly the tax declaration. u) Approved By: The City Assessor, the Municipal Assessor in Metro Manila or the Provincial Assessor shall approve and affix their signature over their printed name. The Provincial Assessor, however, may delegate such authority to the Municipal Assessor. v) “This declaration cancels TD No./ARP No.”: Fill such space by entering the TD No./ARP No. of the cancelled or superseded assessment. w) “Memoranda”: Enter the remarks as noted in the FAAS. x) Note: Fill-in the blank spaces provided for as follows: = Sangguniang _____: State the Panglunsod or Panlalawigan or Bayan within Metro Manila Area that enacted the Property Tax Ordinance. = Ordinance No. ________dated: State the number of the Real Property Tax Ordinance and the date the ordinance was enacted by the Sanggunian concerned. (B) Tax Map Control Roll (TMRC) (Attachment 5) •

Purpose of form:

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a) It is the basic document in controlling the PIN. b) It serves as the summary table of every parcel of land for each section map. c) It is also used as a reference in identifying related records of real property. Offices responsible in preparing and maintaining the TMCR: -

The City Assessor’s Office The Municipal Assessor’s Office in Metro Manila

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The Provincial Assessor’s Office, but such responsibility may be delegated to the Municipal thru a written order. However, both offices shall each maintain TMCRs and tax maps.

Number of copies to be prepared a) One copy of original and one printed copy of TMCR shall be prepared in municipalities of Metro Manila and all cities. b) In cases of Municipalities outside of Metro Manila, one copy of original and two print copies shall be prepared, that is, one print copy for the Provincial Assessor’s Office and one for the Municipal Assessor’s Office.

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Frequency in preparing the Tax Map Control Roll The Tax Map Control Roll (Post) shall be prepared separately for each section maps and for new/created section map. Extra sheets may be allowed for listing as the need arises.

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Manner of Filing:

a) TMCRs shall be filed with the corresponding tax maps by barangay. b) The original copy of the TMCR shall be filed with the original tax map (map master) in the Office of the City Assessor Office of the Municipal Assessor of Metro Manila Office of the Provincial Assessor • Instruction on the manner of accomplishing the TMCR a) Province/City: State the name of the province or city followed by the index number enclosed in parenthesis; b) Municipality/District: State the name of the municipality/district followed by the index number enclosed in parenthesis. c) Index No.: State the barangay index and section index numbers such as 001-01. d) Assessor’s Lot No.: State the assessor’s lot number which is the 3-digits number assigned to individual lot. It is used in conjunction with the Province/City/Municipality within MMA, Municipality/District, Barangay and Section Numbers, to complete the Property Identification Numbering System. e) Survey/Lot No.: Indicate the Survey Plan No., such as Cad-775 or Psd-10011, and/or lot number including the block number of survey plan as verified/validated.

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f) Land: Fill in the appropriate columns which are headed from, left to right, and described as follows: - Title No.: State the number of certificate of title either original or transfer on the first line for the initial entry. The other 4 lines are used for updating. If Title No. changed, simply enter the new TCT No. I the next empty line. - Area: State in hectare as 0.02970 for agricultural and mineral/timber lands, and square meters as 2, 970 for residential, commercial or industrial. - Class Code: State the classification code such as R for residential, A for Agricultural, etc. on the first line for the initial entry. If reclassified, enter the new classification in the next empty line. g) Name of Owner: State the complete name of owner, surname first followed by the given name, then middle initial on the first line for the initial entry. If ownership changed on the same property, enter the name of the new owner in the next empty line. h) ARP No.: State the assigned Assessment of Real Property Number of the subject property on the first line for the initial entry. i) TD No.: Enter the tax Declaration No. In line with the respective ARPN. j) Improvements: - Buildings/Structures: State the number of building/structures that are erected on the lot - Machinery: Indicate b a “x” mark (x) if machinery has been installed in the building. - Others: State the kind of improvement other than building or machinery found on the lot. k) Remarks: State the explanatory remarks concerning any unusual acts or circumstances, i.e., subdivided, duplicate, etc. pertaining to the subject property.

B.

The Non-Technical Real Property Assessment Records. – The nontechnical records are secondary real property assessment records/forms and shall be the following: (a) Assessment Roll (AR) (For Taxable Properties); (Attachment 7)

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Purpose of the form: To serve as a permanent listing of all real property assessments made with the corresponding tax due. To provide the Treasurer the basis for updating and validating his real property tax records.

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Offices responsible in preparing the form in the initial records installation: Assessment Roll: Office of the City Assessor Office of the Municipal Assessor in Metro Manila Office of the Provincial Assessor

The Provincial Assessor may delegate through a written order the responsibility of preparing the AR/TR to the Municipal Assessor under his jurisdiction. •

Frequency in the preparation of the Assessment Roll: p. Initially, the Roll shall be prepared arising from the general revision or property assessment, and thereafter, a quarterly supplemental update shall be prepared, furnishing the Treasurer concerned until the next general revision, except in cases where the assessors records are computerized and the same are directly and operationally connected to the Provincial or City or Municipal Treasurer in the form of LAN or local area networking.

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Number of copies to be prepared and the office where they are filed Number of Copies

Type of Copy

Office where filed Municipalities within Metro Manila:

2 copies

original duplicate

Municipal Assessor’s Office Municipal Treasurer’s Office Cities:

Original Duplicate

City Assessor’s Office City Treasurer’s Office Municipalities outside of Metro Manila:

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4 copies

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original duplicate triplicate quadruplicate

Prov’l. Assessor’s Office Mun. Treasurer’s Office Mun. Assessor’s Office Prov’l. Treasurer’s Office

Manner of Filing:

The Roll shall be filed by barangay together with the supplemental update which shall be of the same form. •

Instruction on the manner of Accomplishing the Assessment Roll/Tax Roll

All pertinent information to be entered in this record shall be extracted from FAAS or Tax Declaration, if accomplished. a) Real Property Assessment Roll (To be accomplished by the Assessor) - Page No.: Indicate the page number of the sheet, which is the barangay index code and follows by the sheet number. For instance, barangay “A” has an Index No. 001 and consist of 4 sheets of assessment roll, the first sheet bears the page no. 001-1, second sheet will bears the page no. 001-2 and so on. - Under the ________ General Revision: Fill-in the blank space provided by indicating the year, which is the time when the general revision was undertaken and subsequent assessment made using the same schedule of market values that caused the listing in the Assessment Roll, i.e., 1992-93. - Province/City: Enter the name of the Province or City followed by the Index No. - Municipality/District: Enter the name of the municipality/district followed by the Index No. - Barangay: Enter the name of the barangay and its Index No. - Date Prepared: State the date of entry in the roll was made. - ARP No.: Enter the assessment of real property (ARP) number assigned to the property as noted in the FAAS. - TD No.: Enter the tax declaration number. - PIN: Enter only the Section Index No. and Assessor’s Lot number assigned to the land including the four (4) digits suffixes in the case of building or machinery. - Lot/Block No.: Enter the Lot Number and Block No. - Property Owner: Enter the name of the property owner with the surname written first followed by the first/given name and the middle initial. - Address of Property Owner: Enter the full address of the property owner. 143

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- Kind: Enter the Kind Code as noted in the FAAS such as L for land, B for building and M for machinery. - Assessed value: Enter the assessed value as noted in the FAAS under “Property Assessment.” - Classification: Enter the Classification Code of the property, i.e. R for residential, etc. (RACIMST). - Assessed value: Enter the assessed value as noted in the FAAS under “Property Assessment.” - Previous ARPN: Enter the superseded ARPN as noted in the Reference and Posting Summary. - Previous TDN: Enter the superseded TDN as noted in the Reference and Posting Summary. - Effectivity: Enter the year or quarter in which the assessment take effect as noted in the Property Assessment. b) Tax Roll (to be accomplished by the Treasurer) - Tax Rate: State the rate of the tax for the locality as fixed in the ordinance. - Tax Due: State the amount of tax to be collected (Assessed Value times Tax Rate). - NATB No.: Enter the number of Notice of Assessment and tax Bill as assigned by the assessor concerned. - Remarks: State the important and relevant remarks pertaining to the property tax of the property. - Data entered in RPTAR: = Date: State the date of entry in the RPTAR. = Clerk’s Initial: The clerk who posted the information in the RPTAR shall affix his/her initial. (c) Assessment Roll (AR) (For Exempt Properties); (Attachment 8) •

Purpose of the form: -

It serves as a permanent listing of all real property exempt from real property taxes.

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To provide the Treasurer the basis for updating and validating his real property tax records.

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Offices responsible in preparing the form: Assessment Roll: Office of the City Assessor Office of the Municipal Assessor in Metro Manila Office of the Provincial Assessor (Office of the Municipal Assessor

While the Provincial Assessor is responsible in the preparation of the assessment roll, he may delegate through a written order the responsibility of preparing the same to the Municipal Assessor under his jurisdiction. •

Frequency in the preparation of the Assessment/Tax Roll for Exempt Properties. q. The Roll shall be prepared as a result of a general revision, and thereafter a quarterly supplemental update shall be prepared until the next general revision of property assessments. Except in cases where the assessors records are computerized and the same are directly and operationally connected to the Provincial or City or Municipal Treasurer in the form of LAN or local area networking.

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Number of copies to be prepared and the office where they filed: Number of Copies

Type of Copy

Office where filed Municipalities within Metro Manila:

1 copy 1 copy

original duplicate

Municipal Assessor’s Office Municipal Treasurer’s Office Cities:

1 copy 1 copy

Original Duplicate

City Assessor’s Office City Treasurer’s Office Municipalities outside of Metro Manila:

4 copy 1 copy 1 copy 1 copy

original duplicate triplicate quadruplicate 145

Prov’l. Assessor’s Office Mun. Treasurer’s Office Mun. Assessor’s Office Prov’l. Treasurer’s Office

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Manner of Filing:

The Roll shall be filed by barangay together with the supplemental update, which is of the same form. •

Instruction on the Manner of Accomplishing the Assessment Roll for Exempt Properties. All pertinent information to be entered in this record shall be extracted from the FAAS. a) Real Property Assessment Roll (To be accomplished by the Assessor) -

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Page No.: State the page number of the roll. Under the _________ General Revision: Fill-in the blank space provided by indicating the year which is the time when the general revision was undertaken and subsequent assessment made using the same schedule of market value that cause the listing. Province/City: Enter the name of the Province or City followed by its Index No. Municipality/District: Enter the name of the municipality or district followed by its Index No. Barangay: Enter the name of the barangay followed by its Index No. Date Prepared: State the date of entry in the roll was made. ARP No.: Enter the assessment of real property number as noted in the FAAS. TD No.: Enter the Tax Declaration No. (TDN). PIN: Enter only the Section Index and Assessor’s Lot Number of the Property Identification Number assigned to the property as noted in the FAAS.

(C) Ownership Record Card (ORC); (Attachment 6) •

Title of form: Ownership Record Card (ORC)

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Purpose of the form: 1) To expedite notice for the collection of real property of a person in a municipality, city or province. 2) It is the alternative basis for the annual preparation of the NATB. 3) To facilitate the determination of the total real property ownership in a local government unit.

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4) To serve as the alphabetical list of all real property owners for purposes of verification, ownership and record retrieval. •

Office responsible in preparing the record: City Assessor’s Office Municipal Assessor’s Office Provincial Assessor’s Office

The Municipal Assessor shall prepare the ownership report card by listing therein all properties of a person locate within the municipality and to be submitted to the Provincial Assessor who shall consolidate and make an alphabetical listing of all properties of a person provincewide, except in municipalities in Metro Manila Area where the Municipal Assessor’s shall be solely responsible for the preparation, consolidation and alphabetical listing of all properties of a person in the municipality. •

Number of copies prepared and office where copies are filed:

Number of copies

Type of copy

Office where copy is filed

1 copy

original

1 copy 1 copy 1 copy

original original original

Metro Manila Municipal Assessor’s Office City Assessor’s Office Provincial Assessor’s Office Municipal Assessor’s Office in municipalities Outside of Metro Manila

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Frequency in preparing the form: -

An ownership record card shall be prepared for every property owner in the municipality/city/province.

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It shall be prepared when a new person declared/acquires a property in a locality.

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It shall be updated when that person acquired a property in that locality by recording that property in his card.

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Manner of Filing:

The Ownership Record Card shall be filed following the alphabetical order of the surname of the property owner by municipality, city or province.

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Instruction on the manner of accomplishing the Ownership Record Card.

All pertinent information to be entered in this record shall be extracted from the FAAS or TD, if accomplished. " " " " " " " " "

" " "

Name of Owner: Enter the name of the owner in the same manner noted in the FAAS/TD. TIN: Enter the Taxpayer’s Identification Number, that is, the TIN of declared owner. Address and Tel. No.: State the complete address of the property owner for mailing purposes as well as his/her telephone number. Date Prepared: State the date of entry. Prov./City/Mun.: Enter the name of the Local Government Units followed by its Index No. that prepared the card. Date of Entry: State the date (Month/day/year) upon every entry. Kind: State the kind code, as “L” for land, plant and trees; “B” for building and “M” for machinery as indicated in the FAAS/TD. Class Code: Enter the classification code of the property such as R (residential), A (Agricultural), C (commercial), I (industrial), M (Mineral), S (Special), and T (Timber) as noted in the FAAS/TD. PIN: State the Barangay Index No., the Section Index No. and Assessor’s lot No. of the subject property as a municipality/city record but as a Provincial Record include the Municipal Index No. Title No.: Enter the Certificate Title No., original or transfer. Lot/Block No.: Enter the lot No. and/or Block No., under the survey plan. ARPN/TDN: Enter the Assessment of Real Property Number/Tax Declaration Number as noted in the FAAS or in the corresponding tax declaration in twelve digits as follows:

00 (Year) "

" " "

00000 00000 (Municipality Code and (Real Property Count) Barangay Code or Index Nos.)

Location of Property: Enter the building number, if any, and name of street and barangay, in the case of municipality/city record but in the case of provincial record, include the municipality. Area: Enter the land area in a square meters or hectares as noted in the FAAS. In the case of structure, enter the total floor area of the buildings. Market value: Enter the Market Value as noted in the FAAS/TD. Assessed Value: Enter the assessed value as noted in the FAAS/TD 148

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" Market Value – Indicate the total market value as noted in the cancelled TD. " Assessed Value – Indicate the total assessed value as noted in the cancelled TD. o

Sub-Total – State the computed total of sheet 1, this total should be carried forward and stated in the line “Balance Forward” of succeeding sheet.

(b) Notice of Assessment (NA) (Attachment 10) •

Purpose of the form:

To notify property owner of the assessment, and the current real property taxes due on his property/properties. •

Offices responsible for preparing the NA: a) Notice of Assessment (PART A): -

Provincial Assessor City Assessor Municipal Assessor of MMA

In the case of province, the Provincial Assessor and Treasurer may delegate such responsibility to the Municipal Assessor and Treasurer. •

Number of copies to be prepared:

Two copies shall be prepared by the assessor concerned, then the Assessor shall file the duplicate and served the original to the declared owner. •

Frequency in preparing:

It shall be prepared on assessments arising from general revision conducted or assessment made for the first time or when existing assessment is increased or decreased or when there is an update in the Tax Declaration arising from change of declared owner or his address, effectivity of taxes or correction/change of property location. •

Manner of Filing:

NA shall be filed according to the sequence of the NA number by city or municipality

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Instruction on the Manner of Accomplishing the Notice of Assessment. a) Property Owner: Enter the name of the declared property owner as well as his/her latest mailing address as noted in the Assessment Roll or ORC. b) No. Indicate the assigned NA No. c) Date: Indicate the date when prepared. d) Fill-in the blank space by the year as accrual of the taxes. e) Notice of Assessments: This is to be accomplished by the Assessor concerned as extracted Assessment Roll/Tax Roll/ORC/FAAS/TD. -

TDN/ARP No.: Enter the tax declaration number/ARP Number. Property Index Number: Enter the PIN that is for tax mapped area. - Location: Enter the location of the property. - Lot/Block No.: Enter the survey Lot No. and Block, if any. - Classification: Enter the classification code (RACIMST). - Market Value: Enter the market value. - Assessed Value: Enter the assessed value. - Total: State the total amount for market value and assessed value. - Assessor: Affix the signature of the Provincial/City/Municipal Assessor or his duly authorized representatives over printed name. f) Date delivered or mailed. The detailed descriptions, the specifications, and the manner/procedures in filling-up the above-enumerated records/forms are included hereto and are attached immediately after each and every copy of the same.

SECTION 2. – NUMBERING SYSTEM IN REAL PROPERTY ASSESSMENT RECORDS MANAGEMENT The numbering system in real property assessment records management shall be: (a) the Property Index Numbering System; (b) the Assessment of Real Property/Tax Declaration Numbering System; (c) the Notice of Assessment Numbering System. However, LGUs with existing numbering system should maintain the status quo until such time that they will conduct several revisions of property assessments in order to minimize the cost of revising assessment records.

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A. The Property Identification Numbering System. – A unique Property Identification Number or PIN is assigned to each parcel of land plotted on a tax map and the same procedure as in the Tax Mapping Manual is hereby maintained as follows: (a) For Lands – 00 0000 000 Prov./City/Mun. (MMA) Mun./City Dist. Barangay

000 00 Section Parcel No.

(b) For Buildings and Other Structures – PIN of the building constructed on a parcel of land, whether owned by the land owner or any person other than the land owner, shall first bear the PIN of the land with a four-digit number beginning with 1001, for the first building, added to it, followed by 1002, 1003, etc, etc. for additional buildings constructed on the same parcel of land. •

In the case of condominium building, the PIN of the unit shall first bear the PIN of the land with a letter “A” and 3-digit number beginning with “A001”, for the unit of the first condominium building, added to it, for by “B001”, etc., for the unit of another condominium building constructed on the same parcel of land.

(c) For Machinery - The permanent PIN of machinery installed on a parcel of land, whether owned by the land owner or any person other than the landowner, shall, likewise, bear first the PIN of the land and a four-digit number beginning with 200l, for the first machinery added to it, followed by 2002, 2003, etc. for additional machinery installed within the same parcel of land. One unit of machinery refers to machinery including its accessories, Intended for the purpose such as industrial, sugar mill, commercial escalators. B. The Assessment of Real Property/Tax Declaration Numbering System - An (ARPN) which is assigned to every assessment of real property unit (RPU), shall be indicated in the space provided for in the forms/records prescribed under this Regulations. The initial numbering shall be done everytime a general revision of real property assessments is conducted, or in some instances, during the implementation of a Real Property tax Administration (RPTA) Project. (a)

The ARP/TD No. shall be as follows: (1) For Provinces. 00 Mun.

0000 Barangay

0000 Assessment Count

• The Municipality and the Barangay Index numbers – The first two (2) digit numbers, representing the index number of the municipality; and the next three (3) digit number representing the 151

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index number for barangays, are the same index numbers for municipalities and barangays as may be determined based on the procedures in assigning the index numbers the tax mapping operation; and • The Assessment Count – The last four (4) digit number represents the assessment number assigned to every RPU starting with 0001 for the first RPU assessed and 0100 for the one hundred RPU assessed and recorded per barangay, and so on. (2) For Cities (outside Metro Manila Area) – 0000 Barangay

00000 Assessment Count

• The Barangay Index Number – The first four (4) – digit number represents the index number of the barangay which as may be determined based on the procedures is assigning barangay index numbers for barangays in tax mapping operation; and • The Assessment Count – The last five (5) digit number represents the assessment number assigned to every RPU as in Item 4.3.1.5.1. (3) For Cities and Municipalities within Metro Manila Area – AA or A General Revision Indicator

00 Mun.

0000 Barangay

00000 Assessment Count

•

The General Revision Indicator – The number of times the LGU has undertaken a general revision since the effectivity of the Local Government Code of 1991, i.e., AA or A for the first one conducted immediately after January 1, 1992; and BB or B for the second general revision of real property assessments, and so on;

•

The Municipality/City District Index Numbers – The two digits represent the index number of the municipality or city district;

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The Barangay Index Number – This shall be the four (4)-digit number of the barangay as in the foregoing Items for Provinces and for Cities; and

•

The Assessment Count – The last five (5) digit numbers shall represent the similar assessment assigned to every RPU as in the foregoing Items for Provinces and Cities. 152

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(b) Installation of the ARP Numbering System – The process of installing the ARP Numbering System in a city or municipality is as follows: 1. For a Tax Mapped Municipality/City – The Field Appraisal Assessment Sheets (FAASs) together with the corresponding tax declarations (TDs) as arranged by PIN; which are consequently filed by barangay. Thereupon, the ARP Number, which corresponds to the number of line of entry in the JAT are then assigned to the FAAS and TD so arranged starting from the first line numbered “001”. 2. For a Municipality/City Not Tax Mapped – FAASs together with the corresponding TDs are first segregated by barangay, which shall also be so arranged as in a tax mapped municipality or city, that is, “001” for Barangay “Poblacion” and the remaining thereof, are arranged in alphabetical order. The FAASs and the corresponding TDs which are filed by barangay, are then arranged in alphabetical order by owners’ surname, and the ARP Numbers which correspond to the number of line of entry in the JAT are assigned such FAAS and TD. (c) The Notice of Assessment Numbering System – The Notice of Assessment (NA) also referred to as the Real Property Tax Order of Payment (RPTOP) are numbered in such a way that no two RPTOPS issued shall bear identical numbers. The manner of numbering RPTOPs is provided hereunder. 1.

For Municipalities Outside the Metropolitan Manila Area. – The numbering structure of the RPTOP for municipalities outside the MMA shall be as follows: 00000 Prov/Mun.

______________ RPTOP Count

where: The first three (3) digits of the five (5)-digit number represent the index number of the province; the next two (2) digits thereof represent the index number of the municipality; and the succeeding numbers represent the RPTOP count. The first RPTOP is assigned the number 1 and the second is assigned the number 2, and so on. 2.

For all Cities and Municipalities within the Metropolitan Manila Area – The Numbering structure of the RPTOP for cities and municipalities within the MMA shall be as follows: 000 City/Mun.

____________________ RPTOP Count

where: The first three (3)-digit number represents the index number of a city or a municipality within the MMA; The succeeding numbers shall 153

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represents the RPTOP count. The first RPTOP assigned the number 1 and the second is assigned the number 2, and so on. The preparation of the Real Property Tax Order of Payment shall not be required in assessor’s office in Cities or Municipalities which are already computerized and the records of which are already accessible to the treasurer’s office through LAN or local area networking. SECTION 3. – CODES USED IN ASSESSMENT RECORDS The Codes which shall be used in the assessment records of the Assessor’s Office are as follows: A. Kind Code – The Kind Code refers to the code which shall be used for the different kinds of real properties, viz: Kind of Property

Code

Land Building and Other Structure Machinery

L B M

B. Classification Code – The Classification Code refers to the code which shall be used for the different classifications of real property on the basis of: (1) the approved schedule of market values – for lands, buildings and other structures, prepared in pursuance of the provisions of Section 2.1.1 of R.A. No. 7160; and (2) the degree of utilization and/or the ordinance enacted by the sanggunians concerned strictly in accordance with Section 20 of the said Act, in line with the decision rendered by the Office of the President under OP Case No. 96-C-6424 dated March 29, 1996. The following classification codes shall be used: Property Classification Residential Agricultural Commercial Industrial Mineral Timberland/Forest Special: Hospital Cultural Scientific Local Water District Corporation engaged in Generation/distribution of electric Power 154

Code R A C I M T SH SC SS SW

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C. Update or Transaction Code – The Update or Transaction Code refers to the code, which shall be used to identify the kind of transaction for which the assessment or reassessment of real property is being made. The transaction, its rank and the corresponding code shall be as follows: Rank

Transaction Type

Code

1

Subdivision

SD

2

Consolidation

CS

3

Discovery/New Declaration

DC

4

Reassessment due to Physical Change in the Property

PC

5

Reassessment due to a Dispute in Assessed DP Value or reassessment to correct an error in the assessment of the property due to wrong information, erroneous documents, etc.

6

Reassessment due to Destruction of the Property (Partial Total)

DT

7

Transfer/Segregation

TR

8

Reclassification

RC

9

General Revision of Assessments

GR

For assessment or reassessments involved two (2) or more transactions, the highest rank among the transactions shall be indicated.

D. Use Code – The Use Code refers to the code which shall be indicated to identify the actual use of the property assessed and to determine the appropriate tax rate. The following shall be the Use Code for real property assessment records purposes: Use

Code

Residential Commercial Industrial Agricultural Mineral

AR AC AI AA AM 155

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Timberland/Forest Hospital Cultural Scientific Local Water District Charitable Religious Recreational Educational Cemetery Park

ATF ASH ASC ASS ASLWD ACH ARE ARC AED ACT ARK

Government: National Provincial City Municipality Barangay Corporation

ANG APG ACG AMG ABG AGOCC

SECTION 4. – REVISED ASSESSMENT FORM For purposes of observing the economy measures enunciated by the government, local governments may continue to use their unused forms until their present supplies are fully exhausted; provided, however, that local assessment offices that have recently completed their general revision work for CY 2001, shall use the prescribed forms/records subsequent to the next general revision of real property assessments and in the implementation of tax mapping and/or record conversion projects.

SECTION 5. – REPORTING The report format marked as Attachment II contains information on the number of real property units, the land area, taxable value by property classification, exempt value by property classification, the market value, assessed value, the rate of levy and tax collectible. A. Frequency – The report shall be prepared on quarterly. B. The report shall be prepared and certified correct by the Assessor concerned as indicated in the footnote of said form.

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C. Submission of Reports 1. In the case of Municipalities, all reports must be submitted to the Provincial Treasurer and to the Provincial Assessor, as the case maybe, on or before the 10th day of the month immediately following the quarter. 2. In the case of Cities, all reports shall be submitted to the BLGF Regional Office copy furnished the BLGF Central Office on or before the 20th day of the month immediately following the quarter reported on. 3. In the case of Provinces, all reports shall be submitted to the BLGF Regional Office copy furnished the BLGF Central Office on or before the 20th day of the month immediately following the quarter reported on. The Provincial Treasurers or the Provincial Assessors shall submit a consolidated report of different reports of the municipalities under their jurisdiction. 4. Cities and Municipalities within Metro Manila shall submit their reports on or before the 30th day of the month following the quarter reported on, directly to the BLGF Central Office, which shall prepare the required consolidated reports. 5. The BLGF Regional Office shall submit a consolidated report of all the LGUs within the region to the BLGF Central Office due on or before the 30th day of the month immediately following the quarter reported on.

CHAPTER 4 Miscellaneous Provisions SECTION 1. - PROVINCIAL/CITY APPRAISAL COMMITTEES The right of eminent domain is usually understood to be the ultimate right of the sovereign power to appropriate, not only to the public but the private property of all citizens within the territorial jurisdiction for public purpose. It is a power inherent in sovereignty. Hence, it is a power which need not be granted by any fundamental law. The delegated power of eminent domain of local government is strictly speaking not a power of eminent but of inferior domain, - a share merely in eminent domain. Hence, it is only as broad as the eminent authority would allow it to be. Article III, Section 9 of the 1987 Constitution provides that ”Private Property shall not be taken for public use without just compensation.” There are two (2) Constitutional limitations on the power of eminent domain: (1) the purpose of the 157

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taking must be for public use, and (2) just compensation must be given to the private owner. An LGU may, through its Chief Executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, purpose, or welfare of the poor and the landless, upon payment of just compensation. The following shall among others, be considered as public use, purpose or welfare: a) Socialized housing; b) Construction or extension or roads, streets, sidewalks, viaducts, bridges, ferries, levees, wharves, or piers; c) Construction or improvement of public buildings; maintained and operated by the government for public use such as nurseries, health center, or hospitals. Building of research, breeding, or dispersal centers for animals. d) Establishment of parks, playgrounds, or plazas; e) Establishment of public market places; f) Construction of artesian wells or water supply systems; g) Establishment of cemeteries or crematories; h) Establishment of drainage systems, cesspools, or sewerage systems; i) Construction of irrigation canals or dams; j) Establishment of nurseries, health centers, or hospitals; and k) Establishment of abattoirs. The requisites for a valid exercise of the power of eminent domain by LGUs are: a) An ordinance must be passed authorizing the local chief executive to subject a certain property to a local governments unit’s power of eminent domain or to expropriation; b) The power must be exercised for public use purpose or welfare for the benefit of the poor and the landless; c) There must be payment of just compensation; and d) A valid and definite offer to buy the property must have been previously made to the owner but the offer was not accepted. (Pimentel, 1993)

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A. Definition of Terms Public Use - means public usefulness, utility, or advantage, or what is productive of general benefit, so that any appropriating of private property by the State under its right of eminent domain, for purposes of great advantage to the community, is a taking for public use. Just Compensation – described as the just and complete equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation. Market Value – price agreed upon by the buyer and seller in the open market in the usual and ordinary course of legal trade and competition; the price and value of the article established or shown by sale, public or private, in the ordinary way of business; the fair value of property as between one who desires to purchase and one who desires to sell; the current price; the general or ordinary price for which property may be sold in that locality. Consequential damages – damages to other interests of the owner that can be attributed to the expropriation. Consequential benefits – the increase in the value of the other interests of the owner that can be attributed to the new use to which his former property will be put by the expropriating authority. Executive Order No. 132, dated 22 December 1937, which since then has undergone several amendments, authorized the creation of Appraisal Committees which are tasked generally to determine the real or market value of the property to be acquired. Referral to the Appraisal Committee is necessary only if negotiations with the owner fail. The composition of Appraisal Committee is as follows: B.

PROVINCIAL/CITY amended): Chairman Member Member

-

APPRAISAL

COMMITTEE

E.O.

132

(as

Provincial/City Assessor Provincial/City Engineer Provincial/City Treasurer

In Provinces where no position for Provincial Engineer exists, the Public Works and Highways District Engineer shall sit as member of the Committee, provided that if there are two or more Engineering Districts in the Province, the Public Works and Highways District Engineer of the Engineering District concerned shall sit as member of the Committee.

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1) APPRAISAL COMMITTEE IN THE METROPOLITAN MANILA AREA City Appraisal Committee Chairman Member Member Member Member

-

MMDA Chairman City Assessor City Treasurer City Engineer District Engineer of the DPWH

Municipal Appraisal Committee of MMA: Chairman Member Member Member Member Member C.

-

MMDA Chairman District Engineer of the DPWH City Assessor of the District Municipal Assessor Municipal Engineer Municipal Treasurer

Modes of Acquisition of Real Property: 1. Negotiated Sale 2.Expropriation

Acquisition Through Negotiated Sale – As an initial step, the government implementing agency/instrumentality concerned shall negotiate with the owner of the land that is needed for the project for the purchase of said land, including improvements thereon. In the determination of the purchase price to be paid, the Department of Finance and the Provincial/City Assessors shall extend full assistance and coordinate with the personnel of the government implementing agency concerned in the valuation of current and fair market value declared by the owner or administrator of the land, or such current market value as determined by the assessor, which ever is lower, prior to the negotiation. A. O. No. 50 was already amended by R. A. No. 8974 making the zonal value the basis of the offer to acquire property for public purpose less the additional 10% increase in the existing zonal value. However, both A. O. 50 and R. A. No. 8974 do not provide for the basis and procedure for the acquisition of building and improvements as well as the valuation of machineries and equipment to be affected by the public project nor do they apply to the acquisition of properties by the Local government for public purpose. It is therefore necessary that appraisal committee be created in Local government units outside Metro Manila for the appraisal of properties to be acquired for public purposes. It is therefore proper that building and improvement must be appraised taking into consideration the following factors:

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1. the rise of the building and improvement affected. 2. The materials used 3. The age or depreciation of the building plus other factors as economic and legal obsolesce. 4. In the case of machinery refer to Chapter II of this manual for guidance. Expropriation – If the parties fail to agree to negotiation of the sale of the land as provided in the preceding section, the government implementing agency/instrumentality concerned shall have authority to immediately institute expropriation proceedings through the Office of the Solicitor General, the Government Corporate Counsel, or Provincial/City legal officer as the case may be. The just compensation to be paid for the property to be acquired through expropriation shall then be determined by the court in accordance with the provisions of R. A. 8974. Courts shall give priority to the adjudication of cases on expropriation and shall immediately issue the necessary writ of possession upon deposit by the government implementing agency/ instrumentality, the amount initially proposed just compensation provided under R. A. 8974; Provided, That the period within which said writ of possession shall be issued shall in no case extend beyond five (5) days from the date such deposit was made. In order to facilitate the immediate judicial determination of just compensation during the expropriation proceedings, the expropriating agency or its duly authorized assessor in appraising the fair market value of the private property intended to be expropriated must consider, among other well established factors, the following relevant standards: a) b) c) d) e)

The classification and use for which the property is suited; The developmental costs for improving the land; The value declared by the owners; The current selling price of similar lands in the vicinity; The reasonable disturbance compensation for the removal and/or demolition of certain improvements on the land and for the value of improvements thereon; f) The size, shape or location, tax declaration and zonal valuation of the land; g) The price of the land as manifested in the ocular findings, oral as well as documentary evidence presented; and h) Such facts and events so as to enable the affected property owners to have sufficient funds to acquire similarly-situated lands of approximate areas as those required from them by the government, and thereby rehabilitate themselves as early as possible.

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D. Procedures to be followed in the Acquisition of Private Property for Public Use (E. O. 132): 1. to secure complete data such as, deed of sale, declared under oath or affirmation, certification by the municipal assessor to ascertain the real or market value of the property to be acquired for public use and to ascertain the purchase price of the property to be acquired or of other property similarly conditioned in the same vicinity. 2. To hold public hearings and make such other investigation as may be deemed necessary. 3. Upon the completion of the investigation which shall not be longer than 60 days after the receipt of notification by the chairman, submit a report to the provincial board, city or municipal council or National government officials concerned with recommendation as to whether the property should be purchased at the prices determined upon by the Committee and approved by the owner or condemnation proceedings instituted. If the recommendation of the Appraisal Committee is not acceptable to the government entity or to the property owners concerned, steps should be taken to institute condemnation proceedings in accordance with Section 12, Chapter 4, Book III of the Administrative Code of 1987 and the Rules of Court. 4. To determine the consequential benefits that may be derived from the construction of the proposed improvements and the damage that may be caused by such improvements. In arriving at a fair valuation as contemplated by law, if the estimated damages exceed the estimated benefits, such excess should be added to the market value. On the other hand, if the estimated benefits exceed the probable damages, the difference shall be disregarded and the market price considered the fair valuation. 5. In the case of all public improvements where it is necessary to acquire private property through condemnation proceedings, construction work shall not be started unless the following requirements concur. a. bond to be filed by the government. b. Authorized entry upon the property, and c. Sufficient funds are obligated or set aside to cover a reasonable estimate of the cost of such private property.

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E. Activities Preparatory to Acquisition of Property (E.O. 1035) l. Feasibility Studies Feasibility studies shall be undertaken for all major projects, and such studies shall in addition to the usual technical, economical operational aspects, include the social, political, cultural and environmental impact of the project. 2. Information Campaign Every agency, office and instrumentality of the government proposing to implement a development project which require the acquisition of private real property or right thereon shall first make consultations with the local government officials, including the regional development councils- having jurisdiction over the area where the project will be undertaken to elicit their support and assistance for the smooth implementation of the project. The implementing agency/instrumentality concerned with the assistance of the local government officials and representatives of the Office of the Media Affairs shall conduct an extensive public information campaign among the local inhabitants that will be affected by the project to acquaint them with the objectives and benefits to be derived from the project and thus avoid any resistance or objection to the acquisition of the property for the property. 3. Detailed Engineering Surveys The implementing government agency/ instrumentality concerned shall, well in advance, of the scheduled construction of the project, undertake detailed engineering, including parcellary surveys to indicate the location and size of the sites and to determine ownership of the land to be acquired, including the status of such land ownership. 4. Project Cost/Funding The estimated cost of a project shall have the following distinct components: a. Pre-investment cost which shall include the cost of undertaking the feasibility study and public information campaign; b. Investment cost which shall include the cost of detailed engineering, cost of the property to be acquired and cost of construction and construction supervision. The programming and budgeting of funds for the pre-investment and preconstruction phases, carried out in that order, shall be undertaken well in advance of the scheduled commencement of construction. The implementing agency/instrumentality concerned shall include in their respective proposals for annual budgetary outlays provisions to finance these preparatory activities and the Office of Budget and Management 163

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(DBM) shall consider such proposals in the light of the foregoing. In the case of the infrastructure ministries, the necessary outlays for each phase of the pre-implementation activities shall be made a distinct component of the annual infrastructure program which shall be released by the DBM as scheduled. SECTION 2. - ZONAL VALUATION (by Atty. Raymund S. Gallardo, Asst. RDO, South Q. C.) A. BACKGROUND Zonal valuation for revenue tax purposes is a relatively new concept in the Philippine taxation as the method was only made effective in January 1, 1988. Before 1998, valuation of real properties for internal revenue taxes (capital gains/income and transfer taxes) is based mainly on the valuation of real properties as determined by the local government for its annual real property collection. But because of the structural defect in the valuation procedure adopted by the local government, wherein only a fraction of the market values of the properties (assessed value) is used as a basis of valuation, the Philippine tax authorities, specially the Bureau of Internal Revenue (BIR), the taxing arm of the national government, in its desire to raise more revenues have turned its attention to the potentialities of a correct land valuation as a major means of resources mobilization. The direction taken for the valuation of properties by the national government therefore is towards a less dependent state o the valuation undertaken by the local government. As such, the valuation adopted by the national government should be one that would at least approximate the current market value and one that is procedurally uniform and simple. The attempt however, to adopt a valuation method should be guided by the following principles: (1) (2) (3) (4)

Taxation should be uniform and equitable Real property should be appraised at its current and fair market value The appraisal of real property shall be uniform in each district or zone Real property shall be classified for assessment purposes on the basis of its actual use (5) In no case shall the appraisal and assessment of real properties for taxation purposes be let to any private person (6) The goal of real property assessment shall be the equitable distribution of the tax burden.

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B. LEGAL BASISTOF ZONAL VALUATION SECTION 6(E) of the National Internal Revenue Code (NIRC) of 1997 which became effective on January 1, 1998, provides the statutory authority for zonal valuation. The law empowers the Commissioner of the Bureau of Internal Revenue to: (1) Divide the Philippines into different zones or areas (2) (2) Determine the fair market value (FMV) of real properties in each zones or areas. This authority, however, carries with it the following constraints: (a) that consultation should be made with competent appraisers both from the public and private sectors; and (b) for purposes of computing any internal revenue tax, the value of the property shall be either the Fair Market Value as determined by the Commissioner of Internal Revenue (in this instance the zonal value) or the fair market value as shown in the schedule of values of the Provincial and City Assessors which ever is higher. The BIR is divided into branches or district throughout the country. Every district has a definite territorial boundary or jurisdiction where it can exercise its authority. These branches or districts wee then adopted as the different zones for valuation of real properties. Since these zones are in different locations, valuation therefore differs from one zone to the other.

C. OBJECTIVES OF ZONAL VALUATION The main objectives therefore are the following: (1) To establish a realistic value of real properties which can more or less approximate the present fair market value of real properties as a basis for computing any internal revenue tax. (2) To have an efficient tax administration by minimizing the use of discretion in the determination of the tax base on the part of the administrator on one hand and the taxpayer on the other hand. The philosophy behind tax zoning and in vesting special powers of authority to revenue officers is to prevent the taxpayer from violating the laws rather than to wait for the taxpayer to violate the law and prosecute them later when they can no longer pay their taxes or when they can no longer be located at their place of business. This approach therefore, is more of a preventive or persuasive approach rather then punitive or remedial in nature.

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D. ZONAL VALUATION PROCESS The determination of zonal valuation is a three tiered approach. Basically, these three states of zonal evaluation starts with the Sub-technical Committee (STCRPV), to the Technical Committee (TCRPV) and then to the Executive Committee (ECRPV) before its final approval by the Secretary of Finance through the issuance of a Department Order. These committees were created by the Ministry of Order Nos. 20-86 and 2186 and were recently amended by Department Orders No. 10-92 AND 11-92. The Executive Committee is composed of the Commissioner of Internal Revenue as Chairman, Assistant Commissioner, (National Assessment Office) and representatives from the Bureau of Local Government Finance, National Tax Research Center, and two competent appraisers from the private sector as members. Tapped as Consultants are representatives of the Housing and Land use Regulatory Board (HLURB), National Mapping and Research Information Authority (NAMRIA), Land Registration Authority (LRA), and National Housing Authority (NHA). It is in charge with the function of studying, analyzing and approving zonal valuations passed upon by the Technical Committee and to decide on difficult questions or protest raised in the lower level committees. The Technical Committee (TCRPV), on the other hand, is composed of the Assistant Commissioner of the Internal Revenue as chairman, and for its members include the representatives from the Bureau of Local Government Finance, National Tax Research Center, Bureau of Internal Revenue and two representatives from the Association of Private Real Estate Appraisers, Brokers or Developers. It has for its function the study and preparation of zonal schedules of fair market values on real properties to be used as basis in the computation of any internal revenue tax. Department Order No. 10-92 further gave this committee an additional authority to create a Sub-technical Committee on Real Property Valuation (STCRPV). This Sub-technical Committee is composed of the Revenue District Chief in every branch or zones as chairman, and the Provincial/City/Municipal Assessors and two competent appraisers/brokers representing the private sector, as members. This committee will basically provide the initial work related to the establishment of zonal values on real properties situated within the respective jurisdiction of the Revenue District Chief. (a) STEP-BY-STEP PROCEDURE Revenue Memorandum Order No. 56-89 provides for the procedural steps in establishing the zonal values from the Revenue District Branches until its final approval by the Secretary of Finance. The following therefore are the steps adopted in arriving at the zonal values of real properties.

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1. Preparation of a preliminary schedule of recommended values on real properties. After determining the boundaries or zones and classification of the lands, the Sub-technical Committee shall prepare the schedule of recommended values by the zones/barangays or barrios (the smallest political unit in the Philippines) under the following classifications:

(a) (b) (c) (d) (e) (f) (g) (h) (i)

Residential Regular …………………. Commercial Regular ………………… Residential Condominium ………….. Commercial Condominium ………… Agricultural …………………………. Industrial ……………………………. General Purpose ……………………. Government Purpose ………………. Area for Priority Development …….

RR CR RC CC A I GP GL APD

The recommended values shall be based on acceptable methods of appraisal, records of the most recent and actual sales/transfers/exchanges of properties appearing on documents filed in public offices, private records of banks, realtors or appraisers in the locality and records of the Provincial/City/Municipal Assessors. The recommended zonal values shall be made only after a deliberation has been conducted with the appraisers and assessor of the locality on the three recommended values of the land. The final recommended value shall be the average of the two highest values. 2. Values.

Submission/Review of the Schedule of Recommended Zonal

The schedule of recommended values of real properties duly signed by the chairman of the Sub-technical Committee and members including the maps and listings shall be submitted to the Technical Committee (TCRPV). The Technical Committee shall then evaluate the submitted schedule of recommended zonal values. In the absence of any objections of comments, the same shall be finalized and submitted to the Executive Committee for consideration, otherwise, said schedules shall be returned to the Sub-technical Committee for necessary corrections or adjustments. 3. Public Hearing/Notice to the Public A public hearing shall be held in (1) Metro Manila Areas; (2) chartered cities and (3) provincial capitals with the following in attendance: 167

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(a) Chairman or a representative of the Executive Committee; (b) Chairman or representative of the Technical Committee; and (c) chairman and members of the Sub-technical Committee. In places other than the abovementioned areas, a public hearing shall be held with the following in attendance – (a) Revenue Regional Director; (b) a representative of the Technical Committee; and (c) chairman and members of the Sub-technical Committee.

Notice of public hearing shall be given wide publicity in newspapers of general circulation, radio and television. The Revenue District Office concerned shall likewise disseminate the information by preparing notices to be posted in the places where the public hearing will beheld together with the letters of invitation to local officials association of realtors, civic organization, etc. In places where public hearing is not feasible, notice to the public regarding the recommended zonal values shall instead be made through the Municipal and Barangay (Village) Officials, by posting the said zonal values in public places for thirty (30) days and/or weekly publications in local newspapers of general circulation for three consecutive weeks. If no comments or objections are received within the said period, the schedule of values shall be finalized for final approval. 4. Implementation of Approved Zonal Values As soon as the Executive Committee accepts the zonal values, a Department Order on the implementation of the said zonal values shall be prepared for approval and signature of the Secretary of Finance. Upon issuance of the Department Order implementing the approved schedule of zonal values on real properties, the latter shall be published in the Official Gazette or any newspaper of general circulation. Said values shall be take effect fifteen days from the date of circulation. (b)

ZONAL VALUE COMPARED TO MARKET VALUE

The general standard for valuation of property for tax purposes is market value. Market Value is defined as the price a willing buyer would pay to a willing seller, assuming that neither is under any compulsion to buy or sell. It can also be described as the most probable price, as of specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to fair sale, with the buyer and seller each acting prudently, knowledgeable, and for self interest, and assuming that neither is under undue duress.

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As differentiated from market value, zonal value is a value set by the government for internal tax purposes and is derived at by taking into consideration factors such as location or zone of the property, its most recent selling price, appraisal valuation or realtors and the assessed values as prepared by the Provincial/City/Municipal Assessors. It can be said therefore that zonal values are some sort of a “compromise value” derived at from a diversified valuation procedure adopted or used by the different members of the recommending body. When these values are approved by the Secretary of Finance, then they become the statutory values of the properties until their subsequent revision or amendment. In the various zonal values approved by the Department of Finance, it can be observed that the zonal values are relatively lower than the current market value but is a more realistic valuation of properties for internal revenue tax purpose than those values on the same properties adopted by the local governments which is based on the assessed value.

E.

TAXES AFFECTED BY ZONAL VALUATION IN THE NATIONAL TAX SYSTEM Under the national tax system of the Philippines, the transfer, exchange or disposition of properties with or without consideration for so long as an economic benefit is derived thereat will give rise to a taxable activity. Basically, there are four types of taxes that are being collected from this kind of an activity, namely: 1. Capital Gains Tax 2. Estate Tax 3. Donors Tax 4. Documentary Stamp Tax The tax treatment on sale or exchange of real properties is dependent on the type of taxpayer (individual, estate or trust, or corporation) and on whether the property is considered a capital or an ordinary asset. For corporations, the actual gain on the sale or exchange of real property irrespective of its classification or ordinary or capital asset is subject to ordinary income tax. For individuals, the actual gain on the sale or exchange of real properties held as an ordinary asset is also subject to ordinary income. Ordinary assets as defined in Sec. 39 (A) (1) of the NIRC refers to all those properties which are primarily held for sale to customers in the ordinary course of trade or business. All other real properties sold or exchanged by an individual not included in the foregoing definition of ordinary assets are considered capital assets and as such, subject to capital gains tax. Presently, the capital gains tax on real property transfers 169

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is deemed an income tax that is separately assessed on each transaction and required to paid on the date the return presented therefor is filed by the person liable thereto. Capital gain is a presumed outcome of every real property transaction and the tax is imposed regardless of whether the property owner incurred a loss or income in the said transaction. The tax on ordinary gain or capital gain is based on the gross selling price or fair market value (zonal) of the property sold whichever is higher.

SECTION 3. - LAND USE PLANNING Section 20, par. (c), of the Local Government Code provides that “the local government units shall, in conformity with exiting laws, continue to prepare their respective comprehensive land use plans enacted through zoning ordinances which shall be the primary and dominant bases for the future use of land resources: Provided, that the requirements for food production, human settlement, and industrial expansion shall be taken into consideration in the preparation of such plans”. The above-quoted provision is being implemented under Art. 41 of the Implementing Rules and Regulations (IRR) which provided that: “ART. 41. Comprehensive Land Use Plans. – (a) Subject to applicable laws, rules and regulations, cities and municipalities shall continue to prepare their respective comprehensive land use plans enacted through zoning ordinances. The requirements for food production, human settlement, ecological balance, and industrial expansion shall be considered in the preparation of such plan. (b) The comprehensive land use plan shall be the primary and dominant basis for future use of local resources and for reclassification of agricultural lands. (c) The Sangguniang Panlalawigan shall review the comprehensive land use plans and zoning ordinances of component cities and municipalities and shall adopt comprehensive provincial land use plan, primarily based on the revised plan.” A. Objectives: -

to ensure the wise use of land and protection to critical environmental areas to intensify land productivity through modernization agricultural technology Protection, preservation and rehabilitation of critical environmental areas and watershed 170

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-

Utilization of land in accordance with its sustainability for a continuous production Increase productivity per unit area Prohibit population pressure on protected land areas Regulate conversion of prime agri-land for urban development

Municipal Planning and Development Office (MPDO) through Municipal Technical Working Group, Municipal Land use Committee -

responsible for the formulation, development and determination of the land use plan consistent with the provincial and national land use policy

MPDO will submit the proposed land use plan for the review and approval by the local Sanggunian Provincial Planning and Development Office (PPDO) -

to review/approve the land use plans submitted by the MPDO

Technical Working Group MPDO Chairman Chairman Municipal Assessor Member Municipal Agricultural Officer Member Municipal Agrarian Reform Office (MARO) – Member Municipal Engineer Member Local Government Officer Member Municipal Assessor – provide maps, classification, and actual use City Planning and Development Office (CPDO) Regional Land Use Committee -

Reviews/Approves the land use plan submitted by the PPDO and CPDO NEDA will be the lead agency

A. Definition of Terms (DAR

A. O. No. 07, S. 1997)

Agricultural Land – refers to land devoted to agricultural activity and not classified as mineral, forest, residential, commercial or industrial land. Comprehensive Land Use Plan – refers to a document accompanied by maps and similar illustrations which represent the community-desired pattern of population distribution and a proposal for the future allocation of land to the various land-using activities. It identifies the allocation, character and extent of the areas land resources to be used 171

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for different purposes and includes the process and the criteria employed in the determination of the land use. Land Use – refers to the manner of utilization of land, including its allocation, development and management. Land Use Conversion – refers to the act or process of changing the current use of a piece of agricultural land into some other use as approved by DAR. Reclassification of Agricultural Lands – refers to the act of specifying how agricultural lands shall be utilized for non-agricultural uses such as residential, commercial, as embodied in the land use plan, subject to the requirements and procedure for land use conversion. It also includes the reversion of non-agricultural lands to agricultural use. National Integrated Protected Areas Systems (NIPAS) - is the classification and administration of all designated protected areas to maintain essential ecological processes and life-support system, to preserve genetic diversity, to ensure sustainable use of resources of forest therein, and to maintain their natural condition to the extent possible. Environmental Critical Areas – refers to areas declared by laws as: 1) areas for natural parks, watershed reserves, wildlife preserves, and sanctuaries; 2) areas set aside as aesthetic potential tourist spots; 3) areas which constitute the habitat for any endangered or threatened species of indigenous Philippine wildlife (flora and fauna); 4) areas of unique historic, archaeologic, or scientific interests; 5) areas which are traditionally occupied by cultural communities and tribes; 6) areas with critical slopes; 7) areas frequently visited and/or hard hit by natural calamities (geologic hazards, floods, typhoons and volcanic activities); 8) areas classified as prime agricultural lands; 9) recharge areas of aquifers; 10) water bodies; 11) mangrove areas; 12) coral reefs; 13) mossy and virgin forests; 14) river bank; and 15) swamp forests and marshlands

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Socialized Housing – refers to housing programs and projects covering houses and lots or homelots only undertaken by the government, the private sector for the underprivileged and homeless citizens which shall include sites and service developments, long-term financing, liberalized terms on interests payments, and such other benefits in accordance with R.A. 7279. Special Economic Zones – refers to selected areas with highly developed or which have the potential to be developed into agro-industrial, industrial, tourist/recreational, commercial, banking, investment and financial centers. An ecozone may contain any or all of the following: industrial estates, export processing zones, free trade zones, and tourist recreational centers. Tourism Development Areas – refers to specific sites for tourism development located in areas identified as priorities in the national and regional tourism master plans, as well as those designated through legislation and executive issuances as tourist zones which can be developed into tourism estates or integrated resort, leisure and recreation complexes, and other tourism-related facilities. Watershed – refers to a catchment area or drainage basin from which the waters of a stream or stream system are drawn. Zoning – is the delineation/division of a city/municipality into functional zones where only specific land uses are allowed. It directs and regulates the use of all lands in the community in accordance with an approved or adopted land use plan for the city/municipality. It prescribes setback provisions, minimum lot sizes, building heights and bulk. Zoning Ordinance – refers to a local legislation approving the development control/zoning plan and providing for the regulations and other conditions, on the uses of land including the limitation on the infrastructures that may be placed thereon within the territorial jurisdiction of a city or municipality. B. Conversion of Agricultural Lands to Non-Agricultural Uses The Department of Agrarian Reforms (DAR) is mandated to approve or disapprove application for conversion, restructuring or readjustment of agricultural lands into non-agricultural uses pursuant to Section 4 (j) of E.O. No. 129-A, series of 1987. It is vested with the exclusive authority to approve or disapprove applications for conversion of agricultural lands for residential, commercial, industrial, and other land uses. Action on application for land use conversion on individual landholding shall remain as the responsibility of the DAR, which shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying ordinances passed upon and approved by the local government units 173

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concerned, together with the National Land Use Policy pursuant to R. A. No. 6657 and E.O. No. 129-A. The following may apply for conversion: 1. Owners of private agricultural lands or other persons duly authorized by the landowners. 2. Farmer-beneficiaries of the Agrarian Reform Program after the lapse of five (5) years from award, reckoned from the date of registration of their landholdings, and who have fully paid their obligations and are qualified under A. O. No. 07, Series of 1997 issued by DAR, or persons duly authorized by them. 3. Government agencies, including government-owned or controlled corporations. This shall cover all private agricultural lands as defined herein regardless of tenurial arrangement and commodity produced. It shall also include all untitled agricultural lands and agricultural lands reclassified by LGUs into non-agricultural uses after June 15, 1988, pursuant to M. C. No. 54, Series of 1993 of the Office of the President and those proposed to be used for livestock, poultry and swine-raising. * The following criteria were adopted as bases for the approval of applications for conversion: # Agricultural lands classified or zonified for non-agricultural uses by LGUs and approved by the HLURB before June 15, 1988 shall be governed by DAR Administrative Order No. 6, Series of 1994. # Conversion may be allowed if at the time of the application, the lands are reclassified as commercial, industrial, residential or other non-agricultural in the new or revised town plans promulgated by the local government unit and approved by the HLURB or by the Sangguniang Panlalawigan (SP) after June 15, 1988 in accordance with Section 20 of R. A. 7160, as implemented by M. C. No. 54, and E. O. No. 72, Series of 1993 of the Office of the President. # If the city/municipality does not have a comprehensive development /land use plan and zoning ordinance duly approved by the HLURB/SP but the dominant use of the area surrounding the land subject of the application for conversion is no longer agricultural or if the proposed use is similar to, or compatible with the dominant use of the surrounding areas as determined by the DAR, conversion may be granted. C. The following areas shall not be subject to or non-negotiable for conversion:

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"

Protected areas designated under the National Integrated Protected Areas (NIPAS), including watershed and recharged areas of aquifers, as determined by the Department of Environment and Natural Resources (DENR, pursuant to R.A. 7586 (1992).

"

All irrigated lands, as delineated by the DA and/or the National Irrigation Authority (NIA) under the Network of Protected Areas for Agriculture where water is available to support rice and other crop production, and all irrigated lands where water is not available for rice and other crop production but are within areas programmed for irrigation facility rehabilitation by the DA and the NIA, pursuant to Presidential Administrative Order No. 20 (1992): For this purpose, the Network of Protected Areas for Agriculture (as of 1991), as determined by the DA and/or NIA shall serve as guide in determining non-negotiable areas. All irrigable lands already covered by irrigation project with firm funding commitments, as delineated by the DA and/or NIA; and All agricultural lands with irrigation facilities operated by private organization. In all cases, applicants for conversion involving lands protected from and nonnegotiable for conversion shall not be given due course.

" " " "

D. The following areas shall be classified as highly restricted from conversion: # Lands classified as Highly Restricted from Conversion in the Network of Protected Areas for Agriculture as delineated by the DA, as follows: -

Irrigable lands without irrigation project with firm funding commitments;

-

Agro-industrial croplands, or lands presently planted to industrial crops that support the economic viability of existing agricultural infrastructure and agro-based enterprises; and

-

Highlands, or areas located in elevations of 500 meters or above and have the potential for growing semi-temperate and usually high value crops.

# Lands issued a Notice of Acquisition/Valuation under the agrarian reform program or subject of a perfected agreement between the landowner and the beneficiaries under the Voluntary Land Transfer (VLT) or Direct Payment Scheme (DPS) under CARP; and # Areas identified as environmentally critical as determined by the DENR, pursuant to P.D. 1586 (1978) and is implementing rules and regulations. Lands falling under this classification may only be converted upon compliance with existing laws and submission of the following: -

Social Benefit-Cost Analysis approved by the DA; and

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-

Environmental Impact Assessment (EIA) and/or Environmental Clearance Certificate (ECC) for lands falling under 4 above.

SECTION 4. – REAL PROPERTY TAX ADMINISTRATION (RPTA) PROJECT RPTA is a country-wide program administered by the Department of Finance through the Bureau of Local Government Finance (BLGF-DOF) in cooperation with the USAID, World Bank and all the local government units (LGUs). It is a program involved in the upgrading of assessment services by updating of assessment techniques, procedures and practices. A. Objectives of the RPTA RPTA was designed to develop real property tax system to its fullest potential as a local revenue source with the following specific objectives: 1. To evolve a comprehensive system of real property appraisal that will ensure fair and realistic property valuation for taxation purposes; 2. To establish uniform assessment methods and procedures to standardize property values in each LGU; 3. To ensure that the ad valorem tax on real property shall be just, uniform and equitable; 4. To adopt the necessary measures that will promote maximum tax collection efficiency at the local levels; 5. To provide for optimum utilization by the local government of the proceeds from the real property tax collection; 6. To formulate and adopt policies and procedures to improve technical skills and develop reasonable standards of performance in the local assessment and treasury services. B. Incentives available from the RPTA Project The RPTA Project will provide technical and financial assistance and incentives to the LGUs participating in the project under the Project Cost Sharing Scheme indicated under 5.4.6 of this Chapter. C. Major Components of the RPTA Project To facilitate effective administration of the RPTA, it has devised a system composed of the following four (4) major components which is an integration of technical and administrative processes based upon the value of real properties: 1. 2. 3. 4.

Tax Mapping Records Conversion Tax Collection Data Computerization 176

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D. How will the RPTA Project Be Implemented? The RPTA Project is to be implemented on the national, regional, provincial and City/Municipal levels 1) National Level – The BLGF-DOF has the legal authority and responsibility to ensure that the RPTA system installation is in full consonance with existing laws, rules, regulations, policies and procedures. It monitors the activities of the Provincial/City/Municipal Assessors and Treasurers who, in turn, will be responsible for the implementation of the Project in their respective provinces/cities/municipalities. 2) Regional Level As the implementing arm of the BLGF-DOF, the Regional Offices of the BLGF-DOF shall perform the following functions within their respective regions: 1. To supervise and coordinate RPTA projects; 2. To monitor the implementation of RPTA directives through the provincial, city/municipal assessor’s and treasurer’s offices; 3. To recommend action on the LGU applications for participation in the Project; 4. To compile and analyze RPTA statistical data 5. To undertake other related activities as directed by the BLGF, DOF. 3) Provincial/City Level – The Provincial/City level RPTA Task Force shall be composed of the following local officials; additional members may be disseminated at the discretion of the Local Chief Executive, to wit: Provincial Governor or City Mayor - Chairman Provincial or City Assessor – Member Provincial or City Treasurer – Member 1 Local Sanggunian Member – Member

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•

Functions: 1. To plan and implement multi-year Provincial/City RPTA Programs including the IEC 2. To monitor and evaluate RPTA Projects of municipalities, cities/districts in cooperation/coordination with the BLGF Regional Offices 3. To review and recommend actions on requests of municipalities for project participation 4. To submit progress reports and statistical data through the BLGF Regional Offices. 5. To undertake related activities as directed by the BLGF- DOF

4) Municipal Level – The Municipal Task Force shall be created in every participating municipality composed of the following members, additional members may be disseminated at the discretion of the Municipal Mayor, to wit: Municipal Mayor Municipal Assessor Municipal Treasurer 1 Local Sanggunian Member •

-

Chairman Member Member Member

Functions: 1. To prepare RPTA Program in coordination with the Provincial Assessor 2. To coordinate, facilitate and recommend to the Sanggunian the appropriate budget/financing of the logistic and support services for the RPTA project implementation 3. To prepare requests for financing and participation in the Project 4. To prepare and submit periodic progress reports and statistical data

E. Role of the Local Chief Executive in the RPTA Project The Local Chief Executives, being heads of LGUs will be directly involved in the initial planning, implementation and monitoring of the RPTA 178

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Project and shall be responsible for disseminating information about the RPTA Project to their constituents. F. How is the Financing of the RPTA Project? The RPTA Project Total Cost shall be shared by the national government through grant/national assistance and the LGU concerned as follows: LGU Income Class/ % Contribution

In case of Province/Municipality National Government Province Municipality

LGU Equity Province Municipality

TOTAL

In case of a City: National Government City LGU Equity City TOTAL

1st & 2nd

3rd & 4th

5th & 6th

30% 30% 60% ====

35% 35% 70% ====

40% 40% 80% ====

20% 20% 40% ==== 100% ====

15% 15% 30% ==== 100% ====

10% 10% 20% ==== 100% ====

60%

70%

80%

40% 100% ====

30% 100% ====

20% 100% ====

G. How can an LGU participate in the RPTA Project? An LGU can Participate in the Project upon submission/compliance with the following: 1. Letter of intent of the Local Chief Executive (LCE). 2. Sangguniang Panlalawigan and Sangguniang Bayan Resolution (in case of municipality)/Sangguniang Panlunsod Resolution expressing commitments as follows:

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• • • •

To authorize the LCE to enter into Memorandum of Agreement with DOF, through the BLGF; To provide the required equity; To provide annually adequate funds for the proper maintenance of completed project; To support Real Property Tax Collection Enhancement Program (RPTCEP).

3. Base Maps should be available 4. Accessible to transportation 5. Peaceful political environment to conduct field work H. Role of the Local Government Officials, Treasurers in the RPTA – IEC Program (a) Local Government Officials: 1. Availability to their constituents to answer inquiries about the RPTA Project 2. Dissemination to all intended audiences 3. Give all possible support to Local Assessors and Treasurers to successfully carry out their duties and responsibilities 4. Encourage constituents to pay real property taxes honestly and promptly 5. (b) Local Assessors and Treasurers 1. Availability of reference or guide materials on RPTA to answer inquiries about the RPTA Program 2. Communication Agent of the RPTA Program

SECTION 5.- CLARIFICATORY CONSTRUCTION

(a) SEC. 226. Local Board of Assessment Appeals.- Any owner or person having legal interest in the property who is not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may, within sixty (60) days from the date of receipt of the written notice of assessment, appeal to the Board of Assessment Appeals of the province or city by filing a petition under oath in the form prescribed for the purpose, together with copies of the tax declarations and such affidavits or documents submitted in support of the appeal.

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SEC.252. Payment Under Protest. – (a) No protest shall be entertained unless the taxpayer first pays the tax. There shall be annotated on the tax receipts the words “paid under protest”. The protest in writing must be within thirty (30) days from payment of the tax to the provincial, city treasurer or municipal treasurer, in the case of a municipality within Metropolitan Manila -Area, who shall decide the protest within sixty (60) days from receipt. (b) The tax or a portion thereof paid under protest shall be held in trust by the treasurer concerned. (c) In the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against his existing or future tax liability. (d) In the event that the protest is denied or upon the lapse of the sixtyday period prescribed in subparagraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3, Title Two, Book II of this code. There seems to be a conflict on the period within which a taxpayer is given the right to appeal the assessment made by the assessor on his property. However, assessors should legally invoke Section 226 whenever appropriate in cases of appeals of assessment. 1. Section 226 is under Chapter III, titled Assessment Appeals while Section 252 is under Chapter 6, titled Collection of Real Property Tax of R.A. 7160 such that the period within which to appeal must strictly conform with Section 226, R.A. 7160. 2. If the property owner made his appeal on the basis Section 252, R.A. 7160, his protest shall be acted upon if the reglamentary period provided for under Section 226 has not yet prescribed. 3. Section 252 without reference to the period provided for under Section 226 will render the latter provision negatory for it will give the taxpayer the right to appeal beyond the statutory period of appeal. b. Lands shall be assessed on the basis of the current and fair market value of the street or place of location. The assignment of the assessment level serves the purpose of classification of the lot based on the actual use or predominant use of the land in the area if vacant, and for the purpose of applying the current tax rate based on classification. c. If the property is exempt on the tax day (January 1), then it is exempt for the whole year even though it becomes taxable after the tax day. If the property is

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taxable on the tax day (January 1) then it is taxable for the whole year even though it becomes exempt after the tax day. d. Real properties declared for the first time shall be assessed on the basis of the approved schedule of values during the effective date of the commencement of tax liability and not during the time the assessment was made specially when back taxes are imposed on the property. If general revision takes place after the initial assessment, then the assessment should be correspondingly revised to reflect the new schedules of values. e. Sec. 221. Date of Effectivity of Assessment or Reassessment. - All assessments or reassessments made after the first (1st) day of January or any year shall take effect on the first (1st) day of January of the succeeding year; Provided, however, that the reassessment of real property due to its partial or total destruction, or to a major change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or to any other abnormal cause, shall be made within ninety (90) days from the date any such cause or causes occurred, and shall take effect at the beginning of the quarter next following the reassessment. This provision shall apply to all existing assessments of real properties which taxes by operation of law should be paid annually such that in cases of change of ownership, location, subdivided or consolidated properties, the effective date of the commencement of taxes shall be the 1st day of January of succeeding year. Provided that all real property taxes for the current year contrary opinion on this provision, will run counter to the provision of Section 203 and 222 of R.A. 7160 which provide as follows: Sec. 203. Duty of Person Acquiring Real Property or Making Improvement Thereon. – It shall also be the duty of any person, or his authorized representative, acquiring at any time real property in any municipality or city or making any improvement on real property, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of subject property, within sixty (60) days after the acquisition of such property or upon completion or occupancy of the improvement, whichever comes earlier. Sec. 222. Assessment of Property Subject to Back Taxes. – Real property declared for the first time shall be assessed for taxes for the period during which it would have been liable but in no case for more than ten (10) years prior to the date of initial assessment: Provided, however, That such taxes shall be computed on the basis of the applicable schedule of values on force during the corresponding period. If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid. 182

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f. Sec. 225. Depreciation Allowance for Machinery. – For purposes of assessment, a depreciation allowance shall be made for machinery at a rate not exceeding five percent (5%) of its original cost or its replacement or reproduction cost, as the case may be, for each year of use: Provided, however, That the remaining value for all kinds of machinery shall be fixed at not less than twenty percent (20%) of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation. This Section does not authorize the local assessor to grant depreciation allowance to machinery and equipment. The grant of depreciation to this property is dependent upon the determination cost which the local assessor is mandated to determine as a condition precedent to the grant of depreciation. Further, accumulated depreciation is already and is previously imposed upon machinery and equipment during general revision through the mandatory use and application of the formula for the computation of its current and fair market value. g. Sec. 231. Effect of Appeal on the Payment of Real Property Tax. – Appeal on assessments of real property made under the provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal. The appeal on assessment mentioned under this provision refers to the appeals on the real property assessments made by the assessor pursuant to the provisions of Sections 226 and 252, R.A. 7160, and the payment of realty taxes as condition precedent to the appeal does not apply to cases brought before the court where questions of law, legality of the law or ordinance or constitutionality of the law is being raised.

SECTION 5. - ASSESSMENT LOAN REVOLVING FUND (ALRF) An Assessment Loan Revolving Fund (ALRF) was created pursuant to P.D. 1002, which provides as follows: “Assessment Loan Revolving Fund. – The sum of fifty million pesos is hereby appropriated out of the unallocated balance of internal revenue allotments to local governments, after distribution of their individual shares pursuant to Section One of Presidential Decree No.144, as amended, to constitute an Assessment Loan Revolving Fund for financing tax-mapping projects, periodic revision of assessments, and other real property assessment programs of provinces, cities and municipalities. Such fund shall be administered by the Secretary of Finance and shall be loaned without interest to provinces, cities and municipalities, under such terms and conditions as he may impose.”

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5.1 Who Can Avail the Loan from the ALRF? All provinces, cities and municipalities can avail of the loan from the P50-M Assessment Loan Revolving Fund to finance any of the following programs/projects: 1. Tax mapping project 2. General Revision of Real Property Assessments 3. Other real property assessment programs A. Who Administered the Fund The P50-M ALRF is administered by the Bureau of Local Government Finance, Department of Finance (BLGF-DOF) available as loan to the province, city or municipality at an amount not exceeding their borrowing capacity as Certified by the BLGF, payable in five (5) equal annual installments without interest. B. How To Apply For ALRF The loan application by the province, city or municipality shall be filed in the BLGF, 8th Floor, EDPC Building, Bangko Sentral ng Pilipinas Complex, Roxas Blvd., Manila. The Loan application shall be accompanied by the following documents: 1. A resolution of the Sangguniang Panlalawigan, Sangguniang Panlungsod or Sangguniang Bayan, authorizing the Provincial Governor, City or Municipal Mayor to enter into a loan agreement with the Department of Finance, indicating the amount of loan desired and the specific project to be undertaken (MOF Assessment Regulations No.4-77 dated May 23, 1977). 2. A Project Study and Action Plan (PSAP).

C. Release of Loan Proceeds The proceeds of the loan shall be released to the Provincial/City/ Municipal Treasurer concerned in the following manner: 1st Release – 50% of the approved loan to be used primarily for the purchase and acquisition of supplies and materials, furniture and equipment, base maps and other expenses necessary in the initial stage of project implementation. 2nd Release - 30% of the approved loan.

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1. Submission of the Report of Actual Accomplishments of the Project duly certified by the Assessor concerned. 2. Submission of the Report of Actual Expenditure covering the 1st release jointly signed by the Assessor and the Treasurer; 3. Favorable recommendation by the representative of the BLGF-DOF (Central Office), who evaluated the Project in the field. 3rd Release - 20% of the approved loan. Requirements: 1. Certification by the Assessor concerned that the project financed by the loan is at least 75% completed and duly attested by the Governor/Mayor; 2. Submission of the Actual Accomplishment of the project duly certified by the assessor; 3. Submission of the report of actual expenditures covering the 2nd release jointly signed by the assessor and treasurer; and 4. Favorable recommendation by the representatives of the BLGF – Central Office. D. Terms and Conditions of the Loan The terms and conditions of the loan are defined in the Contract of Loan executed by and between the DOF and the Provincial Governor/City Mayor/Municipal Mayor. A sample of the Contract is shown hereunder:

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CONTRACT OF LOAN KNOW ALL MEN BY THESE PRESENTS:

This is a CONTRACT OF LOAN executed by and between the ………………………………………………, represented by the …………………… ………….., hereinafter known as the PARTY OF THE FIRST PARTY and the Republic of the Philippines, represented by the Department of Finance, Administrator of the Assessment Loan Revolving Fund, established by virtue of Presidential Decree No.1002, hereinafter known as the PARTY OF THE SECOND PARTY.

-WITNESSETH-

That the PARTY OF THE FIRST PARTY having accomplished the documents and information required under Section 4.5.3 of Chapter 4 of this Manual on Real Property Assessment and Administration. That the PARTY OF THE FIRSYT PARTY having submitted to the PARTY OF THE SECOND PARTY all the required supporting papers incident to the application of loan. NOW, THEREFORE, for and in consideration of the foregoing premises, the PARTY OF THE SECOND PARTY hereby grants and approves a loan in the amount of ………………………………………….., Philippine Currency, out of the Assessment Loan Revolving Fund to the …………………………………… and that the PARTY OF FIRST PARTY hereby accepts said loan subject to the following terms and conditions: 1. That the proceed of the loan shall be expended on the basis of the estimated costs of the project as itemized in the Project Study and Action Plan submitted by the borrower…………………………….. which Plan is hereby made an integral part hereof as Annex “A”. 2. That the initial release of the proceeds of the loan shall be approximately50% hereof, the date of release and the amount thereof shall be scheduled and determined by the Department of Finance. 3. That the prosecution of the project shall be started not later than sixty days from the date of receipt of the amount covering the first release of the loan. 4. That the project shall not be let to any private person. 5. That the second and last releases of the portions of the loan, shall be subject to a prior submission of “progress report” to the Executive Director, Bureau of Local Government 186

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Finance, copy furnished the Accounting Division, both of the Department of Finance, duly verified by the representatives of the BLGF-DOF who personally inspected the project; 6. That the period of repayment of the annual proceeds of the loans shall be for five (5) years in equal annual amortization, to commence on or before the end of December of the year following the year of completion of the project until the same have been fully paid and liquidated; Provided, however, That if the project is not finished even after the full release of the loan, the repayment shall commence on or before the end of December of the year following the year of the last release of the loan. 7. That the completion of the project, for purposes of determining the running of the period of repayment, shall be certified by the BLGF-DOF representative who inspected and evaluated the project; 8. That in case the borrower ______________________ concerned fails to pay the annual amortization when due, the same shall automatically be deducted from its share from the internal revenue allotment of the borrower _______________ ______________, which allotment is hereby made as a guaranty of the repayment of whatever loan released; 9. That the proceeds of the loan, or any portion thereof, shall in no case be used, temporarily or otherwise, for any other purpose by the borrower _________________________ except for the financing and implementation of the project described hereunder:

That the PARTY OF THE SECOND PARTY reserves the right to rescind this contract whenever public interest so demands. IN WITNESS WHEREOF, the parties have hereunto set their hands at Manila, Philippines, on this ………….. day of ………………………, 2000. PARTY OF THE FIRST PARTY

PARTY OF THE SECOND PARTY

Represented by: ………………………………………

Represented by: ………………………………………

SIGNED IN THE PRESENCE OF: …………………………….

………………………………

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ACKNOWLEDGMENT

REPUBLIC OF THE PHILIPPINES) C I T Y O F M A N I L A) S.S.

BEFORE ME, a Notary Public for and in the City of Manila, personally appeared ……………………………………….. representing the PARTY OF THE FIRST PARTY with Community Tax Certificate No. ……………….., issued on ……………………….., at ……………………………….. and………………………………….. representing the PARTY OF THE SECOND PARTY, with Community Tax Certificate No………………., issued on ………………………. At ……………………………., known to me and to me known to be the same persons who executed the foregoing document denominated as a “Contract of Loan” and who acknowledged having executed the same of their own free will and deed. The fore going document consisting of three (3) pages including this page wherein the acknowledgment appears are duly signed by the parties and their instrumental witnesses on the left hand margin thereof. IN WITNESS WHEREOF, I have hereunto set my hand and notarial seal in the City of Manila, Philippines, this………… day of ………………………, 2000.

NOTARY PUBLIC BOOK NO…………… PAGE NO……………… BOOK NO. …………… SERIES OF 2001

Until December 31, 200……… PTR No…………………………. Issued on ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,. At ………………………………

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Glossary of Terms 1. Tax Mapping – is the primary concern of the Municipal Assessor and City Assessor and the first component undertaken in the installation of the RPTA Project which involves physical survey of land parcels for the following purposes: a) b) c) d)

Proper identification of real properties and property owner Determining the lines or boundaries of real properties Assigning of Property Index Number (PIN) Developing tax maps which would show a graphical presentation of a property’s earth surface drawn to scale.

2. Assessment Operations – is a means of assigning on every parcel of land and upon all the taxable improvements on such lands, a current and fair market value, an assessment level to be able to arrive at an assessed value for each land and each improvement. 3. Records Conversion and Management (RC) – is the establishment and maintenance of permanent official records and files in the office of the Provincial, City or Municipal Assessor so that an updated and regular listing of all properties is readily available. It also serves as a basis for a more accurate collection of real property tax and establishes the all important control link between assessment and tax collection operations. 4. Real Property Tax Collection Operation – involves collection of all real property taxes and penalties due and payable to the LGU through the positive and total enforcement of tax laws and their penal provisions. 5. Data Computerization – encompasses all activities leading to the establishment and operationalization of a computer-assisted data base for Real Property Tax Administration (RPTA) among which includes the familiarization/training of key personnel, encoding and validation of data acquisition and installation of standard RPTA system, generation of reports and preparation of complementary manual of procedures. 6. Information, Education Campaign (IEC) Program – is the RPTA Information kit for use of the LGU officials, assessors and treasurers in the RPTA Project.

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CHAPTER 5 PENAL PROVISIONS The Local Government Code provides penalties for violations of its provisions. The following provisions are applicable to local officials involved in assessment operations: 1. Any local official and any person or persons dealing with him who violate the prohibitions provided in Section 89 of Book I of LGC, shall be punished with imprisonment for six (6) months and one (1) day to six (6) years, or a fine of not less than Three Thousand Pesos (P3, 000.00) nor more than Ten Thousand Pesos (P10, 000.00), or both such imprisonment and fine, at the discretion of the court. 2. Section 89 of the Code enumerates the following prohibited business and pecuniary interest: 1) Engaging in any business transaction with the local government unit in which he is an official or employee or over which he has the power of supervision, or with any of its authorized bards, officials, agents or attorneys, whereby money is to be paid, or property of any other thing of value is to be transferred, directly or indirectly, out of the resources o the local government unit to such person of firm; 2) Holding such interest in any cockpit or other games licensed by a local government unit; 3) Purchasing any real estate or other property forfeited in favor of such local government unit for unpaid taxes or assessment, or by virtue of a legal process at the instance of the said local government unit; 4) Being a surety for any person contracting or doing business with the local government unit for which a surety is required; and 5) Possessing or using any public property of the local government unit for private purpose.” 3. Any officer charged with the duty of assessing real property who willfully fails to assess, or who intentionally omits from the assessment or tax roll any real property which he knows to be taxable, or who willfully or negligently underassesses any real property, or who intentionally violates or fails to perform any duty imposed upon him by law relating to the assessment of taxable real property shall, upon conviction, be punished by a fine of not less than One Thousand Pesos (P1, 000.00) nor more than Five Thousand Pesos (P5,000.00), or by imprisonment of not less than one (1) month nor more than six (6) months, or both such fine and imprisonment, at the discretion of the court.

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The same penalty shall be imposed upon any officer charged with the duty of collecting the tax due on real property who willfully or negligently fails to collect the tax and institute the necessary proceedings for the collection of the same. Any other officer required by this Code to perform acts relating to the administration of the real property tax or to assist the assessor or treasurer in such administration, who willfully fails to discharge such duties shall, upon conviction be punished by a fine of not less than Five Hundred Pesos (P500.00) nor more than Five Thousand Pesos (P5, 000.00) or imprisonment of not less than one (1) month nor more than six (6) months, or both such fine and imprisonment, at the discretion of the court.”(Sec. 517, RA 7160) 4. Any government official who intentionally and deliberately delays the assessment of real property or the filing of any appeal against its assessment shall, upon conviction, be punished by a fine of not less than Five Hundred Pesos (P500.00) nor more than Five Thousand Pesos (P5, 000.00), or by imprisonment of not less than one (1) month nor more than six (6) months, or both such fine and imprisonment, at the discretion of the court.” (Sec. 518, RA 7160)

CHAPTER 6 REPEALING AND EFFECTIVITY CLAUSE Section 1. Repealing Clause. – All rules, regulations and orders inconsistent with the provisions hereof are hereby repealed or modified accordingly. Section 2. Effectivity. – This Assessment Manual shall take effect immediately.

JOSE ISIDRO N. CAMACHO Secretary

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