You finally made it! You finally own your dream home. But what comes next? Of course owning a property here in the Philippines comes with great responsibilities. One of which is paying proper tax.
Yes, the Philippines have a designated tax for properties. It’s under the Local Government Code of 1991 or Republic Act no. 7160 where it is said that everyone who is a citizen of this country should pay Real Property Tax (RPT) annually.
What does Real Property Tax involve? How does it computed? What are the benefits of having one? If you want to know the answer, then keep reading this article. Persquare shared some important information about Real Property Tax that every property owner should definitely know.
What is Real Property Tax?
As mentioned earlier, RPT is a law imposed by the Local Government Code (LGC) that says that everyone who owns a property here in the Philippines should pay tax every year. The owner or the administrator of the property is the one who needs to pay the tax.
When and where should I pay my RPT?
You can pay your RPT at your City or Municipal Treasurer’s office. It’s always located in the City or Municipal Building.
Now if you want to pay your real estate tax for one whole year, you can do so on or before January 31. There are special cases where you can get a 20% discount though; if the basic real property tax and the additional tax from the Special Education Fund are paid in advance, then you can avail of this discount.
If you want to pay in installments, then the four quarterly installments should be paid on or before the last day for each quarter. That means March 31, June 30, September 30, and December 31.
What happens when I did not pay the RPT?
So you’ve been a little naughty and you forgot to pay your RPT. What are the consequences of this action? Well, of course you’ll get penalties. You’ll receive a 2% increase at the interest rate per month month on the unpaid amount to a maximum of 72% or 36 months. Now that’s a hard bargain.
What is it used for?
The revenue generated from real estate taxes and property taxes are used to help pay for local services, like road construction and maintenance, public schools, and other local improvements.
How exactly is the property assessed?
Properties are usually checked or appraised by a professional property appraiser. These guys are needed in order to assess a property’s fair market value or FMV. The FMV is an estimate of how much the property would sell if sold in the open market. Then, the local government would place an assessment rate, which is basically the percentage of the FMV. Afterwards, it calculates the assessed value.
Where should I ask questions?
Then you can either talk with your real estate agent for clarifications. You know, professionals are a source of wisdom when it comes to talking about their sector. However, if you are planning to buy a house, you can always have a look our portal in case you can find something you are interested in. We are sure that once you have done, you will be able to mange on the real estate taxes world. You will have no other choice!
