THE formulation and implementation of the revised Real Property Tax (RPT) Code of Cebu City has been delayed for a year or two, subject to conformity with the new law.
In a phone interview on Friday, Sept. 20, 2024, City Councilor Noel Wenceslao said that the City Council decided to archive the proposed revised Cebu City RPT Code until the Implementing Rules and Regulations (IRR) of Republic Act 12001, or the Real Property Valuation and Assessment Reform Act of 2024 (RPVARA), are released.
Wenceslao, who chairs the budget and finance committee, explained that under the law, local government units (LGUs) have been relieved of setting real property valuations.
The law standardizes the setting of real property valuation and adopts the schedule of market values (SMVs) as the single real property valuation base for the assessment of real property-related taxes at a national level.
Wenceslao said the law sets uniform valuation determination across the country.
“Under the new law, it’s no longer the responsibility of the LGU, local assessor units and sanggunian to determine the valuation of properties. Under the new national law, the BLGF (Bureau of Local Government Finance) will recommend the valuation,” Wenceslao said in a mix of English and Cebuano.
President Ferdinand Marcos Jr. signed RA 12001 into law last June 13.
Under RA 12001, the BLGF will be the agency responsible for updating the valuation of properties, both land and structures. LGUs will now be limited to the assessment of properties and imposition of RPT, Wenceslao said.
However, if the BLGF valuation is higher and the business community cannot afford it, Wenceslao said the council has the option to adjust the assessment and the tax rate at a maximum of three percent.
“We can lower or raise the assessment level within the ceiling set by the law,” he said.
“The council’s job is much simpler now, but we can’t implement it yet because we’re waiting for the IRR,” he added.
Wenceslao said that once the IRR are set, in the first two years of the law, a tax amnesty could be implemented to cover penalty fees, surcharges and other charges. This will allow property owners to pay their arrears in property taxes without penalties.
With the new law, the upcoming approval of the proposed revision of Cebu City’s RPT Code will be based on the BLGF valuation as stated in the law, including other provisions, he said.
The BLGF team will be composed of real estate brokers and licensed appraisers who will determine the value of properties for specific locations and structures.
Wenceslao said the release of the IRR might take until the end of the year or early next year.
Last Feb. 14, Wenceslao announced that he had the final draft of the new and revised RPT Code ordinance that had remained untouched since 2003; however, it is now shelved in lieu of the new law.
The proposed revised RPT Code ordinance, pushed by preventively suspended Mayor Michael Rama since 2022, set the schedule of fair market values and marked the adjustment of real property taxes.
The current valuation of properties in Cebu City is the lowest compared to neighboring LGUs.
However, business entities and property owners have expressed opposition to the new RPT Code, as the adjustment is abrupt and high without consideration of its economic impact.
Wenceslao looks forward to the full implementation of the revised RPT Code and the new law as this will increase the City’s revenue to provide better services to constituents. / EHP