Our Philippine House Project – Philippine Real Estate Taxes

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Now that our Philippine house has been completed and we have moved in, our next task is to meet with the municipal assessors and make a declaration of market value of our improvements (house) as required under section 203 of the Philippine Local Government Code. The land is separately assessed and taxed.

In the U.S., assessors kept an eagle eye out for any improvements and were quick to reassess real estate.  Copies of building permits and certificates of occupancy went to assessors to be sure they did not miss anything.  That seems to be true in the Philippines too, but here the onus is on the property owner to prepare and submit a sworn statement of the market value of improvements to the municipal assessors.

These are the relevant sections of the code:

THE LOCAL GOVERNMENT CODE OF THE PHILIPPINES (R.A. 7160, Book II, Title II, Chapter 2, Sec. 201-214)


SEC. 201. Appraisal 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 Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code.

SEC. 202. 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 therein, 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.

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. 204. Declaration of Real Property by the Assessor. – When any person, natural or juridical, by whom real property is required to be declared under Section 202 hereof, refuses or fails for any reason to make such declaration within the time prescribed, the provincial, city or municipal assessor shall himself 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 provision of this Title. No oath shall be required of a declaration thus made by the provincial, city or municipal assessor.

Taxes – The Bottom Line

According to the website below, the tax on assessed value is 1% of assessed value in the provinces and 1 1/2 to 2% in cities.  The assessed value ranges from a basic 20% to as high as 60% on high value improvements.  So, an improvement with a market value of P1,000,000  might be assessed at P300,000 and a 1% tax of P3,000 levied.  More information is available at:


The 2011 market value of our house and lot are assessed at P892,500.  The assessed value of the house and lot is P260,550.  Our annual property taxes will be P5,200 or about U$ 130.00.  If paid in advance (in December for example) a 20% discount applies so our 2012 taxes should be about P4,200 or about $100 USD.


Comments (9) Write a comment

  1. Hi Bob and carol, thanks for your efforts in the our Philippine house project its wonderful. i would like to see the landscaping section but its down just now.
    carol lovely dish pics maybe you could do a “how to” page, i will show them to my lovely filipina wife Lorna. Thanks in antisipation of resurecting the landscaping section.



    • David,

      I had forgotten that we had not yet finished the landscaping section. That’s why you can’t access it yet. Sorry about that. We will have to get to work!

      We’ve stopped in Bogo on our way to Bantayan and Malpascua. Seems like a nice small town.

      Bob and Carol


  2. Hi Bob,

    Great Site, My wife is from Cebu and I have seen some very negative posts regarding Cebu especially about air polution etc. While this maybe true of Cebu city it is not of the Island as a whole.

    my wife and I are about to embark upon a building project.

    We have identified a lot and have had it survey waiting for the result I am not sure why we had to have a survey as we also have to engage a lawyer to verify the property does actually belong to the person we are buying from. I have left everything upto my wife so far as I suspected that if I was involved the price may suddenly escalate.

    3 years ago we bought an old house in Danao City and renovated, in fact we virtually built a new house around the old one. Unfortunately I suffered a hard drive crash and lost all of my purchasing records.

    I left the purchase to my wife and was not overly pleased with the location, which I would characterise as being in someone’s back yard.

    So this time having been a little more involved with the selection without actually visiting myself.

    I digress the point of this post was to say I will be making use of your experience to hopefully avoid some of the pitfalls.

    The new lot is on Cebu a short distance from Catmon.

    B happy,



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  4. Hi Bob,
    I have been trying to compute how your tax arrived at Php5,200.00.
    Your cost was Php3,072,000.00 which according to the link you sent would result in an accessed value of Php1,228,830. How did they assess at Php875,000.00. Or are certain costs excluded.
    Secondly Php5,200.00 as a percentage of Php875,000.00 is less than 1%.
    I am not knocking you just curious or shouldn’t I ask?.


    • I won’t have the exact details about the real estate property assessment for a few more days. They just gave us the bottom line. However, the basic answer is that market value and assessed value are not always the same thing. Also, cost of construction is not the same as market value as determined the assessors. Assessors are supposed to determine market value by comparing your property to similar properties in the community, “comparables”. It’s totally possible to spend more building a house than it can be sold for (market value). That’s certainly what we did! Our house was built to suit us but really is a quite plain bungalow — not at all what most Filipinos would expect in an expensive house. Viewed in strictly financial terms, our house is a terrible investment. But, we did not build it too sell it. We built it to accommodate the type of life we enjoy living. In that sense, it’s a great investment.

      The P875,000 figure is the assessor’s estimate of *market value* of the house — excluding the land. Various units of government determine *assessed* value using a percentage of market value. Then the assessed value is multiplied by the tax rate to get the actual tax owed. So in our case a market valuation of P875,000 x assessment percentage of 30% equals assessed value of P262,500. A tax rate of 2% of assessed value yields a tax of P5,250.

      This was very similar to the system we had in New York State.

      I don’t know what will happen to the assessment of our land. Currently it’s considered agricultural land and taxes are minimal. Possibly they will go up, hopefully not too much!


      • Bob,
        Many thanks. your reply was most enlightening, I was always under the impression that the improvement tax was based on the construction cost of the house. Now I know better.


  5. You have a humble bungalow here. Where did you bulid your house then? In Iloilo City proper or in a town? I built my own in a farm, a 30 minute drive from the town of Janiuay.


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