Philippines: Tax amnesty on real property taxes under the Real Property Valuation and Assessment Reform Act

24 Jan 2025    2 minute read
Real Estate Tax Tax Amnesty

In brief

The Bureau of Local Government Finance (BLGF) issued Memorandum Circular No. 003-2025, dated 6 January 2025, reiterating the implementation of the tax amnesty on real property taxes under Republic Act No. 12001 ("RA No. 12001"), also known as the Real Property Valuation and Assessment Reform Act (RPVARA). The tax amnesty offers relief for unpaid real property taxes incurred prior to 5 July 2024 and is available until 5 July 2026. 

Contents

Background

RA No. 12001, which became effective on 5 July 2024, seeks to standardize real property valuation in the Philippines, ensuring transparency, equity and increased revenues for local government units (LGU).

A key provision under Section 30 of the RPVARA introduces the grant of a tax amnesty to unpaid real property taxes incurred before the act's effectivity. The amnesty aims to alleviate financial burden on property owners and encourage settlement of outstanding tax obligations.

The BLGF's memorandum circular reiterates the mandate of the law and reminds LGUs of their role in implementing the tax amnesty provision of RA No. 12001, emphasizing key details taxpayers should know to take advantage of the relief.

  • The tax amnesty covers penalties, surcharges and interests from all unpaid real property taxes, including the Special Education Fund, idle land tax and other special levy taxes, prior to the effectivity of RA No. 12001 on 5 July 2024.
  • Relief may be availed of within two years from the act's effectivity or until 5 July 2026.
  • Delinquent property owners may opt for a one-time payment or installments, subject to local ordinances. The absence of such ordinances, however, should not delay or prevent the implementation of the amnesty program.
  • The tax amnesty does not apply to the following:
  1. Delinquent real properties that have been disposed of at a public auction to satisfy the real property tax delinquencies.
  2. Real properties with tax delinquencies that are being paid pursuant to a compromise agreement.
  3. Real properties that are the subject of pending cases in court for real property tax delinquencies.

Key takeaway

Property owners with outstanding real property taxes are encouraged to take advantage of this limited-time amnesty program, which is available until 5 July 2026. Businesses may also reevaluate their property portfolios to identify any potential liabilities that could benefit from the amnesty. Taxpayers may check with their respective LGUs for ordinances implementing the amnesty program and determine the steps needed to settle their obligations.

 

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