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The largest association of real estate and housing stakeholders expressed support to the proposed Real Property Valuation Reform Bill, or Package 3 of the Comprehensive Tax Reform Program which seeks to introduce reforms in real property valuation and assessment and reorganize the Bureau of Local Government Finance under the Finance Department.
In a statement, the Chamber of Real Estate & Builders’ Associations Inc. (CREBA) said that cognizant of land and housing development being catalysts for economic and social progress, the current system of real property valuation in the Philippines should be over-hauled to do away with multiple, overlapping and outdated valuations.
CREBA national chairman Charlie A. V. Gorayeb said the current practice complicates government assessment and taxation and raises discrepancies that result in right-of-way compensation problems and lengthy valuation, both of which hamper the speedy and efficient construction of infrastructure projects.
He said House Bill No. 4664 or Property Valuation Bill is a timely opportunity to overhaul the formulation of the schedule of market values (SMVs) which has, for many years, been prone to compromise and corruption and wanting of direct participation by the private sector and professionals with the requisite technical know-how and training.
CREBA wants the BLGF to be given full powers and authority to appoint technically-competent local assessors to local government units who will prepare the SMV for review and endorsement of the Regional Valuation Board composed of 4 representatives from government and 3 from the private sector.
CREBA president Noel Toti M. Cariño said property owners have long complained of inaccurate classification of raw lands by the Bureau of Internal Revenue zonal valuation into other uses such as residential, commercial or industrial way beyond their actual market price.
To correct this, the group hopes that the proposed measure must accurately classify land parcels based on their current actual use, where “raw, undeveloped and under-developed lands less than 5,000 square meters” are considered of “general purpose” and valued lower.
The two CREBA leaders said that it is understandably among the main objectives of the reform efforts to increase local real property tax collection and enhance LGU self-sufficiency, especially in the face of the C-OVID-19 pandemic.
The group noted the alarming rate by which some LGUs uncontrollably and suddenly increase RPT to fund some programs and projects. It said the practice was “confiscatory”, heavily detrimental to home owners and carries adverse trickle-down effects on property markets and the economy.
CREBA also asked lawmakers to include a provision in the bill that will cap RPT increases to a more reasonable level of either 30 percent from the previous assessment or via a formula based on inflationary factors.
The group said that before considering any tax hike, government should intensify tax collection efforts and minimize or avoid tax amnesties or condonations.