Everything you need to know about Real Property Tax


If you have been in the Philippines and you’ve encountered tax and decreases in your life, then you would probably know that almost everything you do involves taxes.  Your salary, the things you buy, your food, you car (although some are tax free), your hobbies, etc.  Almost everything is plotted with taxes and why is that? – Because it is the government’s way of taking your share of being citizens of the country.  In this article, we will be relaying to you everything you need to know about Real Property Tax.

What is Real Property Tax?

You might be wondering what this is and to shorten the agony, it is a tax that is imposed to all types of real properties including lands, buildings, improvements, and machinery and to establish balance, a law was submitted and it was founded as Title II of the Local Government Code (LGC), R.A no. 7160.

Who should pay for the tax payment of RPT?

The person responsible for the payment of this tax is the owner or the administrator of the property (land, building, etc.).  And for its price, it depends on where the Real Property is located.  The RPT rate for cities and municipalities in the Metro is two (2%) percent while for provinces it is only one (1%)

Real Property Tax
Image credit to hbcgroupkw.com

Assessed value of the property is the fair market value of the property multiplied by the assessment level.  The assessment level however is the percentage applied to the fair market to distinguish the taxable value of the property.

To compute for the RPT, the assessed value of the property should be multiplied to the RPT rate.

Is there a deadline for the payment of the RPT?

To be clear, you need to pay the RPT to the city or municipal treasurer’s office in order to satisfy the requirements of the government.

There are options as to whether when to pay for RPT which can be on installment, quarterly, or full.  Taxpayers can choose the option to pay annually which will be every 31st of January.  If taxpayers choose to pay in installment, here are the dates that they need to remember:

  • 1st quarter – On or before March 31
  • 2nd quarter – On or before June 30
  • 3rd quarter – On or before September 30
  • 4th quarter – On or before December 31

There are certain advantages in paying in advance because discounts can be granted to those who settle their taxes even before their due date.  You can check the discounts you can get with your treasurer at your city or municipal office.

Read: How to Compute Tax Refund in the Philippines

Late payments of RPT

Failure to pay the RPT will result in penalties.  Late payments of the RPT can have the interest of 2% for each month on the unpaid amount to 72% or 36 months.  Of course, not abiding to the laws can put you to court so it is better to just follow and live with it.

Are there exemptions from the RPT?

Yes, there are properties that are exempted from the RPT and these are as follow:

  • Charitable institutions;
  • Charitable institutions;
  • Churches;
  • Cooperatives;
  • All lands that are exclusively used for religious, charitable or educational purposes;
  • Those that are used by local water districts;
  • Government-owned or controlled corporations
  • Machinery and equipment are used for pollution control and environmental protection

As you can see, the real property tax is a kind of tax that is implemented so that even business owners can comply to the rules and regulations mandated by the government.  It is their way of sharing their income to the country.

Read Also: How to compute capital gain tax on sale of real property in the Philippines

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