THE private sector has proposed extending the transition period in the implementation of the Republic Act (RA) No. 12001 or the Real Property Valuation and Assessment Reform Act (RPVARA), which will cap real property tax to 6 percent during the first three years of its implementation.
During its meeting with President Ferdinand Marcos on Tuesday in Malacañang, the Private Sector Advisory Council Infrastructure Sector (PSAC-Infra) has proposed moving the start of the implementation of RA 12001 by four years to 2031 and the phased transition that would cap real property tax increases at 6 percent annually during the first three years of said law.
Under RA 12001, local government units are required to update the Schedule of Market Values (SMV) within two years from the effectivity of the said law in 2024.
During the first year of effectivity of the approved SMVs, any increase in real property taxes shall be limited to a maximum of 6 percent of the real property taxes assessed on such properties before RA 12001 was enacted.
In case the SMVs are not yet available or updated, the Bureau of Internal Revenue shall adopt the existing SMVs, zonal values or the actual price in consideration as stated in real property transaction documents, whichever is higher, for purposes of computing any internal revenue tax.
The Council also said the government should study providing incentives or credits toward balanced housing requirements to developers so they provide discounts to their ‘higher-priced, ready-for-occupancy condominium units,’ to help address the country’s estimated 3.7-million-unit housing backlog.
It further recommended adjusting the socialized housing price ceilings this year, ahead of the scheduled December 2027 review, due to rising construction costs, which is slowing down the launches and construction of such projects.
This as real estate’s contribution to GDP dropped to 5.8 percent in the first quarter of 2026, compared with the 6.65 percent prepandemic average in 2018 and 2019.
‘Through these recommendations, PSAC seeks to support a balanced approach that considers housing affordability and manageable property costs while sustaining investment, construction and jobs across the economy,’ PSAC said.
Aside from real estate-related matters, PSAC also tackled in its latest meeting with the President the proposed National Artificial Intelligence Implementation Task Force and the lifting of the moratorium for information technology (IT) centers and IT parks in Metro Manila.
Among the firms which participated in the meeting were Aboitiz, Alliance Global Incorporated, Ayala Corporation, Ayala Land Incorporated, Robinsons Land Corporation, and SM Prime Holdings, Inc.
Malacañang earlier said that Marcos wants the suspension of any increase in real property taxes so it will not become an additional financial burden for property owners amid rising cost of living.