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Real Property: Tax Payables

Real Property: Tax Payables

Owning property means that you must also give the government their due. Thus, taxes may be collected by the government through the Bureau of Internal Revenue or the local government units under the Local Government Code. The taxes under the Local Government Code is commonly known as amilyar.

The power to levy real property tax, however, falls under the scope of the local government units. Thus,  Section 232 of the Local Government Code provides that, “a province or city or a municipality within the Metro Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted.” The rate of levy depends if the area is a province or a city or municipality. 

Following  Section 233 of the same Code, “a province or city or a municipality within the Metropolitan Manila Area shall fix a uniform rate of basic real property tax applicable to their respective localities as follows: (a) In the case of a province, at the rate not exceeding one percent (1%) of the assessed value of real property; and (b) In the case of a city or a municipality within the Metropolitan Manila Area, at the rate not exceeding two percent (2%) of the assessed value of real property.”

Note, however, that  Section 234  of the Code provides for exemptions from real property tax.    

Section 165 of the Local Government Code states that, “unless otherwise provided in this Code, the tax period of all local taxes, fees and charges shall be the calendar year. Such taxes, fees and charges may be paid in quarterly installments.” 

Section 166  of the same code provides that, “unless otherwise provided in this Code, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year. However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates.” 

The time of payment is mentioned in  Section 167 of the same Code, “unless otherwise provided in this Code, all local taxes, fees, and charges shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be. The sanggunian concerned may, for a justifiable reason or case, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months.” 

If there are unpaid taxes, fees, or charges, a corresponding surcharge and penalty shall be given under  Section 168 thereof. Thus, “the sanggunian may impose a surcharge not exceeding twenty-five percent (25%) of the amount of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent (2%) per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-six (36) months.” 

Amilyar, or Real Property Tax varies per classification. Real Property Tax can be assessed on residential real property, commercial real property, agricultural real property and even machineries and equipment. For example, elevators, swimming pools, generators that are bolted to the ground will also require the payment of Real Property Tax. 

It is important to  pay real property tax on time, or in advance as you can enjoy a significant  discount, if you pay ahead of the deadline. 

Need further information and assistance regarding real property tax payables in the Philippines?  Talk to our team at  FILEDOCSPHIL to know more about the requirements and process. Call us today at  (+632) 8478 5826 or send an email to  info@filedocsphil.com for more information.

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