Amilyar in the Philippines: A Simple Guide to Real Property Taxes

Real Property Tax (RPT) or “Amilyar” in the Philippines is a tax that owners of real property need to pay every year. If you don’t pay, the local government unit (LGU) can include your property in their next tax delinquent properties auction. I’ll discuss what else you need to know about amilyar/real property taxes.

Importance of Amilyar or Real Property Tax (RPT)

As a homeowner, You would not want your property to end up in a tax delinquent property auction right?

Which is why you should pay for amilyar/ Real property tax or RPT.

Tax delinquent property auctions

Non-payment can actually lead to an investment opportunity where real estate investors buy tax-delinquent real properties by participating in auctions held by LGU’s.

Buying tax delinquent properties is one of the many ways one can buy properties at low prices.

We also publish schedules and lists of tax-delinquent real properties of different cities – they are classified under the category tax-delinquent properties.

In the past, we have discussed what happens during these LGU auctions. You may want to read them should you be interested in this type of investment:

In this post, I will discuss the legal bases for RPT and how to compute it.

What is Amilyar / Real Property Tax (RPT)?

Real Property Tax is the tax on real property imposed by the Local Government Unit (LGU). The legal basis is Title II of the Local Government Code (LGC), Republic Act (R.A.) no. 7160.

The implementing rules and regulations of R. A. 7160 can be found here.

The RPT for any year shall accrue on the first day of January and from that date it shall constitute a lien on the property which shall be superior* to any other lien, mortgage, or encumbrance of any kind whatever, and shall be extinguished only upon payment of the delinquent tax.

*I believe this is the reason why banks/Pag-IBIG require housing loan borrowers to submit receipts as proof of payment for amilyar/RPT every year.

If you have prior years’ delinquencies, interests, and penalties, your RPT payment shall first be applied to them. Once they are settled, your tax payment may be credited for the current period.

Who should pay Amilyar / Real Property Taxes?

The owner or administrator of the property should pay for amilyar / real propert tax.

We often get this question:

“Hi Jay/Cherry, should I pay amilyar/RPT even if my property is not yet fully paid?”

Yes, even if a property is not yet fully paid (you either bought through installment or through a real estate mortgage loan and you still have an unpaid balance), you already have to pay.

Sometimes, landlords will require their tenants to pay for the amilyar/RPT. If you are renting a property, better check your lease contract to be sure.

Where to pay

To pay for amilyar/ RPT, simply go to the City or municipal treasurer’s office where your property is located.

When to pay

If you choose to pay for one whole year, the payment is due on or before January 31. If the basic RPT and the additional tax accruing to the Special Education Fund (SEF) are paid in advance, the sanggunian concerned may grant a discount not exceeding twenty percent (20%) of the annual tax due. Jay wrote about the discount on RPT recently in his post How To Get A 20% Discount on Real Property Taxes.

If you choose to pay in installments, the four quarterly installments shall be due on or before the last day of each quarter, namely: March 31, June 30, September 30, and December 31.

In case of failure to pay the basic RPT and other taxes when due, the interest at the rate of two percent (2%) per month shall be imposed on the unpaid amount, until fully paid. The maximum number of months is thirty-six (36) months, so effectively, the maximum interest rate is seventy-two percent (72%).

How do you compute real property tax (RPT)?

RPT = RPT Rate x Assessed Value

If you simply want to know how much is your amilyar, just get a statement of account or SOA at the City or municipal treasurer’s office. You need to present a copy of your tax declarations (make sure to bring the tax dec for land/improvements as applicable to your property).

What are the RPT rates?

Maximum RPT rates

Coverage

RPT rate

Cities and Municipalities within Metro Manila

2%

Provinces

1%

How to compute for Special Education Fund (SEF) – 1%

In addition to the basic RPT, the LGU’s may levy and collect an annual tax of one percent (1%) which shall accrued exclusively to the Special Education Fund (SEF).

Ad Valorem Tax on Idle Lands – 5%

In addition to the basic RPT, the LGU’s may collect a maximum idle land tax is 5% assessed value of the property.

How to compute Assessed Value in the Philippines?

Assessed Value = Fair Market Value x Assessment Level

Assessed value is basically the property’s fair market value multiplied by its assessment level.

What is Fair Market Value?

Sec. 199 (l) of the LGC defines “Fair Market Value” as the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy. In practice, however, the Fair Market Value is based on the assessment of the municipal or city assessor as written in the Real Property Tax Declaration (Land and Improvement).

What is assessment level?

The Assessment Level shall be fixed through ordinances of the Sangguniang Panlalawigan, Sangguniang Panglungsod, or the Sangguniang Pambayan of the municipality within the Metro Manila area.

To get this data, look for the tax Ordinance of the city or municipality where your property is located.

Maximum Assessment Level Rates

The following are maximum rates for the assessment levels of different types of real property in the Philippines

I.   Land

Class

Assessment Level

Residential

20%

Timberland

20%

Agricultural

40%

Commercial

50%

Industrial

50%

Mineral

50%

II.   Building and Other Structures

  1. Residential

FMV Over

But Not Over

Assessment Level

0.00

175,000.00

0%

175,000.00

300,000.00

10%

300,000.00

500,000.00

20%

500,000.00

750,000.00

25%

750,000.00

1,000,000.00

30%

1,000,000.00

2,000,000.00

35%

2,000,000.00

5,000,000.00

40%

5,000,000.00

10,000,000.00

50%

10,000,000.00

 

60%

2.  Agricultural

FMV Over

But Not Over

Assessment Level

 

300,000.00

25%

300,000.00

500,000.00

30%

500,000.00

750,000.00

35%

750,000.00

1,000,000.00

40%

1,000,000.00

2,000,000.00

45%

2,000,000.00

 

50%

3.   Commercial/Industrial

FMV Over

But Not Over

Assessment Level

 

300,000.00

30%

300,000.00

500,000.00

35%

500,000.00

750,000.00

40%

750,000.00

1,000,000.00

50%

1,000,000.00

2,000,000.00

60%

2,000,000.00

5,000,000.00

70%

5,000,000.00

10,000,000.00

75%

10,000,000.00

 

80%

4.  Timberland

FMV Over

But Not Over

Assessment Level

 

300,000.00

45%

300,000.00

500,000.00

50%

500,000.00

750,000.00

55%

750,000.00

1,000,000.00

60%

1,000,000.00

2,000,000.00

65%

2,000,000.00

 

70%

II.   Machineries

Class

Assessment Level

Agricultural

40%

Residential

50%

Commercial

80%

Industrial

80%

Sample Amilyar Computation

Data:

Actual use of property: Residential

Location: City within Metro Manila

FMV per assessor’s officer (based on Tax Declaration):

Land – P350,000

Improvement – P350,000

Assessment Level for Land: 20%

Assessment Level for Improvement: 20%

Note: The assessment levels are fixed through ordinances of the Sangguniang Panlalawigan, Sangguniang Panglungsod, or the Sangguniang Pambayan of the municipality within the Metro Manila area. We will be using the maximum rates for sample computation purposes.

Computation

Assessed Value of Land = P350,000 x 20% = P70,000

Assessed Value of Improvement = P350,000 x 20% = P70,000

Basic Real Property Tax for Land and Improvement

= (P70,000 + P70,000) x 2% = P2,800

Special Education Fund (SEF) for Land and Improvement = (P70,000 + P70,000) x 1% = P1,400

Special Classes of Real Property

All lands, buildings, and other improvements thereon actually, directly and exclusively used for hospitals, cultural, or scientific purposes, and those owned and used by local water districts, and government-owned or controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power

What are the assessment levels for special classes of real property?

Actual Use

Assessment Level

Cultural

15%

Scientific

15%

Hospital

15%

Local water districts

10%

Government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power

10%

What are Idle Lands?

1. Agricultural lands more than one (1) hectare in area, suitable for cultivation, dairying, inland fishery, and other agricultural uses, ½ of which remain uncultivated or unimproved.

  • Exceptions

i.      Lands planted to permanent or perennial crops with at least 50 trees to a hectare; and

ii.    Lands used for grazing purposes (Note: put goats or cows on your property).

2.   Lands Other than Agricultural, located in a city or municipality, more than 1,000 sqm. in area, ½ of which remain unutilized or unimproved

3.   Residential lots in subdivisions, regardless of land area

Frequently Asked Questions about Amilyar/RPT

Q: What is the deadline for property tax payment in the Philippines?

A: The deadline for the payment of real property tax is typically by the end of the first quarter of each year. It may vary slightly depending on the guidelines set by the LGU. Late charges and penalties may be applied if you miss the deadline.

Q: How do I pay my real property tax?

A: The payment process is simple. You can pay real property tax at a physical payment center such as your city hall or proceed to your LGU’s online payment portals, if available. You will need to present your latest real property tax receipt and if you are a new owner, you will also need a copy of your property title.

Q: Do I need to declare my real property?

A: Yes, as a property owner, it is your duty to make a declaration of real property for taxation purposes. It is the basis for the assessment of the property for taxation purposes under the Real Property Tax Code.

Q: Are there any discounts or exemptions for property tax?

A: Yes, there are specific tax exemptions provided by the local government code. These may include, but not limited to, farms, fish ponds, and charitable institutions. Also, you can avail of discounts if you pay early.

Q: What happens if I have already paid my real property tax but lost my official receipt?

A: If you have already paid your property tax but lost the official receipt, you can request a duplicate from the city government office. The city hall can verify the payment based on their records and issue a replacement receipt.

Note: As mentioned above, banks/Pag-IBIG require housing loan borrowers to submit receipts as proof of payment for amilyar/RPT every year.

Q: Can a real estate broker help with paying property taxes?

A: Yes, a real estate broker can assist you in paying your real property taxes. They are very familiar with the process and can guide you through the necessary steps, required documents to bring, and making the actual payment.

~~~

Do you have any questions, comments or reactions? Just let me know by leaving a comment below, thanks!

~~~

Cherry Vi M. Saldua-Castillo

Real Estate Broker, Lawyer, and CPA
PRC Real Estate Broker License No. 3187
PRC CPA License No. 0102054
Roll of Attorneys No. 55239

Text by Jay Castillo and Cherry Castillo. Copyright © 2008 – 2024 All rights reserved.

Full disclosure: Nothing to disclose.

Image courtesy: of  renjith krishnan / FreeDigitalPhotos

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