Paying Real Property Tax in the Philippines: What You Need to Know

Owning a piece of property in the Philippines is not just a fulfillment of a dream; it's also a commitment that comes with both privileges and responsibilities. One of those responsibilities is paying real property tax, locally known as amilyar. This annual tax payment, imposed by local government units (LGUs), helps fund essential public services and infrastructure.

Whether you're a long-time landowner or have recently acquired a property, understanding this tax is crucial. In this guide, we'll break down everything you need to know about real property tax in the Philippines.

What is Real Property Tax?

Real property tax, colloquially known as amilyar, is a tax that property owners must pay to the LGU where their property is located. This tax, also referred to as real estate tax, is due on the first day of January each year.

The term amilyar has Spanish origins, specifically from the word "amillaramiento," which means an assessment of a tax. Tax collection was introduced to the Philippines during the Spanish colonial period, where local leaders collected taxes in exchange for protection and security. Today, amilyar is collected by LGUs to support public services.

Calculating Real Property Tax

The calculation of real property tax is relatively straightforward. It's based on a set rate applied to the assessed value of your property. The rates vary depending on your property's location:

• Province - 1% of the assessed value
• Metro Manila - 2% of the assessed value

To calculate your real property tax, you can use the following formula:

Real Property Tax = Rate x Assessed Value

For instance, if your property in Metro Manila has an assessed value of ₱1,000,000, your real property tax would be ₱1,000,000 x 2% = ₱20,000.

However, if your property of the same value is located in a province, your real property tax would be ₱1,000,000 x 1% = ₱10,000.

Important Dates: Amilyar Deadline

As a responsible property owner, you must be aware of the amilyar deadline. The tax should be paid on or before January 31 of each year. If, for any reason, you can't pay the full amount by this date, don't worry; you have the option to settle the amount due in four equal installments throughout the year:

• On or before March 31
• On or before June 30
• On or before September 30
• On or before December 31

The Difference Between Real Property Tax, Tax Declaration, and Transfer Certificate of Title

Before delving further into real property tax, it's important to understand the differences between real property tax, tax declaration, and the Transfer Certificate of Title (TCT). Each of these serves a unique purpose:

Real Property Tax

This is the annual tax paid by property owners to their LGUs.

Tax Declaration

A tax declaration is a property record that shows the assessed value of your property, which serves as the basis for calculating real property tax. Once the property registration is approved, you'll receive a tax declaration number.

Transfer Certificate of Title (TCT)

The TCT is legal proof of property ownership.

So, while a real property tax receipt or a tax declaration is essential for various purposes (like loans, transactions with government agencies, personal records, or property reassessment), they don't serve as absolute legal evidence of property ownership.

Paying Your Real Property Tax

Paying real property tax in the Philippines can be done both online and in person. Here's how:

Paying at the City Hall

1. Prepare the Required Documents
If you've paid real property tax before, make sure to bring your previous official receipt of tax payment. For first-time payments, you may need to provide a copy of your property title and tax declaration number.

2. Visit the LGU's Assessor Office
Head to the LGU's Assessor Office, Taxpayer’s Lounge, or any designated window for tax assessment.

3. Assessment
The LGU personnel will assess the taxes due for your property. Once the assessment is complete, you'll know the exact amount you need to pay.

4. Payment
Proceed to the billing section to settle the amount due. After making your payment, you'll receive a receipt as proof of payment.

Paying Online and Through Partners

Many cities in the Philippines offer online payment services, making it easier and more convenient for residents to pay their real property tax. You can usually find these services on your LGU's official website.

Getting a Real Property Tax Declaration

If you need to obtain a tax declaration for real property, you'll have to go through a specific process, which can vary depending on your LGU's requirements. Here are the general steps:

1. Submit Required Documents
Prepare the necessary documents and submit them to your LGU. These documents will be assessed, and ownership of the property will be verified.

2. Assessment and Verification
Once your documents are submitted, your LGU will assess them for accuracy and verify property ownership. They'll provide a date for you to return and continue the process.

3. Processing
The application for a tax declaration will be processed upon successful assessment and verification. This process includes system validation and property inspection.

4. Fees and Payments
You may be asked to pay various fees like filing fees, annotation fees, and registration fees.

5. Finalization and Printing
Once the Appraiser Inspection Report is approved, all the information will be encoded and stored in the LGU's system. The tax declaration will then be printed and issued to you.

Understanding and managing your real property tax obligations is a fundamental part of responsible property ownership. With these insights, you can ensure that you meet your tax requirements and contribute to your community through the funding of essential public services.