CREBA backs overhaul of real property valuation

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    The Chamber of Real Estate & Builders’ Associations Inc.(CREBA) said the current system of real property valuation in the Philippines must be overhauled to do away with multiple, overlapping and outdated valuations.

    In a statement, CREBA national chairman Charlie Gorayeb said the current practice complicates government assessment and taxation and raises discrepancies that result in right-of-way compensation problems and lengthy valuation, both of which hamper the speedy and efficient construction of infrastructure projects.

    CREBA has expressed its support to the proposed Property Valuation Reform Bill or Package 3 of the Comprehensive Tax Reform Program (CTRP) which seeks to introduce reforms in real property valuation and assessment, reorganizing in the process, the Bureau of Local Government Finance (BLGF) under the Department of Finance.

    CREBA said House Bill No. 4664 is a timely opportunity to overhaul the formulation of the schedule of market values (SMVs) which has, for many years, been prone to compromise and corruption and wanting of direct participation by the private sector and professionals with the requisite technical know-how and training.

    The group wants the BLGF to be given full powers and authority to appoint technically-competent local assessors to the local government units who shall then prepare the SMV for review and endorsement of the regional valuation board composed of four representatives from government and three from the private sector.

    According to CREBA, property owners have long complained of inaccurate classification of raw lands by the Bureau of Internal Revenue zonal valuation schedule into other uses such as residential, commercial or industrial way beyond their actual market price. This imposed unfair tax burdens and conflicts in land transactions.

    To correct this, the group hopes the proposed measure must accurately classify land parcels based on their current actual use, where “raw, undeveloped and under-developed lands less than 5,000 square meters” are considered of “general purpose” and valued lower.

    The group said the alarming rate by which some LGUs uncontrollably and suddenly increase real property tax (RPT) to fund some programs and projects is “confiscatory,” heavily detrimental to home owners and carries adverse trickle-down effects on property markets and the economy.

    To temper this, CREBA has urged lawmakers to include a provision in the bill that will cap RPT increases to a more reasonable level of either 30 percent from the previous assessment or via a formula based on inflationary factors.

    The group said before considering any tax hike, government must improve its tax collection efforts and minimize or avoid altogether tax amnesties or condonations.