Appeal of Assessor’s Fair Market Value in the Philippines

A comprehensive legal guide in the Philippine context

1) What “assessor’s fair market value” means—and why it matters

In real property taxation, the assessor’s fair market value (FMV) is the value assigned to land, buildings, machinery, and other real properties based primarily on the Schedule of Market Values (SMV) approved by the local sanggunian. That FMV is the starting point for computing:

Assessed value = FMV × assessment level (set by ordinance and dependent on property class and value bracket)
Real property tax (RPT) due = assessed value × RPT rate (plus the 1% Special Education Fund, and any other authorized levies)

Because FMV mechanically drives the tax bill, overvaluation or misclassification immediately inflates tax liabilities. Philippine law provides multiple, time-bound remedies to contest these.

2) Legal framework at a glance

Primary statute: Local Government Code of 1991 (LGC, R.A. 7160), particularly on assessment and collection of RPT.
Implementing and administrative rules: Local ordinances adopting the SMV and setting assessment levels; LGU assessment manuals and issuances.
Appellate bodies:
- Local Board of Assessment Appeals (LBAA) — provincial or city level
- Central Board of Assessment Appeals (CBAA) — national appellate board
- Court of Tax Appeals (CTA) — judicial review of CBAA decisions
- Supreme Court (SC) — last resort on pure questions of law

3) The two tracks to challenge an FMV-based assessment

There are two complementary (sometimes overlapping) remedies. Understanding the distinction is crucial:

A. Assessment appeal (Sec. 226 LGC and related provisions)

Target: The assessment itself (e.g., valuation/FMV, classification, assessment level, double assessment).
Where to file: LBAA of the province or city where the property is located.
Deadline: Within 60 days from receipt of the written notice of assessment (or other actionable assessment notice, including reassessments after revisions or new improvements).
Effect on collection: No suspension of collection by mere filing. Taxes continue to accrue; you may pay under protest to stop surcharges/interest.

B. Tax protest with the local treasurer (Sec. 252 LGC)

Target: The tax based on an allegedly erroneous or illegal assessment.
Pre-requisite: Pay first, under protest; attach proof of payment to your protest letter.
Deadline: Within 30 days from payment of the tax.
Decision timeline: Treasurer should decide within 60 days from filing.
Further appeal: If denied or not acted upon within 60 days, you may appeal to the LBAA within 60 days from receipt of denial or lapse of the decision period.

Practical guidance: If you receive an assessment increase you believe is wrong, file an assessment appeal to the LBAA within 60 days. If tax is falling due, also pay under protest and file a Sec. 252 protest to preserve refund rights. Many taxpayers prudently pursue both to cover all bases.

4) Grounds to challenge the assessor’s FMV

You generally win if you can overcome the presumption of correctness of official assessments by preponderant evidence. Common grounds:

Overvaluation / excess FMV
- Comparable sales indicate materially lower market values
- The SMV bracket applied is wrong for the location, class, or grade
- The improvement depreciation is understated; construction cost indices misapplied
Misclassification
- Property classified as commercial when it is residential or agricultural
- Special properties (e.g., churches, charitable institutions, property devoted exclusively to education) not properly recognized as exempt or specially assessed
Non-observance of the controlling SMV / unlawful SMV application
- Assessor deviated from the approved SMV or used a schedule not yet legally effective in your locality
- Wrong “zone” or “class” applied within the SMV
Double or erroneous assessment
- Same property assessed twice; or area/measurements overstated
Due process defects
- No proper written notice of assessment; lack of opportunity to be heard; increase implemented without statutory notice
Ultra vires or void ordinance (exceptional/strategic)
- Where the SMV ordinance itself is infirm (e.g., not properly enacted or patently confiscatory), taxpayers may consider collateral attack within an assessment appeal or a separate direct action (e.g., declaratory relief/annulment). This is complex and fact-intensive.

5) Evidence and valuation methods

Primary appraisal approaches

Sales Comparison Approach (SCA): Recent arm’s-length sales of comparable properties (adjusted for location, size, frontage, topography, and time).
Income Approach (IA): Capitalization of net operating income (typical for income-producing properties).
Cost Approach (CA): Replacement/reproduction cost new less depreciation (RRNLD), especially for improvements where sales data are thin.

Helpful exhibits

Copies of the SMV pages for your barangay/zone
Tax Declaration(s) (land and improvements) and Notice of Assessment
Zoning certificate / land use classification; title and lot plan
Broker price opinions, independent appraisal report, comparable sale deeds
Lease contracts (for income approach), operating statements
Photos, GIS maps, and engineer/quantity surveyor estimates (for cost and depreciation)

6) How to compute what’s at stake (worked example)

Assume the assessor set FMV = ₱30,000/m² for a 200 m² residential lot:

Assessor’s FMV: 200 × 30,000 = ₱6,000,000
Assessment level (say 20% for residential): Assessed value = ₱1,200,000
RPT rate (city): 2% → Basic RPT = ₱24,000
SEF: +1% of assessed value = ₱12,000
Total annual RPT = ₱36,000

If you prove true FMV is ₱22,000/m² (₱4.4M):

New assessed value = ₱880,000 → Basic RPT ₱17,600 + SEF ₱8,800 = ₱26,400
Annual savings: ₱9,600 (plus reduced penalties going forward)

7) Procedure before the LBAA (assessment appeal)

Who may appeal: The owner or person with legal interest (e.g., buyer under sale contract, lessee, mortgagee in possession).
Where: LBAA of the LGU where the property is located.
When: Within 60 days from receipt of the notice of assessment (or within 60 days after treasurer denies/sits on your Sec. 252 protest).
How: File a verified petition stating the facts, issues, and relief; attach documentary evidence; pay docket fees (as set by the board).
Parties: Petitioner vs Assessor (and often the Treasurer is notified for collection aspects).
Proceedings: Often summary, with submission of position papers, hearings for reception of evidence, and—when helpful—ocular inspection.
Burden of proof: On the taxpayer to prove overvaluation or error by preponderance of evidence.
Decision: The LBAA issues a written decision upholding, modifying, or canceling the assessment. It may order corrections to the tax declaration and adjustments/refunds consistent with payment-under-protest rules.

Collection pending appeal: The LGC allows collection to proceed notwithstanding the appeal. To avoid penalties, pay under protest and clearly annotate payments.

8) Appeal path and timelines

From LBAA to CBAA:
- Mode: Petition for review (administrative appeal)
- Deadline: 30 days from receipt of the LBAA decision (or from lapse of the period if a decision is lawfully deemed made)
- Relief: CBAA may affirm, reverse, or modify; it reviews facts and law and may conduct hearings or rely on the record.
From CBAA to CTA:
- Mode: Petition for Review (statutory appeal); the CTA has exclusive appellate jurisdiction over CBAA decisions.
- Deadline: Generally 30 days from receipt of the CBAA decision.
- Scope: Questions of fact and law; CTA may receive additional evidence in the interest of justice.
From CTA to Supreme Court:
- Mode: Petition for Review on pure questions of law (Rule 45 standard)
- Deadline: 15 days extendible for good cause.

Note: Computation of periods follows Philippine procedural rules on service, holidays, and extensions. Always calendar exact dates from actual receipt.

9) Relationship with general revisions and reassessments

LGUs should conduct a general revision of assessments (and update SMVs) periodically. Revisions or new improvements can trigger reassessments and new notices, reopening the 60-day appeal window for the affected changes.
Increases implemented without proper notice or before the ordinance/SMV takes effect are fertile grounds for challenge.

10) Refunds, credits, and pay-under-protest mechanics

Pay-first rule: For a Sec. 252 protest, payment under protest is mandatory; attach proof of payment to your protest letter.
Refund/Credit: If the protest/appeal succeeds, you may obtain a tax credit or refund for the excess paid, typically subject to local refund procedures and prescriptive periods.
Annotation: Ensure your official receipt or the treasurer’s register reflects “paid under protest”; keep certified copies.

11) Strategy tips (what successful taxpayers do)

Calendar all deadlines immediately upon receipt of any assessment notice or tax bill.
Secure the right papers early: SMV extracts for your barangay/zone, tax declarations, building permits/as-built plans, and prior assessment records.
Run your own valuation: Commission an independent, USPAP-style appraisal if the amounts are material; align with SCA/IA/CA and reconcile methods.
Check classification first: Misclassification (e.g., treating a home office as fully commercial) can dwarf pure FMV disputes.
Pay under protest where due: This stops surcharges and protects refund rights while the appeal runs.
Consider settlement: Present your evidence to the assessor; equitable corrections sometimes happen administratively even before a full hearing.
Prepare for oculars: Bring photos, maps, and witnesses who can authenticate comparables and condition.
Mind prescription for refunds: Don’t let refund claims go stale; track local ordinance timelines alongside national rules.
Bundle issues smartly: Raise all related errors (FMV, classification, area, assessment level) in one petition to avoid piecemeal litigation.

12) Model outline: Petition to the LBAA (assessment appeal)

Caption (LBAA of Province/City, case title)
Parties and standing (owner/lessee/mortgagee)
Material facts
- Description of property (TCT, area, location)
- Assessment history and the contested notice (dates!)
Issues
- Overvaluation (FMV too high)
- Misclassification / wrong SMV zone / wrong assessment level
- Due process defects
Arguments and evidence
- Appraisal report (SCA/IA/CA), comparables, maps, photos
- Excerpts of SMV; building/depreciation schedules
Prayer
- Reduction/cancellation of assessment; correction of tax declaration
- Direction to treasurer for refund/credit of excess RPT and SEF
Verification and certification against forum shopping
Annexes (organized, paginated, tabbed)

13) Common pitfalls

Missing the 60-day LBAA deadline after receiving the notice of assessment.
Not paying under protest when using Sec. 252 (leading to dismissal).
Thin comparables (e.g., distress sales, insider deals) without adjustments.
Ignoring improvements (or depreciation) in valuation.
Assuming the appeal suspends collection (it does not).
Failing to challenge misclassification (often the biggest lever).

14) Quick checklist (print-ready)

Date of receipt of assessment notice recorded
LBAA appeal drafted and filed within 60 days
If taxes due: paid under protest; Sec. 252 protest filed within 30 days from payment
Evidence pack prepared (SMV pages, title/TDs, appraisal, comps, photos, maps)
Calendar 30-day window to CBAA after LBAA decision; 30-day to CTA after CBAA
Track refund/credit execution with treasurer after favorable ruling

15) Final notes

The assessor’s FMV is not immovable; it’s rebuttable with coherent valuation evidence and timely procedure.
Deadlines control outcomes. Even strong appraisal cases fail if filed late or without proper pay-under-protest when required.
Complex cases—e.g., challenging the validity of the SMV ordinance itself, or mixed-use/stratified projects—benefit from specialized appraisal and tax counsel.

If you want, I can draft a tailored LBAA petition or a side-by-side computation using your actual tax declarations and the SMV applied to your property.