In the Philippines, owning land, buildings, or machinery comes with a fundamental civic obligation: the payment of Real Property Tax (RPT), colloquially known as amilyar. Governed primarily by Republic Act No. 7160, also known as the Local Government Code of 1991 (LGC), RPT is a primary source of revenue for Local Government Units (LGUs), funding essential community services and infrastructure.
I. What is Real Property Tax?
Real Property Tax is an ad valorem tax, meaning it is levied based on the assessed value of the property. It applies to all types of real property, including:
- Land (Residential, Commercial, Industrial, Agricultural)
- Buildings and other improvements
- Machinery (pertaining to those attached to the land or used for an industry)
II. Basic Rules on Taxation
The LGC establishes the framework for how much you owe and why.
The Assessment Levels: The tax is not based on the market value alone, but on the Assessed Value. This is calculated by multiplying the Fair Market Value (FMV) by the Assessment Level (a percentage fixed by local ordinance, subject to ceilings set by the LGC).
Tax Rates: * In Provinces: Not exceeding 1% of the assessed value.
In Cities (and Municipalities within Metro Manila): Not exceeding 2% of the assessed value.
Special Education Fund (SEF): In addition to the basic RPT, LGUs are mandated to collect an additional 1% on the assessed value of real property. This fund is exclusively used for the maintenance and operation of public schools.
III. When to Pay: Deadlines and Discounts
Property owners have the option to pay in full or in installments.
- Annual Payment: Usually due on or before January 1st, though the tax accrues on the first day of the year.
- Installment Basis: Owners may pay in four equal installments:
- 1st Quarter: On or before March 31
- 2nd Quarter: On or before June 30
- 3rd Quarter: On or before September 30
- 4th Quarter: On or before December 31
Pro-Tip: Most LGUs offer a Prompt Payment Discount (usually 10% to 20%) if the tax is paid in full before the beginning of the year or before the quarterly deadline.
IV. Penalties for Non-Payment
Failure to pay on time results in a penalty of 2% interest per month on the unpaid amount, up to a maximum of 36 months (72%). Continued delinquency may lead to the LGU's issuance of a Warrant of Levy, allowing them to auction the property to satisfy the tax debt.
V. Where and How to Pay
The Bureau of Local Government Finance (BLGF) and various LGUs have modernized the payment process.
1. The City or Municipal Treasurer’s Office
The traditional method involves visiting the Assessor’s Office first (to get a Tax Declaration or Statement of Account) and then the Treasurer’s Office of the LGU where the property is located.
2. Online Payment Portals
Many highly urbanized cities (e.g., Quezon City, Makati, Manila, Cebu) now have dedicated web portals (like "QCXpress" or "Makati Online") where you can pay via credit card, GCash, or Maya.
3. Off-site Payment Centers
Some LGUs have partnered with malls (SM, Robinsons) or authorized banks (LandBank, DBP) to accept RPT payments, especially during the peak season in January.
VI. Exemptions from Real Property Tax
Under Section 234 of the LGC, certain properties are exempt from RPT:
- Real property owned by the Republic of the Philippines (unless beneficial use is granted to a taxable person).
- Charitable institutions, churches, and convents actually, directly, and exclusively used for religious, charitable, or educational purposes.
- All real property of duly registered cooperatives.
- Machinery and equipment used for pollution control and environmental protection.
Summary Table: RPT at a Glance
| Component | Province | City / Metro Manila |
|---|---|---|
| Max Basic Tax Rate | 1% of Assessed Value | 2% of Assessed Value |
| Additional SEF Tax | 1% of Assessed Value | 1% of Assessed Value |
| Total Max Rate | 2% | 3% |
Would you like me to draft a sample Notice of Appeal to the Local Board of Assessment Appeals in case you wish to contest your property's valuation?