Why Did I Receive a “Building Tax” Bill?

Real Property vs. Building Assessments Explained (Philippines)

This is general legal information for the Philippines. For advice on your specific bill, consult your local assessor or counsel.

1) Bottom line up front

You received a “building tax” bill because, under Philippine law, buildings and other improvements are taxable real property—separate from the land underneath. Local governments assess and bill land and improvements (e.g., a house, warehouse, condo building, extension, pool, perimeter wall, machinery affixed to land) independently. That’s why you can get:

a Land (Real Property) Tax bill; and
a Building/Improvement Tax bill—sometimes called a “building RPT,” “improvement RPT,” or simply another RPT tied to a different tax declaration number.

Both arise from the same legal framework: the Real Property Tax (RPT) under the Local Government Code (LGC).

2) Legal bases & who charges what

Local Government Code (Republic Act No. 7160): Empowers provinces, cities, and municipalities within Metro Manila to levy ad valorem RPT on real property—land, buildings, machinery, and other improvements.
LGU tax ordinances: Set rates (within statutory ceilings), assessment levels, discounts, and penalties.
Assessor’s Office: Determines market values, assessment levels, and issues Tax Declarations (TDs) for land and improvements (often separate TDs with distinct numbers).
Treasurer’s Office: Bills and collects the tax.

3) Real property vs. “building” for tax purposes

A. What counts as real property

Land
Improvements: Anything built or affixed to land, intended to be permanent or long-term—e.g., a dwelling, factory, retail building, mezzanine, warehouse, pool, paved parking, major fences/walls, and typically machinery installed to a building or the land.

Key concept: The law treats land and improvements as separate taxable objects. Each may have its own TD and its own bill.

B. Why separate assessments happen

Different owners or possessors. Example: You lease a lot and built your own structure. The landlord gets the land bill; you get the building bill.
Timing differences. You might have had land long ago, but only recently finished construction—the improvement is newly assessed and billed separately.
Condominium scenarios. The land (and much of the structure) may be held in common via the condominium corporation; individual unit improvements or certain components can be assessed and paid through the association dues or directly, depending on the LGU’s practice and the project’s documentation.

4) How the tax is computed (plain-English guide)

Find the Fair Market Value (FMV):
- Based on the LGU’s Schedule of Market Values (SMV) for land and improvements.
Apply the Assessment Level:
- A percentage (set by local ordinance within national ceilings) that converts FMV into Assessed Value (AV).
- Assessment levels vary by property class (residential/agricultural/commercial/industrial, etc.) and can differ for land vs. improvements.
Multiply by the RPT rate (ad valorem):
- Provinces: not more than 1% of AV.
- Cities and municipalities in Metro Manila: not more than 2% of AV.
- Your ordinance sets the actual rate within those caps.
Add the Special Education Fund (SEF):
- An additional 1% of AV, collected with the basic RPT, earmarked for local education.
Consider any other lawful add-ons:
- Idle land levy, special assessments/benefit levies for public works, etc., if applicable in your LGU.

Result: Tax Due ≈ (AV × Basic RPT Rate) + (AV × 1% SEF) + other lawful levies There will typically be one computation for land and another for the building, each based on its own AV and TD.

5) Common reasons you’ll get a new or separate “building tax” bill

New construction or major renovation was declared (or discovered by the assessor), generating a new TD for improvements.
Transfer of possession (e.g., a lessee built a structure on leased land); the building is assessed under the builder’s name.
LGU reassessment cycle produced a fresh valuation or split TDs for clarity.
Condominium turn-over or fit-out triggered an improvement entry.
Previously undeclared improvements were picked up in a field appraisal.

6) Your responsibilities as an owner/possessor

File a sworn statement / declaration of newly constructed or improved buildings and other improvements within the timeline set by the LGC and your LGU (commonly within 60 days from completion/occupancy for new improvements).
Keep your TDs updated when there are changes in ownership, property description, or improvements.
Pay RPT on time (see deadlines below) or risk surcharges, interest, and enforcement.

7) Deadlines, discounts, and penalties

Quarterly installments are typically due on or before the last day of each quarter (commonly March 31, June 30, September 30, December 31).
Advance or prompt-payment discounts may be granted by ordinance.
Penalties for late payment generally accrue monthly (often up to 2% per month, subject to a cap), until fully paid. Exact figures depend on your LGU’s ordinance within the LGC framework.

Tip: Many LGUs offer early-payment discounts in January for the full year’s RPT. Check your bill or LGU notices.

8) Who is liable to pay the building RPT?

Owner or person with legal interest in the improvement.
Lessee-builder on leased land: commonly liable for the building tax under the improvement’s TD (even if the land tax goes to the lessor).
Condominium projects: The corporation/association typically handles the common area RPT; unit owners may be billed for their units (and proportionate shares), depending on the setup.

Contracts matter. Your lease, sale, or development agreement may allocate who pays. But vis-à-vis the LGU, the declared owner/possessor on the TD is ordinarily pursued.

9) Understanding your Tax Declaration (TD)

Each TD shows, among others:

Property identification (PIN/ARP No.), location, class (residential, commercial, etc.), area (for land), structural details (for buildings), and market/assessed values.
The name of the declared owner/possessor.
Often, separate TDs exist for land and improvements, resulting in separate bills.

Match your bill to the TD number. If your “building tax” bill cites a TD for improvements, that’s the building RPT.

10) Typical life cycle of a building assessment

Construction/fit-out completed (or discovered by assessor).
Owner/possessor declares the improvement; the assessor appraises and sets an assessment level.
TD for improvements is issued (or updated).
Treasurer bills the RPT accordingly (either pro-rated within the year or starting the next billing cycle, depending on LGU practice).
You receive a separate “building tax” bill in addition to any land bill.

11) How to verify or challenge your building assessment

A. Check first

Is the property description accurate? (floor area, materials, completion date, use/classification)
Is the assessment level appropriate for the property’s class?
Is the RPT rate correct for your LGU category (province vs. city/MM municipality)?
Are exemptions or incentives applicable? (see next section)

B. If you disagree

Assessment issues (valuation/classification): File an appeal with the Local Board of Assessment Appeals (LBAA) within the statutory period from receipt of the Notice of Assessment (commonly 60 days). Further appeals go to the Central Board of Assessment Appeals (CBAA), then to the courts.
Billing/collection issues (e.g., penalties, misposting): Coordinate with the Treasurer. For amounts you must pay to avoid delinquency, you can pay under protest and file a written protest within the period prescribed by law and ordinance. Keep official receipts and file-stamped copies.

Important: Some remedies require payment first (to avoid interest or distraint) and strict filing deadlines. Always keep copies of your bill, TD, and any notices.

12) Exemptions, partial exemptions, and incentives

Subject to constitutional and statutory rules, typical exemptions include:

Real property owned by the Republic or its political subdivisions (when used for public purposes).
Properties actually, directly, and exclusively used for religious, charitable, or educational purposes (subject to the specific constitutional and statutory tests).
Special laws or local incentives (e.g., certain economic zone incentives, limited machinery exemptions or holidays, pollution-control devices incentives in some LGUs).

Exemptions are strictly construed. Use matters: if a property’s use changes (e.g., rented out commercially), exemption may be lost (fully or proportionately).

13) Special situations

Ground leases: The landlord gets the land bill; the lessee-builder gets the building bill. Your lease should allocate who ultimately bears the cost between you, but the LGU follows the TD registrant.
Condominiums / strata: The condo corporation often receives the RPT for common areas; unit owners may see the charge as part of association dues or separate billing for their unit improvements. Developers’ turnover documents and LGU records govern practice.
Undeclared or previously ignored improvements: Back taxes, penalties, and retroactive assessments can arise if improvements were not declared on time. Field validations and satellite imaging have made detection more common.
Demolished or ruined improvements: File for cancellation or revision of the improvement TD promptly; otherwise, you may continue to be billed for a structure that no longer exists.

14) Practical checklist if you got a “building tax” bill

Locate the TD number on the bill and ask for a copy of the corresponding Tax Declaration for Improvements.
Verify details: property location, building description, floor area, use/classification, completion year.
Match rates: confirm your LGU’s RPT rate and assessment level applicable to your property class.
Check discounts/deadlines: plan payment by quarter or annual advance to capture any early-payment discount.
Fix errors immediately: request revision from the Assessor (for valuation/description issues) or recomputation from the Treasurer (for arithmetic/penalty issues).
Consider remedies: if disputing the assessment, calendar the LBAA deadline; if disputing collection, consider pay under protest and lodge a written protest within time.
Maintain records: receipts, assessment notices, and correspondence.

15) FAQs

Q: I already paid the land tax. Why am I billed again? A: Land and building are separately taxable. You likely paid the land RPT. The building has its own TD and tax.

Q: The building stands on land I don’t own. Do I still pay? A: Yes—if you own/possess the building or caused the improvement, you are typically liable for the building RPT under that improvement TD.

Q: Can I get one consolidated bill? A: Many LGUs still issue separate bills by TD. Some allow consolidation at the cashier; others don’t. Bring all TD numbers when paying.

Q: When are payments due? A: Commonly quarterly by March 31 / June 30 / Sept 30 / Dec 31 (or one annual payment early in the year with possible discount). Check your LGU’s cashier schedule.

Q: What if the building was demolished? A: Notify the Assessor for cancellation/revision of the improvement TD to stop future “building” charges.

Q: Can I be exempt? A: Exemptions are narrow and use-based (e.g., actual, direct, exclusive use for charitable/educational/religious). Otherwise, RPT generally applies.

16) Clean documentation = fewer headaches

Keep your latest TDs for both land and improvements.
File declarations promptly for new construction, renovations, or demolition.
Understand your LGU ordinance on rates, assessment levels, deadlines, discounts, and penalties.
For disputes, act within the statutory periods and keep a paper trail.

17) Quick template: what to ask the Assessor/Treasurer

“Please provide the Tax Declaration for Improvements matching TD No. ______ on my bill.”
“What assessment level and property class apply to this improvement?”
“What RPT rate and SEF were used?”
“From which date is this improvement effective for taxation?”
“If I pay in full now, what discounts apply? If late, what monthly penalty and cap apply?”
“If I seek revision, where do I file and what is the deadline for the LBAA?”
“If I must pay first, how do I pay under protest and what’s the protest deadline?”

Takeaway

A “building tax” bill is not a different tax regime—it’s the same Real Property Tax applied to the improvement component of your property. Because land and improvements are assessed separately, you may receive separate bills. Verify your improvement TD, confirm the computation, leverage discounts, and—if needed—use the proper administrative remedies on time.