FORMULAS FOR WORDS AND PHRASES USED IN GOVERNMENT APPRAISAL AND ASSESSMENTS

a) Schedule of Market Value Usually this Schedule is being prepared by the Assessor. Before the devolution of the powers under the Local government Code of 1991, it is the Department of Finance who approves the Schedule of Market Value. Under the RA 7160, it is now the local Sanggunian who will approve the Schedule of market Value. With this Schedule, the Assessor is guided on what values are to be used in arriving at the Fair Market Value of the property he is going to asssess. Samples of the Schedule of market Values are: From the R.Magsaysay junction of Villafuerte street both side to Davao Bukidnon Highway the following are to be used: Commercial lots along the street Php 2,000,000 per sqm , all other interior lots 1,000 per sm Residential Php 1,500 per sqm Agricultural lot Php 50,000 per ha. Residential Assume the following, to be owned by Mr. Candido Yutan Kaayo: 1,200 sqm of commercial lot located at Villafuerte Street 1,000 residential lot 10 hectare agricultural lot Formula to arrive at Fair Market Value Definiton of Faair Market Value Refer to Section 199 Letter I A)Along the road, Commercial lot 1,200 x 2,000 =2,400,000 B)Residential 1,000 sqm x 1,500/sqm= Php 1,500,000 C) 10 ha x 50,000= 500,000 How to arrive at Assessed Value Definition-Please refer to Section 199 of RA 7160 Letter H Definition of Assessment Level-Please refer to RA 7160 Letter G Formula= Market Value x Assessment Level Assuming that the following are A)the assessment levels of: B) Tax rate is 2.5% Tax rate and assessments levels are provided for by the local Sanggunian of the place where the properties are located. Commercial 50% Residential 20% Agricultural 40% To arrive at assessed value: Commercial= 2,400,000 x 50% or 1,200,000 Residential 1,500,000 x 20% or 300,000 Agricultural 500,000 x 40% or 200,000 Formula for Annual Tax dues: Assessed Value x Tax Rate Commercial 1,200,000 x 2.5% or Php 30,000 per annum Residential 300,000 x 2.5% or Php 7,500 per annum Agricultural 200,000 x 2.5% or Php 5,000 per annum Total annual tax due Php 42,500.00

Section 220 of RA 7160

SEC. 220. Valuation of Real Property. - In cases where (a) real property is declared and listed for taxation purposes for the first time; (b) there is an ongoing general revision of property classification and assessment; or (c) a request is made by the person in whose name the property is declared, the provincial, city or municipal assessor or his duly authorized deputy shall, in accordance with the provisions of this Chapter, make a classification, appraisal and assessment of the real property listed and described in the declaration irrespective of any previous assessment or taxpayer's valuation thereon: Provided, however, That the assessment of real property shall not be increased oftener than once every three (3) years except in case of new improvements substantially increasing the value of said property or of any change in its actual use.

Section 219 of RA 7160

SEC. 219. General Revision of assessments and Property Classification. - The provincial, city or municipal assessor shall undertake a general revision of real property assessments within two (2) years after the effectivity of this Code and every three (3) years thereafter.

Section 218 of RA 7160

SEC. 218. Assessment Levels. - The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following: (a) On Lands: CLASS ASSESSMENT LEVELS Residential 20% Agricultural 40% Commercial 50% Industrial 50% Mineral 50% Timberland 20% (b) On Buildings and Other Structures: (1)Residential Fair Market Value Over Not Over Assessment Levels P 175,000.00 0% P 175,000.00 300,000.00 10% 300,000.00 500,000.00 20% 500,000.00 750,000.00 25% 750,000.00 1,000,000.00 30% 1,000,000.00 2,000,000.00 35% 2,000,000.00 5,000,000.00 40% 5,000,000.00 10,000.000.00 50% 10,000,000.00 60% (2) Agricultural Fair Market Value Over Not Over Assessment Levels P 300,000.00 25% 300,000.00 500,000.00 30% 500,000.00 750,000.00 35% 750,000.00 1,000,000.00 40% 1,000,000.00 2,000,000.00 45% 2,000,000.00 50% (3) Commercial / Industrial Fair Market Value Over Not Over Assessment Levels P 300,000.00 30% P 300,000.00 500,000.00 35% 500,000.00 750,000.00 40% 750,000.00 1,000,000.00 50% 1,000,000.00 2,000,000.00 60% 2,000,000.00 5,000,000.00 70% 5,000,000.00 10,000,000.00 75% 10,000,000.00 80% (4)Timber land Fair Market Value Over Not Over Assessment Levels P 300,000.00 45% P 300,000.00 500,000.00 50% 500,000.00 750,000.00 55% 750,000.00 1,000,000.00 60% 1,000,000.00 2,000,000.00 65% 2,000,000.0 70% (c) On Machineries Class Assessment Levels Agricultural 40% Residential 50% Commercial 80% Industrial 80% (d) On Special Classes: The assessment levels for all lands, buildings, machineries and other improvements; Actual Use Assessment Level Cultural 15% Scientific 15% Hospital 15% local water districts 10% Government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power 10%

Section 217 of RA 7160

SEC. 217. Actual Use of Real Property as Basis for Assessment. - Real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it.

Section 216 of RA 7160

SEC. 216. Special Classes of Real Property. - All lands, buildings, and other improvements thereon actually, directly and exclusively used for hospitals, cultural, or scientific purposes, and those owned and used by local water districts, and government-owned or -controlled corporations rendering essential public services in the supply and distribution of water and/or generation and transmission of electric power shall be classified as special.

Section 215 of RA 7160

SEC. 215. Classes of Real Property for Assessment Purposes. - For purposes of assessment, real property shall be classified as residential, agricultural, commercial, industrial, mineral, timberland or special. The city or municipality within the Metropolitan Manila Area, through their respective sanggunian, shall have the power to classify lands as residential, agricultural, commercial, industrial, mineral, timberland, or special in accordance with their zoning ordinances.