Real property tax (RPT), commonly called amilyar, is an annual tax imposed by local government units on real property such as land, buildings, machinery, and other improvements. It is a major source of local revenue and is governed by the Local Government Code. The computation proceeds in steps. First, the assessor determines the fair market value of the property based on the schedule of market values prepared by the LGU. Second, the assessed value is derived by multiplying the fair market value by the assessment level, which varies by the actual use of the property (residential, agricultural, commercial, industrial, mineral, timberland) and by class, with residential properties generally carrying lower assessment levels. Third, the tax is computed by applying the RPT rate to the assessed value; the basic rate ceiling is one percent (1%) for provinces and two percent (2%) for cities and municipalities within Metro Manila. In addition to the basic tax, an additional one percent (1%) is levied as the Special Education Fund (SEF), and LGUs may impose an additional ad valorem tax on idle lands and a special levy for public works benefiting the property. On payment, RPT accrues on the first day of January and may be paid in full or in four equal quarterly installments; LGUs may grant a discount for advance or prompt payment, and unpaid taxes incur interest at the rate the Code fixes, capped at a maximum. Exemptions from RPT include: real property owned by the Republic or its political subdivisions, except where beneficial use is granted to a taxable person; charitable institutions, churches, parsonages or convents, mosques, non-profit or religious cemeteries, and all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable, or educational purposes; machinery and equipment for pollution control and environmental protection; and property of registered cooperatives. Delinquency has serious consequences: the LGU may enforce a lien on the property, and after notice and publication, sell the property at public auction, subject to the owner's right of redemption within one year from the sale. So RPT is an annual local tax computed from assessed value with an added SEF, payable quarterly with discounts and penalties, and delinquency can lead to a tax sale subject to a one-year redemption.
An Annual Local Tax
Real property tax (amilyar) is levied annually by LGUs on land, buildings, machinery, and improvements, under the Local Government Code.
How It Is Computed
- Fair market value from the LGU's schedule of values;
- × the assessment level (by actual use and class) = the assessed value; and
- × the RPT rate — ceiling of 1% (provinces) or 2% (cities/municipalities in Metro Manila), plus 1% SEF, and possible idle land tax and special levy.
Payment and Exemptions
RPT accrues on January 1, payable in full or in four quarterly installments, with discounts for prompt payment and interest on delinquency. Exempt: government property (unless beneficial use is taxable), property actually, directly, and exclusively used for religious, charitable, or educational purposes, pollution-control machinery, and cooperatives.
Delinquency and Tax Sale
The LGU may enforce a lien and, after notice and publication, sell the property at public auction — subject to the owner's right of redemption within ONE YEAR from the sale.
Practical Takeaways
- RPT = assessed value × rate, plus 1% SEF;
- Pay quarterly; prompt payment earns a discount;
- Delinquency can lead to a tax sale, redeemable within one year.
Frequently Asked Questions
How is real property tax computed? The fair market value is multiplied by the assessment level based on the property's actual use to get the assessed value, which is then multiplied by the RPT rate, with a ceiling of 1% for provinces and 2% for cities and municipalities in Metro Manila, plus the 1% Special Education Fund.
When is real property tax due? It accrues on the first day of January and may be paid in full or in four equal quarterly installments. LGUs may grant discounts for advance or prompt payment, and delinquency incurs interest.
What properties are exempt from RPT? Government property except where beneficial use is granted to a taxable person, property actually, directly, and exclusively used for religious, charitable, or educational purposes, pollution-control machinery, and property of registered cooperatives.
What happens if I don't pay real property tax? The LGU may enforce a lien on the property and, after notice and publication, sell it at public auction. The owner has a right of redemption within one year from the date of sale.
This commentary is for general informational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a licensed attorney.
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