How to Get A Big Discount on Your Real Property Taxes

Now that you’ve bought your new home, your next task is to have your property assessed and declared for taxation purposes. This is required if buying any real estate property (house, condominium, lot, etc.) under the Local Government Code of 1991 or the Philippine Republic Act 7160. According to the law, property owners are required to pay Real Property Tax (RPT) every year. This is the tax imposed on all real property including building, land, and improvements in the Philippines.

This is an expense that many first time home buyers are not familiar with, but should be part of due diligence. As a property owner, it is your obligation to pay the appropriate RPT on time. Check out the things you need to know about paying your RPT, when to pay so you can avail the discounts, and more:

1. How much do you need to pay?

The applicable rate is based on a certain percentage of the current and fair market value of your property and depends on its location.

For cities and municipalities found in Metro Manila, the maximum RPT rate is at 2%. Meanwhile, for areas located outside Metro Manila, the maximum RPT should not exceed 1% of your property’s assessed value.

2. Where to pay?

Payment of Real Estate Tax is made through the Treasurer’s Office in the City or Municipal Hall where your property is situated.

With the modernization of payment systems in some local government units, there are cities which offer quicker way to pay your RPT.

In Parañaque, home owners can pay their RPT using Landbank’s online system. This efficient and hassle-free payment system saves you time and effort. No need to wait for the long line because you can do it in the comfort of your home or even when you are on the go.

Landbank’s online payment is also available in Muntinlupa City under the Muntinlupa Online Real-Property Payment System (MORPS). In order for a homeowner to do it, you need get an ATM account from the bank and enroll it in the Debit Card (ATM) Authorization program.

Meanwhile, Quezon City has introduced RPT payments via Globe’s GCash program. Or you can use it to simply assess your tax, and not pay yet. You will need to provide your Tax Declaration Number for the transaction.

3. When is it due?

Homeowners have the option to pay their annual Real Property Tax in full or in four equal installments, which is on or before the last day of every quarter of the year.

If you are going to pay per quarter, you need to keep these dates in mind or mark them on your calendar:

• 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

4. What can you gain by paying in advance?

Did you know that you can enjoy tax discounts? All you need to do is to pay in advance and you can get a discount of up to 50% (depending in the city where you live) on your property tax. Many cities in Metro Manila offer discount for early bird taxpayers.

Here is the list of discounts offered by some cities in Metro Manila if you pay before the due date:

• For Makati City homeowners, if you pay the full RPT before the 20th of January of the current year, you can get 10% off, which is the maximum discount offered by the city.
• In Taguig, homeowners are entitled to a 20% discount on their RPT if they pay the full amount for the following year before the end of the current year.
• In Quezon City, you can avail 20% discount if you pay the full RPT before the 31st of March.
  Update – Mayor Herbert Bautista recently announced that delinquent taxpayers who have not paid their taxes for over five years are allowed to settle their dues by just paying five years’ worth of taxes, corresponding surcharges, penalties and interests only – Ed..
• In Caloocan, if you pay full on or before January 31 of the current year, then you are awarded 15% discount. If you pay before February 28 or before March 31, it will be 10% and 5% discounts, respectively.
• For those who own a home in Marikina, you may avail the 10% discount if you pay in advance. Meanwhile, you may still take advantage of the 50% discount offered if you pay in full from January 1-March 31. This tax reduction was implemented to assist homeowners yet to recover from Typhoon Ondoy. It was granted last 2010 and will end in 2015.

Don’t forget to double check with your city or municipal treasurer how and when you can avail the RPT discounts to make sure you can get one.

5. What happens when you are unable to pay your taxes?

A homeowner who fails to pay his or her RPT on schedule will incur penalties. The late payments are subject to a two (2%) percent surcharge per month, to a maximum of 72% or not exceeding 36 months.

There are instances where those who fail to pay their RPT face having their properties tagged as tax-delinquent. In worst cases, these may be offered by the local government for public auction.

The Bottom Line

In order for you to not pay higher Real Property Tax and avoid hassle, make sure to pay them promptly. Or better yet, if you have extra funds and can afford to pay in advance, do so. It will save you more money as well as give you peace of mind.

Do you have any other concerns about paying your Real Property Tax? Share with us your thoughts by leaving a comment below.