The suspension of the Real Property Valuation and Assessment Reform Act (RPVARA) should not be viewed as a step backward. It is a recognition that a reform measure this transformative and comprehensive needs preparation as much as political support. We believe that the objective of RPVARA remains sound. For decades, the Philippine property market has operated under a fragmented valuation system with local governments using one set of values while the BIR uses another. It’s a pain point that we always hear on the ground, with different agencies relying on different standards. In our view, RPVARA aims to fix that and, at the same time, ensure that our appraisal system is aligned with global practices.
By adopting a uniform, market-based valuation framework, the law promises greater transparency, more accurate taxation, improved right-of-way acquisition, and better investment planning. These are reforms the country needs if it wants to remain competitive in attracting domestic and foreign capital. However, good policy can still create short-term disruption. That is what many property stakeholders have been highlighting. The issue is not valuation reform itself. Several sectors argue that the real issue is readiness. Once market values are fully reflected, the impact goes beyond real property taxes.
RPVARA and housing affordability
For developers already dealing with elevated construction costs, unsold inventory, and affordability concerns, these adjustments matter. For buyers, they matter even more. The Philippine housing sector continues to face a massive supply gap. Any reform that potentially raises development costs must be carefully calibrated to avoid making homeownership even more difficult for ordinary Filipinos. This is why the deferment makes sense.
Interestingly, the pause should not result into analysis-paralysis. Based on my discussion with representatives from public and private stakeholders, many schedules of market values are outdated. Some local governments delay revisions because of the political consequences of higher taxes. The result is distorted pricing, inconsistent assessments, and avoidable disputes. Investors notice these weaknesses.
Generally, for a lot of investors, opaque, unpredictable, and outdated values hardly attract new and additional businesses into the country. In our view, a standardized valuation framework reduces uncertainty and improves confidence. It allows developers to price projects more accurately, investors to underwrite risk more effectively, and lenders to make better-informed decisions.
Addressing barriers to implementation
Proper execution should be addressed here. Government agencies should use this additional time to strengthen valuation databases, improve technical capacity, finalize implementing guidelines, and undertake meaningful stakeholder consultations. It’s good that we see more brokers and valuers coordinating with local government units to thresh out issues. But just as important is a comprehensive public information campaign, and the national and local governments should ensure that adequate communication channels are in place.
In our view, the biggest risk facing RPVARA today is not resistance to reform. Property owners are far more willing to accept change when they understand why it is necessary and how it will be implemented. The Philippines ultimately needs a modern valuation system aligned with international standards. That objective remains unchanged. What’s important is that Filipino stakeholders understand the ultimate goal and how the benefits redound to property developers and end-users.
A balancing act
Meanwhile, there are some sectors saying that they respect President Marcos’ concern regarding the potential impact of RPVARA on property owners, as well as its impact on already struggling real estate market. This segment believes that these can be addressed through implementation measures rather than delaying RPVARA. Instead, the President should direct DILG, in coordination with the DOF-BLGF, to issue a memorandum to LGUs to adopt transitional measures that mitigate taxpayer impact while preserving the objectives of the reform, such as:
A two-year real property tax amnesty program covering penalties, surcharges, and interest on unpaid property taxes;
A 6% cap on increases in real estate taxes in the first year; and
A provision allowing the LGU to soften tax impacts by adjusting assessment levels and tax rates. They can even craft ordinances that may cap increases in real property taxes.
Such guidance could encourage LGUs to phase in increases gradually, adopt reasonable caps on annual tax increases, conduct taxpayer information campaigns, and ensure that property owners are adequately informed of available tax amnesty and relief mechanisms. This approach would protect taxpayers from sudden tax shocks while allowing the country to move forward with much-needed valuation reform.
RPVARA’s implementation requires a tough balancing act, and we hope that the result is a dynamic and competitive Philippine property market.
With the pause, the government has recognized that before taking a major leap forward, it needs to make sure that all stakeholders are ready to take the journey.
And in this case, a measured pause may prove far more valuable than a rushed implementation.
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