IDLE LAND GETS EXPENSIVE

The Makati City Assessor has begun public consultations for the Schedule of Market Values (SMV) that will take effect in 2028 — and the increases are eye-opening.

Example: Dasmariñas Village

Lot values jumped from Php 13.5k/sqm (1997) to Php 220K/sqm.

Surprisingly, this is still lower than BIR’s zonal value of Php 300K/sqm (issued in 2021) — which already tells us something important: RPVAR values are not automatically higher. They’re meant to be more accurate.

So what’s really happening?

What is RPVARA?

The Real Property Valuation and Assessment Reform Act (RPVARA) replaces BIR zonal values and forces all government agencies to use one standard valuation system.

Before this law, 23 agencies (LGUs, BIR, DAR, etc.) used different property values — often outdated and inconsistent — causing disputes, delays, and confusion.

RPVARA fixes this by:

+ Requiring LGUs to conduct mass appraisal

+ Using DOF-approved valuation methods

+ Applying one set of market values nationwide

Why this matters to property owners

1. Zonal values will be replaced

SMVs prepared under RPVARA will become the new basis for taxation and government transactions.

2. Real property taxes (RPT) will rise

RPT is based on:

Market Value × Assessment Level × Tax Rate

(+1% SEF)

Using Makati’s proposed values, annual RPT for a 1,000-sqm Dasma lot could jump from ~Php 44K (2025) to ~Php 660K — a more than 15× increase.

Example: Dasmariñas Village (1,000 sqm lot)

Market Value

220K/sqm × 1,000 sqm = Php 220 Mn

Assessed Value = 220 Mn x Assessment Rate (12%) = Php 26.4 Mn

x RPT (1.5%) = Php 396K

x SEF (1%) = Php 264K

Total Annual RPT = Php 660K

3. LGUs can soften the increase.

They can adjust:

+ Assessment levels (12% in our example)

+ Tax rate

DOF is also recommending that LGUs cap increases at 6% in the first year, then phase them in gradually.

Timeline

2024–2027: Mass appraisal

2028: New values finalized

2029: Higher RPT collections begin

RPVARA is a long-overdue reform — but it also marks the beginning of a new reality: idle land in prime cities will become expensive to hold.

I’ll discuss the broader implications in my 2025 year-end report.