MAKATI SMV SHOCKWAVE

On Feb. 15, Bilyonaryo published an article reporting that the Dasmariñas Village Association (DVA) warned of a possible up to 16x increase in real property taxes (RPT) once the proposed SMV is implemented.

Highlights from the article:

+ DVA is CONCERNED about a staggering increase in RPT.

+ DVA said they were told the Makati LGU does NOT INTEND to use the SMV to sharply raise taxes.

+ DVA will propose revisions in assessment levels and tax rates, and a cap to limit future increases (3% to 4%).

+ DVA believes their goals align with the Makati city government (Nancy Binay admin).

JPRE Comments

1. First, I don’t think it’s accurate to say the LGU “does NOT INTEND to use” the SMV.

The SMV is not optional — it’s mandated by law and is the basis for computing assessed values, which in turn determines RPT.

What the city can do (and what DVA correctly pointed out) is to soften the impact through:

+ adjusting assessment levels,

+ adjusting tax rates, and

+ implementing safeguards (caps / phased implementation)

2. Important nuance: in some areas, the proposed SMV appears to be lower than existing BIR zonal values — which could benefit taxpayers during sale transactions (CGT/DST basis), even if it triggers RPT concerns.

3. Timing matters. Implementation is still far: SMV is projected around 2028, while the broader valuation reform timeline (RPVARA) is projected around 2029 (DOF estimates). So the impact is not THAT immediate.

4. This story also hints at how LGUs perceive RPT hikes: even they seem uneasy about sudden increases — especially with elections around the corner. RPT is one of the most politically sensitive taxes in local government.

5. Lastly: this is Makati — home to some of the country’s most influential property owners. We still haven’t seen the proposed SMVs for other LGUs. The question is: will other cities be as receptive to safeguards and caps?

Because in places like Calamba, many landowners (e.g., Nuvali owners) may not even be local voters — which could reduce the political pressure to soften the impact.