The Real Property Valuation and Assessment Reform Act (RPVARA) offers a real property tax amnesty for unpaid taxes, simplifying property ownership transfers. This amnesty complements the existing estate tax amnesty program, aiming to encourage the smooth transition of property ownership. However, heirs still face the local transfer tax, highlighting the need for LGUs to enact ordinances granting relief on surcharges and interest.
The Real Property Valuation and Assessment Reform Act ( RPVARA ), or Republic Act (RA) 12001, offers a significant advantage to delinquent real property owners: a tax amnesty on unpaid real property taxes. This amnesty, applicable to penalties, surcharges, and interest accrued before July 5, 2024, covers a wide range of taxes, including Special Education Fund contributions, idle land tax, and other special levy taxes.
Available for two years from the law's enactment, the amnesty period extends until July 5, 2026.This tax relief is further simplified by the fact that local government units (LGUs) are not required to pass a local ordinance to implement the amnesty. The law itself empowers LGUs to grant this amnesty, eliminating the need for additional bureaucratic procedures. While LGUs retain the option to issue an ordinance, it primarily serves to define the payment methods for delinquent taxes, not to grant or withhold the amnesty.This real property tax amnesty complements the government's Estate Tax Amnesty program, facilitated by RA 11213, as amended by RA 11569 and RA 11956. The estate tax amnesty allows heirs to transfer inherited property without facing penalties for late estate tax payments by settling a six percent tax on the total net taxable estate. This program, active until June 14, 2025, covers estates of decedents who died on or before May 31, 2022.However, there is another hurdle for heirs hoping to transfer property; the Local Government Code (LGC) of 1991 mandates payment of a tax on the transfer of real property ownership. This local transfer tax, imposed by provinces and cities, can reach up to 50 percent of one percent of the total consideration or fair market value of the property. Like other tax obligations, late payment incurs surcharges and interest. Notably, the tax amnesty programs for real property and estate taxes do not extend to this local transfer tax.While national government programs focus on tax relief, local governments retain the authority to grant exemptions or reliefs under the LGC. The Bureau of Local Government Finance encourages LGUs to offer relief on surcharges and interest for the local transfer tax, aligning with the national government's goal of providing tax relief. However, these reliefs can only be implemented through local ordinances passed by the local sanggunian
Real Property Tax Amnesty RPVARA Estate Tax Amnesty Inheritance Property Ownership Local Government Code LGC Surcharges Interest Transfer Tax
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