C O M P O N E N T 4 . 1 B
STUDY ON THE REVENUE
IMPACT OF SMV REVISION
W H Y C O N D U C T A R E V E N U E I M P A C T S T U D Y
To provide information on the effects of the proposed SMV on LGU revenue and tax burden of property owners
To provide a starting point for formulating tax policy options responsive to the revenue requirements of the LGU and to taxpayers’ ability-to-pay
To promote transparency in the property tax system
M I S C O N C E P T I O N B E T W E E N S M V R E V I S I O N A N D R P T
Misconception: Property tax is
strictly value driven
Fear of an increase in tax burden proportionate to the increase in the SMV
REAL PROPERTY TAXES
MARKET-BASED SMV
INTRODUCE NECESSARY TAX POLICY OPTIONS
LGU Budgetary
Requirement
Taxpayers’
Ability-to-pay
MARKET-BASED SMV AND RPT POLICY
Technical
Function of the
Assessor
Role of the
Legislators
P O S S I B L E R P T P O L I C Y O P T I O N S
Option 1: Reduce the tax rate, e.g. from 2% to 1.75%
Option 2: Reduce the assessment levels by 20%
Option 3: Phase implementation of the increase in the
tax, e.g.1st year: Old Tax + 50% of the increase in the tax
2nd year: Old Tax + 75% of the increase in the tax
3rd year: Old Tax +100% of the increase in the tax
Option 4: Fixed capping of the increase in the tax, e.g.
Old Tax + 30% of the increase in the tax every year for
3 years
TAX IMPACT CALCULATION
(UNDER NEW MV)
Property Classifica
tionLand Area SMV
New MV
Total Market Value
Assess mentLevel
Assessed Value
Tax RateCurrent
RPT
RPT Under New MV
Incremental RPT
Based on SMV
Based on New
MVBased
on SMV
Based on New
MVAmount % Inc.
R1100
sq.m 200 2,000 20,000 200,000 20% 4,000 40,000 2% 80 800 720 900%
C1100
sq.m 300 3,000 30,000 300,000 50% 15,000 150,000 2% 300 3,000 2,700 900%
I1500
sq.m 250 1,500 125,000 750,000 50% 62,500 375,000 2% 1,250 7,500 6,250 500%
RL -irrig -1st 1 ha. 40,300 200,000 40,300 200,000 40% 16,120 80,000 2% 322 1,600 1,278 396%
TAX IMPACT CALCULATION
(UNDER OPTION 1)
Property Classifica
tion
Land Area
SMVNew MV
Total Market Value Assess
ment Level
Assessed Value Tax Rate
Current RPT
RPT Under
Option 1
Incremental RPT
Based on SMV
Based on New
MV
Based on SMV
Based on New
MVCurrent
Option 1
Amount % Inc.
R1100
sq.m 200 2,000 20,000 200,000 20% 4,000 40,000 2% 1.75% 80 700 620 775%
C1100
sq.m 300 3,000 30,000 300,000 50% 15,000 150,000 2% 1.75% 300 2,625 2,325 775%
I1500
sq.m 250 1,500 125,000 750,000 50% 62,500 375,000 2% 1.75% 1,250 6,563 5,313 425%
RL -irrig -1st 1 ha. 40,300 200,000 40,300 200,000 40% 16,120 80,000 2% 1.75% 322 1,400 1,078 334%
TAX IMPACT CALCULATION
(UNDER OPTION 2)
Property Classifica
tion
Land Area
SMVNew MV
Total Market Value
Assessment Level
Assessed Value
Tax Rate
Current RPT
RPT Under Option
2
Incremental RPT
Based on SMV
Based on New
MVCurrent
Option 2
Based on SMV
Based on New
MVAmount % Inc.
R1 100 200 2,000 20,000 200,000 20% 16% 4,000 32,000 2% 80 640 560 700%
C1 100 300 3,000 30,000 300,000 50% 40% 15,000 120,000 2% 300 2,400 2,100 700%
I1 500 250 1,500 125,000 750,000 50% 40% 62,500 300,000 2% 1,250 6,000 4,750 380%
RL -irrig -1st 1 40,300 200,000 40,300 200,000 40% 32% 16,120 64,000 2% 322 1,280 958 297%
TAX IMPACT CALCULATION
(UNDER OPTION 3 -Year 1)
Property Classifica
tion
Land Area
SMVNew MV
Total Market Value Assess
ment Level
Assessed Value
Tax Rate
Current RPT
Potential RPT Incremental RPT
Based on SMV
Based on New
MV
Based on SMV
Based on New
MV
Under New MV
Under Option
3Amount % Inc.
R1100
sq.m 200 2,000 20,000 200,000 20% 4,000 40,000 2% 80 800 440 400 500%
C1100
sq.m 300 3,000 30,000 300,000 50% 15,000 150,000 2% 300 3,000 1,650 1,500 500%
I1500
sq.m 250 1,500 125,000 750,000 50% 62,500 375,000 2% 1,250 7,500 4,375 3,750 300%
RL -irrig -1st 1 ha. 40,300 200,000 40,300 200,000 40% 16,120 80,000 2% 322 1,600 961 800 248%
TAX IMPACT CALCULATION
(UNDER OPTION 4- Year 1)
Property Classifica
tion
Land Area
SMVNew MV
Total Market Value
Assessment Level
Assessed Value
Tax Rate
Current RPT
Potential RPT Incremental RPT
Based on SMV
Based on New
MV
Based on SMV
Based on New
MV
Under New MV
Under Option
4Amount % Inc.
R1100
sq.m 200 2,000 20,000 200,000 20% 4,000 40,000 2% 80 800 296 216 270%
C1100
sq.m 300 3,000 30,000 300,000 50% 15,000 150,000 2% 300 3,000 1,110 810 270%
I1500
sq.m 250 1,500 125,000 750,000 50% 62,500 375,000 2% 1,250 7,500 3,125 1,875 150%
RL -irrig -1st 1 ha. 40,300 200,000 40,300 200,000 40% 16,120 80,000 2% 322 1,600 706 383 119%
TAX IMPACT CALCULATION
(UNDER VARIOUS OPTIONS)
Option 1: Reduce the tax rate from 2% to 1.75%
Option 2: Reduce the assessment level by 20%.
Option 3: Phase implementation of the increase in the tax, e.g.
Year 1: Old Tax + 50% of the increase in the tax
Year 2: Old Tax + 75% of the increase in the tax
Year 3: Old Tax + 100% of the increase in the tax
Option 4: Fixed capping of the increase in the tax, e.g
Old Tax + 30% of the increase in the tax
Property Classificat
ionLand Area SMV New MV
AssessmentLevel
Tax RateCurrent
RPT
Potential RPT
Under New MV
Option 1 Option 2 Option 3 Option 4
R1 100 sq.m 200 2,000 20% 2% 80 800 700 640 440 296
C1 100 sq.m 300 3,000 50% 2% 300 3,000 2,625 2,400 1,650 1,110
I1 500 sq.m 250 1,500 50% 2% 1,250 7,500 6,563 6,000 4,375 3,125
RL -irrig -1st 1 ha. 40,300 200,000 40% 2% 322 1,600 1,400 1,280 961 706
REVENUE IMPACT CALCULATION
(P MILLION)
Property Type
Adj MV (Based
on SMV)
Ave. % Inc.
New MV A. Level Tax Rate Tax Collectible
Coll. Eff.
RPT Coll. @ Current Coll Eff.
Increase in RPT
RevenueBased On
SMVBased on
MVBased On
SMVBased on
MV
TOTAL 37,813 155% 96,297 210.59 570.32 53% 112.21 308.26 196.05
Residential 27,627 135% 63,957 20% 2% 110.51 255.83 45% 49.73 115.12 65.39
R-1 11,051 120% 24,312 20% 2% 44.204 97.25 45% 19.89 43.76 23.87
R-2 7,459 100% 14,918 20% 2% 29.836 59.67 45% 13.43 26.85 13.43
R-3 6,354 150% 15,885 20% 2% 25.416 63.54 45% 11.44 28.59 17.16
R-4 1,658 180% 4,642 20% 2% 6.632 18.57 45% 2.98 8.36 5.37
R-5 1,105 280% 4,199 20% 2% 4.42 16.80 45% 1.99 7.56 5.57
Commercial 1,579 200% 4,737 50% 2% 15.79 47.37 60% 9.47 28.42 18.95
Industrial 7,716 200% 23,148 50% 2% 77.16 231.48 65% 50.15 150.46 100.31
Agricultural 891 400% 4,455 40% 2% 7.128 35.64 40% 2.85 14.26 11.40
D A T A R E Q U I R E M E N T
Assessment Roll• With entries on location of property, land
area, property sub-classification, unit value, market value, assessed value, etc.
Old and New SMV• With information old and new property
classification; and old and new unit value for different locations/areas
COMPUTERIZED ASSESSMENT ROLL
SN # Tax Dec # BarangayProperty Owner
Property Type Taxability
Property Sub-Class Area
Unit Value Adj MV AL
Assessed Value
Tax Rate RPT Collectible
Basic RPT SEF Basic RPT SEF
12001-11-0473-1 Abella
Santos,Ramona Land T R1 250 400
100,000.00 20% 20,000.00 1% 1% 200.00 200.00
22001-11-0123-3 Abella Sese, Pura Land T R1 100 400 44,000.00 20% 8,800.00 1% 1% 88.00 88.00
32001-11-0473-1 Abella
Torres, Abad Land T R1 230 400 92,000.00 20% 18,400.00 1% 1% 184.00 184.00
42001-11-14473-1 Abella
Villanueva, oniaT Land T R1 140 400 56,000.00 20% 11,200.00 1% 1% 112.00 112.00
52001-11-0473-1 Abella
Santos, Perla Land T R1 120 400 48,000.00 20% 9,600.00 1% 1% 96.00 96.00
6
2001-1110473-
1 AbellaSenseng, wilfredo Land T R2 120 300 32,400.00 20% 6,480.00 1% 1% 64.80 64.80
72001-12-21473-1 Abella
Rosales, Juan Land T R2 120 300 36,000.00 20% 7,200.00 1% 1% 72.00 72.00
82001-12-0473-1 Abella
Rosales, john Land T R2 100 300 30,000.00 20% 6,000.00 1% 1% 60.00 60.00
92001-12-0473-1 Abella
Bautista, Feliciano Land T R2 300 300 90,000.00 20% 18,000.00 1% 1% 180.00 180.00
102001-122-
0473-1 AbellaReyes, Nick Land T R2 120 250 30,000.00 20% 6,000.00 1% 1% 60.00 60.00
112001-31-0473-1 Abella
Nicolas, Pedro Land T R2 150 250 37,500.00 20% 7,500.00 1% 1% 75.00 75.00
6
2001-1110473-
1 AbellaNicolas, Mario Land T R3 60 250 15,000.00 20% 3,000.00 1% 1% 30.00 30.00
72001-12-21473-1 Abella
Marasigan, Pearl Land T R3 60 250 13,500.00 20% 2,700.00 1% 1% 27.00 27.00
82001-12-0473-1 Abella
Solomon, Maria Land T R3 60 250 15,000.00 20% 3,000.00 1% 1% 30.00 30.00
92001-12-0473-1 Abella
Ramos, Nora Land T R3 60 250 15,000.00 20% 3,000.00 1% 1% 30.00 30.00
OLD AND NEW SCHEDULE OF MARKET VALUE
STREET/SUBDIVISION VICINITY 2001 BASE VALUE
SUB CLASS2006 BASE
VALUESUB CLASS
ABELLA 001
Abella StreetGen. Luna St. J. Hernandez Ave. 12,900 C-1 25,000 C-2
J. Hernandez Ave. - 1st 100m. 9,700 C-2 15,000 C-3
after 100m - Cnr Felix Plazo St. 2,500 C-5 12,500 C-4
Cnr F. Plazo St.-Naga 1,200 R-1 4,000 R-1
Bayawas Street Abella Street-Looban 8 1,200 R-1 4,000 R-1
Felix Plazo Street Abella St.- Igualdad Boundary 1,200 R-1 4,000 R-1
All inner lots 720 R-3 2,000 R-5
J. Hernandez Ave. Prieto St.-P. Burgos St. 12,900 C-1 25,000 C-2
General Luna St Prieto St.-P. Burgos St. 12,900 C-1 35,000 C-1
P. Burgos Street Gen. Luna St.-J. Hernandez 12,900 C-1 35,000 C-1
Prieto Street J. Hernandez St.-Gen. Luna St. 12,900 C-1 25,000 C-2
BISALA 720 R-3 2,000 R-5
All Blighted Areas 200 R-5 500 R-8
P R O C E D U R E
For LGUs with computerized assessment rolls1. Replace the existing SMV with the new MV and
calculate the difference between the estimated RPT under the old and new SMV. All RPUs , OR Large Taxpayers (say Top 100) Representative Sample RPUs
2. Determine the range of increase in values.3. Identify areas heavily affected by the increase in
values.
P R O C E D U R E
For non-computerized LGUs 1. Conduct selective tax impact studies on Top ___ Taxpayers (contributing at least 60% of
total RPT collection) Sample RPUs
2. Determine the range of increase in values.3. Identify areas heavily affected by the increase in
values.
O T H E R F A C T O R S T O B E C O N S I D E R E D I N T H E R E V E N U E
I M P A C T C A L C U L A T I O N
Discounts Fines and Penalties RPT Incentives RPT Compliance Rate
THANK YOU!