How real property tax is calculated
The local assessor determines the property's assessed value using its fair market value and the assessment level for its classification. The local treasurer then applies the rates set by the local government, within the limits in the Local Government Code.
Your bill commonly includes two parts:
- Basic real property tax: The rate depends on the property's location and the local government's ordinance. Under Section 233 of the Local Government Code, the basic rate may be up to 1% of assessed value in a province and up to 2% in a city or municipality within Metro Manila.
- SEF tax: Section 235 imposes an additional 1% of assessed value for the Special Education Fund. It is collected with the basic tax and earmarked to support local public education.
These are maximum statutory rates, not a promise that every property's bill will be exactly the maximum. The actual rate and assessment depend on the property's jurisdiction, classification, local ordinances, and tax declaration. Some properties may also be subject to other lawful charges.
| Location | Basic RPT rate ceiling | SEF rate | Combined ceiling before other charges |
|---|---|---|---|
| Province | Up to 1% | 1% | Up to 2% |
| City or municipality in Metro Manila | Up to 2% | 1% | Up to 3% |
Example using assessed value
Suppose the assessed value shown for a property is ₱2,000,000:
- In a province applying a 1% basic rate, basic tax would be ₱20,000 and SEF would be ₱20,000: ₱40,000 total before any other applicable charges.
- In a Metro Manila city applying a 2% basic rate, basic tax would be ₱40,000 and SEF would be ₱20,000: ₱60,000 total before any other applicable charges.
This is an illustration, not a quote. The assessed value is not necessarily the property's market price, and your local rate may be lower than the ceiling. Check the latest assessment and billing with the city or municipal treasurer where the property is located.
Why do you have to pay RPT?
Real property tax is a local government revenue source. It helps fund local services and public needs, while the SEF portion is dedicated to local education programs. Paying the tax keeps the property account current and avoids delinquency, which can lead to interest and collection action under the law.
RPT is different from association dues, income tax, and taxes charged when buying or selling a property. It is generally billed annually, although local rules may allow payment by installments or offer an early-payment discount. Confirm payment deadlines and any discount with your local treasurer.
How to check and pay your RPT
- Find the property's tax declaration and latest real property tax bill or statement of account.
- Confirm the assessed value, property classification, basic rate, SEF amount, and any other charges.
- Pay through the authorized city or municipal treasurer's office or its official payment channel, and keep the official receipt.
- If the amount or property details look wrong, ask the local assessor about the assessment and the treasurer about the billing before paying.
If the property is rented out, check the lease for any agreement about who reimburses or pays the RPT. That arrangement between landlord and tenant does not change the tax amount assessed by the local government.
For the legal basis, see Sections 233 and 235 of the Local Government Code of 1991 (Republic Act No. 7160). Rates, payment options, and property assessments can vary by locality, so verify your own bill with the relevant local government. This article is general information, not tax or legal advice.