DOF: Updated property values don’t mean higher taxes

The Department of Finance (DOF) has sought to dispel concerns that the Real Property Valuation and Assessment Reform Act (RPVARA) will automatically lead to higher property taxes, stressing that local government units (LGUs) retain full authority to lower assessment levels, tax rates, or both.

In a news release, Finance Secretary Frederick D. Go said the reform updates property valuations to reflect current market conditions but does not require LGUs to impose higher taxes.

“RPVARA does not mean an increase in real property tax. This is a common misconception surrounding the law. There is an assumption that once market values are updated, taxes will shoot up. The authority to determine assessment levels and tax rates remains exactly where it has always been, which is with local governments,” Go said.

The clarification comes as the DOF steps up its engagement with local governments to implement the new law, which seeks to establish a uniform, transparent, and market-based property valuation system nationwide.

Speaking before governors, mayors, local government leagues, and development partners during the National Executive Forum of Governors and City Mayors on RPVARA Implementation, Go urged local officials to view the reform as an opportunity to improve governance and attract investment.

“We urge each of you today to see RPVARA as a strategic investment in the future of your localities. Lead this reform. Implement it with urgency. Use it to make your LGUs fair to taxpayers, trusted by investors, and easier to do business in,” he said.

Under RPVARA, property values will be updated using a single national valuation standard, replacing inconsistent and outdated assessment systems that have long varied across local governments.

The DOF emphasized, however, that updated market values do not automatically translate into higher real property taxes. LGUs retain fiscal autonomy to determine assessment levels and tax rates based on local priorities, fiscal conditions, and the needs of their constituents.

According to the department, local governments may reduce assessment levels, tax rates, or both to lessen the property tax burden while maintaining sound fiscal management.

To support implementation, the DOF said the Bureau of Local Government Finance (BLGF) will provide technical assistance and capacity-building to help LGUs transition to the new system.

“We will help you navigate the transition, address challenges, and build the capabilities needed to sustain this reform. We want every LGU to have the confidence, capability, and support to make RPVARA work for your communities and for the growth of your municipalities,” Go said.

The DOF said the reform is designed to create a fairer and more predictable property valuation system that strengthens taxpayer confidence, improves the investment climate, and supports better local public services.