The Department of Finance (DOF) highlighted that the Real Property Valuation and Assessment Reform Act (RPVARA) does not automatically increase real property taxes, as local government units (LGUs) retain the authority to reduce assessment levels, tax rates, or both to lower property taxes based on their priorities and the needs of their constituents.
“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,” Finance Secretary Frederick D. Go said.
The DOF is guiding LGUs in implementing the reform to create a fairer, more transparent, and investment-friendly property valuation system that will support better public services and local development.
Speaking before governors, mayors, LGU leagues, and development partners at the National Executive Forum of Governors and City Mayors on RPVARA Implementation, Sec. Frederick Go emphasized LGUs’ vital role in modernizing property valuation nationwide.
“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.
RPVARA seeks to adopt one standard for property valuation across the country to ensure that values reflect current market conditions, eliminating inconsistent and outdated assessments while strengthening public confidence in the system.
Sec. Frederick Go emphasized the importance of effective fiscal planning, noting that RPVARA gives LGUs the flexibility and the fiscal autonomy to calibrate assessment levels, tax rates—or both, depending on their local priorities, fiscal position, and the needs of their constituents.
The updated market values do not automatically translate to higher real property taxes as LGUs retain the authority to determine how these valuations are reflected in taxation. LGUs can reduce assessment levels and tax rates to lower property taxes.
To ensure that communities benefit from the law, Sec. Frederick Go assured LGUs that the DOF, through the Bureau of Local Government Finance (BLGF), will guide them every step of the way in the implementation process.
“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,” he said.
