THE REAL Property Valuation and Assessment Reform Act (RPVARA) is expected to reduce uncertainty in property investment by standardizing land valuations and requiring regular updates, a shift analysts said could improve project planning and accelerate large-scale developments.
The reform seeks to replace inconsistent local valuation practices with a uniform framework, addressing long-standing issues such as varying land values and assessment methods across jurisdictions.
By establishing a single valuation system and updating property values more regularly, the law is expected to improve transparency and enhance the Philippines’ competitiveness as an investment destination, analysts said.
Savills Philippines Research Head Dino Palanca said institutional investors, including real estate investment trusts and private equity firms, favor markets where property valuations are consistent and aligned with international standards.
“Standardized property valuations are likely to strengthen investor confidence over the medium to long term by improving transparency and reducing uncertainty in property transactions,” he told BusinessWorld in a Viber message.
Mr. Palanca said the law could also improve planning for large-scale developments by making land acquisition costs more predictable.
“Rather than reacting to infrequent and often significant valuation adjustments, developers can incorporate more predictable changes into their financial models, resulting in more disciplined capital allocation and project planning,” he said.
While the law’s impact may be gradual rather than immediate, analysts said it addresses structural inefficiencies that have historically complicated due diligence.
Colliers Philippines Research Director Joey Roi Bondoc said the law establishes a unified valuation framework through regularly updated Schedules of Market Values (SMVs) and a national electronic database of real property transactions.
The law requires SMVs to be updated every three years, a measure analysts said could help stabilize the market. Data from the Bureau of Local Government Finance in 2021 showed that nearly 60% of local government unit (LGU) market values and 40% of Bureau of Internal Revenue zonal values were outdated.
Cushman & Wakefield Philippines Research Director Claro Cordero said regular updates would make the market more rational by avoiding abrupt valuation adjustments.
“The result is less severe shock risk from long-delayed revisions, traded for more visible incremental movement,” he said in an e-mail.
Beyond private-sector development, analysts said the RPVARA could also streamline public-private partnership projects by providing a common valuation framework for land acquisition.
A standardized valuation system could help reduce disputes over land acquisition and rights of way, which have historically delayed infrastructure projects.
However, analysts cautioned that the law’s “mass appraisal” approach, which values properties as a group based on shared characteristics, may not fully capture unique asset characteristics, such as premium views, building quality, or irregular site configurations.
Mr. Cordero said the credibility of the system would depend on “frequent recalibration, clean transactional data, transparent methodology, and strong governance.”
Property owners are preparing for the end of the law’s transition period in 2028, during which annual increases in real property taxes are capped at 6%.
Beginning in 2029, LGUs will have greater flexibility to adopt their own tax ordinances, potentially resulting in wider differences in tax burdens across jurisdictions. — Juliana Chloe A. Gonzales