The Property Valuation and Assessment Reform Act (RPVARA) is expected to reduce uncertainty in property investment by standardizing land valuations and requiring regular updates. This shift in approach could improve project planning and accelerate large-scale developments, analysts said.
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.
Institutional investors, including real estate investment trusts and private equity firms, favor markets where property valuations are consistent and aligned with international standards, according to analysts.
“Standardized property valuations are likely to strengthen investor confidence over the medium to long term by improving transparency and reducing uncertainty in property transactions,” analysts noted.
The law could also improve planning for large-scale developments by making land acquisition costs more predictable, allowing developers to incorporate more predictable changes into their financial models.
This would result in more disciplined capital allocation and project planning, rather than reacting to infrequent and often significant valuation adjustments.
The law's establishment of a unified valuation framework through regularly updated Schedules of Market Values (SMVs) and a national electronic database of real property transactions is expected to have a positive impact.
The law requires SMVs to be updated every three years, which could help stabilize the market, especially considering that nearly 60% of local government unit (LGU) market values and 40% of Bureau of Internal Revenue zonal values were outdated in 2021.
Regular updates would also make the market more rational by avoiding abrupt valuation adjustments, reducing the risk of severe shock from long-delayed revisions.
The RPVARA could also streamline public-private partnership projects by providing a common valuation framework for land acquisition, reducing disputes over land acquisition and rights of way that have historically delayed infrastructure projects.
However, analysts cautioned that the law's "mass appraisal" approach may not fully capture unique asset characteristics, such as premium views, building quality, or irregular site configurations.
The credibility of the system would depend on “frequent recalibration, clean transactional data, transparent methodology, and strong governance,” according to analysts.
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, local government units will have greater flexibility to adopt their own tax ordinances, potentially resulting in wider differences in tax burdens across jurisdictions.
