Types of Tax Declaration for Real Properties in the Philippines

When purchasing real estate in the Philippines, understanding the various requirements involved is crucial for a smooth and legitimate transaction. Among the important documents to check during the buying process is the tax declaration of the property. However, have you encountered a seller that shows two separate tax declarations for the lot and the house or building? Let’s find out why are there different tax declarations for each real property.

Different Types of Tax Declaration?

A tax declaration is the document officially issued by the Municipal Assessor’s Office. This legal document serves as an official record of the appraised property value to calculate real property tax. There are two main types of tax declaration in the Philippines: tax declaration for the land and tax declaration for the house or building improvements. These documents hold critical information that can affect the buyer’s investment.

These declarations serve different purposes in the real estate transaction:

1. Tax Declaration for the Land. This document provides an assessed value of the land. It includes essential information such as location, size, land classification, and its market value. The local government uses this assessed value to compute the property taxes due each year.
3. For a buyer, land tax declaration may strengthen the claim of the seller as owner of the land. It also means that the land is free from disputes regarding ownership or classification. The document also shows how much tax the seller is currently paying for the lot property, hence providing an idea of the market value and asking price.
5. Tax Declaration for the House or Structure. The structure tax declaration focuses on the value of the buildings or structures on the property, such as houses, apartments, or commercial buildings. This document provides the assess value of the house based on factors including the type of construction, materials used, and the overall area of the building.
7. It’s equally important to secure this document so buyers can understand the value of the structure and whether the house has been declared properly for tax purposes. The document also reveals any improvements or renovations made to the property and provides insight into its overall worth.

Advantages of Tax Declaration

Tax declarations are prima facie evidences of property ownership in the Philippines. It’s important to update the tax declaration to ensure that the valuation of the property is accurate and updated payments may reduce tax liabilities. Real property taxes are filed every year by 1st of January, with payment dues by 31st of January to avoid the penalty. There are property tax exemptions for charitable and government properties, specific industrial and agricultural equipment, and certain vacant land uses.

Don’t be surprised if you are given two tax declarations when buying a real property. It only shows the land and the structure built on it have updated tax records. If you are planning to buy a property with tax declaration only, check it with the Registry of Deeds before paying in full. You can also check our updated listing of house and lot for sale in Baguio, Bulacan, Tagaytay, and nationwide at REALS Corporation website.