Market or Assigned Value of Property Reflected in the Certified True Copy of Tax Declarations

February 10, 1988 BIR RULING NO. 035-88 21 (e) 000-00 035-88 Gentlemen : This refers to your letters dated April 8, 1987 and November 5, 1987 requesting information as to why this Office does not honor the market or assigned value of property reflected in the certified true copy of tax declarations issued by your Office but in its stead computes the same with an additional fifty percent (50%) of said value. cdtech In reply, please be informed that the reason for non-application of the market values of real property as reflected in the tax declarations of Provincial and City Assessors is the fact that said market values are invariably lower than the fair market value. In fact, it is well-settled that the market values fixed by assessors for real property tax purposes do not represent the actual fair market value of said properties. (Monserrat vs. Collector, CTA Case No. 11, December 28, 1955). Hence, pursuant to Section 16(e) of the Tax Code, reading as follows: "(a) Authority of the Commissioner to prescribe real property values. The Commissioner is hereby authorized to divide the Philippines into different zones or areas and shall, upon consultation with competent appraisers both from private and public sectors, determine the fair market value of real properties located in each zone or area. For purposes of computing any internal revenue tax the value of the property shall be whichever is the higher of: (1) The fair market value as determined by the Commissioner; or (2) The fair market value as shown in the schedule of values of the Provincial and City Assessors." the Commissioner has been authorized to determine zonal values as basis for real property valuation for internal revenue tax purposes. Pending final determination of zonal values and as a short-run measure to establish a more realistic basis for real property valuation, one of the transitory valuation rules is that if real property is classified in the tax declaration as a commercial or industrial property, the same shall be increased by 50% regardless of regional location. (Revenue Audit Memorandum Order No. 3-87.) Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner