Amendment of Transitory Rules on Valuation of Real Property for Internal Revenue Tax Purposes

June 10, 1986 REVENUE AUDIT MEMORANDUM ORDER NO. 3-A-86 SUBJECT : Amendment of Transitory Rules on Valuation of Real Property for Internal Revenue Tax Purposes TO : All Internal Revenue Officers and Others Concerned Pending the establishment of zonal values, and to achieve the objective of limiting discretion in the valuation of real property for tax purposes, without in the process unduly prejudicing the interest of the government, Paragraph 2 of Revenue Audit Memorandum Order No. 3-86 is hereby amended to read as follows: "2. Real property valuation during transitory period . aisa dc Pending final determination of zonal values and as a short-run measure to establish more realistic basis for real property valuation, this Office hereby orders that the market value of real properties (land and/or improvement) appearing in the latest declaration of real property filed in the Provincial/City Assessor's Office, be increased by ten percent (10%) thereof to cover inflationary value (except where the real property is located in exclusive villages or subdivisions in Makati (East and West) and in other Revenue Districts within Revenue Region No. 4-B (Quezon City) in which case the increase shall be 50%), shall be used as the value for assessing the following internal revenue taxes: 2.1 Tax on capital and ordinary gains from real property transactions and documentary stamp tax on deeds of sale of real properties, except when the gross selling price appearing in the deed of sale is higher than the above prescribed market value in which case such gross selling price shall be used as the tax base; 2.2 Estate tax; 2.3 Donor's tax; and 2.4 Other applicable taxes. Where the revenue officer concerned feels that the 10% or 50% increase is not valid or where the taxpayer does not agree to the 50% increase over the market value appearing in the assessor's declaration, the certificate authorizing registration to be issued by the Revenue District Officer to the taxpayer shall be plainly marked 'TENTATIVE ONLY'. Upon establishment of the zonal value applicable to the property in question, the assessment shall be revised accordingly." acd This Order takes effect immediately. (SGD.) BIENVENIDO A. TAN, JR. Commissioner