1/27/2022

PS 109
R E AL E S TAT E AP P R AI S AL AN D
P R O P E R T Y M AN AG E M E N T ( O B E )

INSTRUCTOR: EnP/ REB Riza C. Belgira

Fundamentals of Property Valuation

CONCEPTS/PURPOSES OF VALUE AND PRINCIPLES ELEMENTS THAT CREATE MARKET VALUE/FAIR FORCES INFLUENCING APPROACHES TO VALUE
BASIC APPRAISAL FOR OF VALUATION VALUE MARKET VALUE VALUE
REAL ESTATE BUSINESS

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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Concepts/Purposes
of Basic Appraisal
for Real Estate
Business

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

▪ During the encomienda system of the

Spanish Era, there was no Real Property
Tax in the Philippines.
Historical ▪ Taxes on land were levied primarily on

and Legal male tenant of 16-60 years old as personal

taxes or tributes rather than the real land

Background taxes.
▪ They were paid generally in the form of
agricultural products for the privilege to
work on the land of the encomiendas.

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It was in 1901, during the American regime that the real property
taxation in the Philippines was formally instituted.

In 1901, Act Nos. 82 & 83 of the Philippine Commission organized

the municipal and provincial governments, respectively.

Historical These laws authorized the municipality and province to levy taxes
on real property. These taxes became the source of locally-
generated revenues.

and Legal Likewise, Provincial and Municipal Board of Assessors were

created under the same law in each province and municipality.

Background The Municipal Board was charged with the assessing of real
properties for taxation purposes while the Provincial Board was
authorized to levy an annual tax on the real property assessed
value.

The said Act also charged the Provincial Treasurer of the

supervision of the real property assessment and tax collection.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

Other laws affecting assessment and taxation of real property

were enacted and were later compiled and incorporated in the
Administrative Code of 1916 under the Jones Law.

Historical On December 5, 1932, Act. No. 3995 “An Act Revising and
Compiling the Assessment Laws” was passed, which is in effect
repealed, compiled and incorporated into a single Body all
existing laws relating to the assessment and collection of real
and Legal property taxes.

Background Then in July 1939, the National Assembly passed Commonwealth

Act No. 470 repealing Act. No. 3995. CA No. 470 continued as the
Assessment Law from 1940;

until the birth of the new society in 1972 when His Excellency,
President Ferdinand E. Marcos initiated reforms in real property
tax administration under Presidential Decree (PD) Nos. 25 and 76.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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In May 20, 1974, PD No. 464 entitled “The Real Property Tax
Code” was promulgated as the law governing the Real Property
Tax Administration in the Philippines. The said law was designed

Historical to upgrade the assessment techniques, procedures and practices

in the country.

and Legal As provided under Section 8 of Batas Pambansa Blg. 337, dated
February 10, 0983, the Real Property Tax Code (PD 464) was

Background recognized under the Local Government Code of 1983.

Accordingly, PD 464, as amended, continued to be the governing

laws relative to the appraisal and assessment of real property for
taxation purposes.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

▪ 1901. Real property tax was introduced

▪ 1939. CA 470. Separation of assessment and
Historical collection ( Provincial assessors)
▪ 1972. PD No 76. Changes and reforms in RPTA (
and Legal evolved , GIS based)

Background ▪ 1974. PD 464. Property Tax Code

▪ LGC 1991 – DOF to promulgate rules and
regulations for classification , appraisal and
assessment of real property for taxation
purposes.

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Definition
▪ In an economic context, "appraisal" is the
process of estimating the value of specific
property at a stated time and place. The word
"valuation" is also used in this sense, as a
synonym for appraisal.
▪ A leading appraisal text defines appraisal as
"the act or process of estimating value."

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

Definition
WHAT IS APPRAISAL? APPRAISAL IS NOT:

Appraisal –is an estimate or opinion of ▪ Statement of Value

future value, is a stated result of valuing a ▪ Determination of Value
property by making ;
▪ Fixing a Value
1. Cost Estimate
2. Forecasting Earnings
3. Or combination Arriving to an accurate/useful
estimate of value depends on the
experience and skills of the appraiser
/valuer.
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Definition
COST ESTIMATION EARNING FORECAST

Cost estimation- amount of money ▪ Forecast ( estimate) of the future net

required at specific date to: of monetary returns from or
something owned or considered
1. Construct something owned.
2. Produce
▪ Since appraisal is an estimate or
3. Replace
opinion of value, different appraisers
4. Reproduce
or Valuers may arrive at different
opinions or estimates.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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Purpose of Appraisal
▪ Many appraisals are required by economic transactions,
including the purchase and sale, financing, leasing, and
insurance underwriting of property.
▪ Other appraisals are required as part of private legal
actions such as divorce, bankruptcy, and lawsuits involving
property.
▪ Governmental actions, including income tax matters and
condemnation proceedings, may also require appraisals.
Perhaps the largest government involvement with
appraising is in the area of property taxation.
▪ The duty of the appraiser is to prepare appraisals for
property tax purposes using recognized methods and
techniques that are consistent with property tax law.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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Types of Formal Appraisal

BUSINESS AND LITIGATION TAXATION INSURANCE

FINANCE

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Real Estate
Appraiser
▪ A duly registered and licensed
natural person who , for a
professional fee, compensation or
other valuable consideration ,
performs or render or offers to
perform services in estimating and
arriving at an opinion of or acts as
an expert on real estate values,
such services of which shall be
finally rendered by the
preparation of the report in
acceptable written form.

(Sec. 3, Par. G Sub Par. 2 of RA 9646)

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Land, Real Estate and

Property Concepts
▪ Land is also referred as real estate.
▪ Real estate is defined as the physical land and
those human-made items which attached to
the land.
▪ Property is a legal concept encompassing all
the interests, rights and benefits related to
ownership.
▪ The ownership of real estate is called real
property.
▪ Real property includes all the rights, interests,
and benefits related to the ownership of real
estate.
▪ The combination of rights associated with the
ownership of real property is referred to as the
bundle of rights.
© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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Land, Real Estate and

Property Concepts
▪ Valuation of land is an economic concept.
▪ Value is created by real estate’s utility, or
capacity to satisfy the needs and wants of
human societies.
▪ Many recognized principles are applied in
valuing real estate. They include the
principles of supply and demand;
competition; substitution; anticipation, or
expectation; change; and others.
▪ Common to all these principles is their
direct or indirect effect on the degree of
utility and productivity of a property.

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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Thank you
QUESTIONS?

© 2022 EnP/REB Riza C. Belgira. No Part of this presentation maybe copied in any form without written consent from the author.

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