Real Property Tax Vs Real Estate Tax Philippines
Real property tax and real estate tax are two terms that are interchangeably used in the Philippines. However, these two taxes are not the same in terms of definition and application. In this article, we will explore the differences between real property tax and real estate tax and how they are applied in the Philippines.
What is Real Property Tax?
Real property tax is a tax imposed by the Philippine government on the ownership of real property. Real property refers to land, buildings, and other improvements that are permanently attached to the land. The tax is based on the assessed value of the property, which is determined by the local government. The assessed value is then multiplied by the tax rate to determine the amount of tax to be paid.
What is Real Estate Tax?
Real estate tax is another term used to refer to real property tax in the Philippines. It is a tax imposed on the ownership of real property, including land, buildings, and other improvements. The tax is based on the assessed value of the property and is paid annually to the local government where the property is located.
How are Real Property Tax and Real Estate Tax Different?
The main difference between real property tax and real estate tax is their application. Real property tax is a tax that is imposed on the ownership of real property, while real estate tax is a term that is used to refer to real property tax. In other words, real estate tax is just another term for real property tax.
Another difference between the two is their tax rates. Real property tax rates vary depending on the location of the property and the type of property. The tax rate can range from 1% to 2% of the assessed value of the property. On the other hand, real estate tax rates are generally the same as real property tax rates.
How is Real Property Tax Calculated?
The amount of real property tax to be paid is calculated by multiplying the assessed value of the property by the tax rate. The assessed value is determined by the local government and is based on the fair market value of the property. The fair market value is the price that the property would sell for under normal circumstances.
The assessed value is then multiplied by the tax rate to determine the annual real property tax. The tax can be paid in quarterly installments or in full at the beginning of the year.
How is Real Estate Tax Paid?
Real estate tax is paid annually to the local government where the property is located. The tax can be paid in quarterly installments or in full at the beginning of the year. Failure to pay the tax on time can result in penalties and interest charges.
Real estate tax can be paid through various payment channels, such as banks, online payment systems, and payment centers. The local government will provide the necessary information on how to pay the tax.
Conclusion
Real property tax and real estate tax are two terms that are often used interchangeably in the Philippines. However, they are not the same. Real property tax is a tax imposed on the ownership of real property, while real estate tax is just another term for real property tax.
The calculation and payment of real property tax and real estate tax are similar. They are both based on the assessed value of the property and can be paid in quarterly installments or in full at the beginning of the year.
It is important for property owners to understand the difference between real property tax and real estate tax and their respective application in the Philippines. This will help them comply with their tax obligations and avoid penalties and interest charges.