Assessment Level (Real Property) - Philippine Tax Glossary
Updated June 13, 2026
Definition
The assessment level is the percentage of fair market value used to compute the assessed value of real property for Real Property Tax (RPT). Each province, city or Metro Manila municipality sets it by ordinance, within maximums in the Local Government Code. For land the maximum is 20% for residential, 40% for agricultural and 50% for commercial and industrial use.
Assessment levels are fixed by ordinance of the sangguniang panlalawigan, sangguniang panlungsod or the sangguniang bayan of a Metro Manila municipality, at rates that may not exceed the ceilings in Section 218 of the Local Government Code of 1991 (Republic Act 7160). Separate schedules apply to land, buildings and machinery. For buildings the level rises with market value; a residential building worth ₱175,000 or less has a 0% level and the ceiling reaches 60% above ₱10,000,000. The assessed value equals the fair market value multiplied by the assessment level, and the RPT rate is then applied to that assessed value. For example, a residential lot worth ₱2,000,000 with a 20% assessment level has an assessed value of ₱400,000.
Why it matters
The assessment level, together with the market value and the local RPT rate, sets your yearly RPT bill. Knowing the level that applies to your property's classification lets you check your tax declaration and bill for errors before the period to appeal runs out.
How it works
The local assessor undertakes a general revision of real property assessments every three years (LGC Section 219), updating market values and classifications. Property owners receive Tax Declarations showing the fair market value and the assessed value. The level applied depends on the property's classification by actual use, and land, buildings and machinery are each assessed under their own schedule.
Examples
Residential Property Assessment
Residential lot in Quezon City Fair market value: ₱5,000,000, Assessment level: 20%, Assessed value: ₱1,000,000, Annual basic RPT (assuming a 2% city rate): ₱20,000
Commercial Building Assessment
Commercial lot in Makati Fair market value: ₱15,000,000, Assessment level: 50%, Assessed value: ₱7,500,000, Annual basic RPT (assuming a 2% city rate): ₱150,000
Mixed-Use Property Assessment
Lot used partly for residential and partly for commercial purposes Residential portion (₱8,000,000 FMV × 20% = ₱1,600,000) + Commercial portion (₱4,000,000 FMV × 50% = ₱2,000,000) = Total assessed value: ₱3,600,000
Industrial Property Assessment
Industrial lot in a city Fair market value: ₱25,000,000, Assessment level: 50%, Assessed value: ₱12,500,000, Annual basic RPT: ₱187,500 (assuming a 1.5% city rate)
Agricultural Land Assessment
Rice farm in Nueva Ecija Fair market value: ₱3,000,000, Assessment level: 40%, Assessed value: ₱1,200,000, Annual basic RPT (assuming a 1% provincial rate): ₱12,000
Common misconceptions
- Myth: Assessment levels are the same nationwide. In fact, LGUs set their own rates within prescribed ranges
- Myth: Higher assessment level means higher property value. In fact, for land the level depends on the use classification; only for buildings and other structures does the schedule rise with market value
- Myth: Assessment level changes annually. In fact, these rates usually remain stable between general revisions
- Myth: You can negotiate your assessment level. In fact, levels are set by ordinance based on property classification, not individual circumstances
Questions people ask
What is assessment level for real property?
Assessment level is the percentage of fair market value used to compute a property's assessed value for Real Property Tax. For land, the Local Government Code caps it at 20% for residential and 50% for commercial use.
Why do residential lots have a 20% assessment level?
20% is the maximum the Local Government Code allows for residential land (Section 218). An LGU may set a lower level by ordinance but not a higher one.
How do I know my property's assessment level?
Your Tax Declaration, issued by the City/Municipal Assessor's Office, shows the market value and the assessed value of your property. Dividing the assessed value by the market value gives the level used. The assessor's office can explain the classification applied.
Can assessment levels change after property improvements?
For land, the level follows the classification, so improvements alone do not change it. For buildings, the level in the Local Government Code schedule rises with market value, so an improvement that raises a building's value can move it into a higher bracket. A change in actual use, such as converting part of a residence to commercial space, can also change the class applied to that portion.
What happens if wrong assessment level is applied?
If you disagree with the assessor's action on your assessment, you may appeal to the Local Board of Assessment Appeals within 60 days from receipt of the written notice of assessment (LGC Section 226). You may also ask the assessor's office to correct the classification.
Do condominiums have different assessment levels?
Condominium units are buildings, so the building schedule applies, not the land schedule. For residential buildings the Local Government Code ceiling rises with market value, from 0% for units worth ₱175,000 or less up to 60% above ₱10,000,000. Units used for commercial purposes fall under the commercial schedule.
How often do LGUs review assessment levels?
Assessors carry out a general revision of assessments every three years (LGC Section 219). The assessment levels themselves are set by local ordinance, so they change only when the sanggunian amends that ordinance.
Are there special assessment levels for senior citizens?
Assessment levels do not change with the owner's age. Any RPT relief for senior citizens depends on the LGU's own ordinances.
What assessment level applies to vacant lots?
Land is classified by actual use. A vacant lot is assessed under the class the assessor assigns, such as 20% for residential or 50% for commercial land at the LGC ceilings.
Can I appeal my property's assessment level?
The level is set by ordinance, so the usual dispute is about classification or market value. You can appeal the assessor's action to the Local Board of Assessment Appeals within 60 days from receipt of the written notice of assessment.
Next steps
Learn more
Real Property Tax Calculator
Property Tax Declaration Guide
BIR Form 1706 (Capital Gains Tax Return)
Capital Gains Tax Calculator
Local Government Unit Tax Rates Guide
Property Assessment Appeal Process
Tax Declaration Requirements
Fair Market Value Determination Guide
Related content
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Taxpayer guides
BIR forms
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Sources & References (1)
Primary sources and the laws, regulations, and official issuances this page relies on. Links open the recorded source documents or references.
- LawPhil Project (Arellano Law Foundation). “RA 7160 (LGC) §218: assessment levels by property class (max ceilings).” lawphil.net. Republic Act No. 7160, Local Government Code, Sec. 218. Source checked .