Makati City may raise property values tenfold. Why are some residents worried?

MANILA, Philippines – Residents in Makati City are urging the local government to reconsider a proposed property valuation increase, warning that the plan could significantly raise real property taxes and strain homeowners and tenants.

In a letter submitted on February 20 to Makati City Assessor Dominic Garcia, at least 190 residents and property managers from Salcedo, Malugay, and Jupiter, raised concerns over the proposed schedule of market values (SMV), which could increase the “assessed value of land and buildings by at least tenfold.”

The proposed SMV stems from the implementation of the Real Property Valuation and Assessment Reform Act, which took effect in June 2024 and requires local government units to update property valuations based on prevailing market values.

Under the law, local assessors must prepare updated property values after conducting two public consultations before submitting them to the Bureau of Local Government Finance.

The city government held its second consultation on February 13.

“Many consider Salcedo their home, not merely an investment,” the residents said in the letter. “The proposed increase assumes owners could easily sell their property to benefit, but this overlooks long-time residents, retirees, and families living on fixed incomes.”

Ripple effects

Residents warned that higher valuations could ripple through other costs. Association dues, taxes on condominium common areas, and fees charged by the Makati Commercial Estate Association could rise, ultimately passing the burden to tenants and homeowners alike.

The proposed SMV also does not differentiate between older and newer developments, stakeholders argued.

The residents said that “the age of the building, the number of floors it has, as well as the amenities it can offer its occupants should be considered when placing a value right next to it.”

The group of residents also pointed out the oversupply of condominium units in Metro Manila. Based on property consultancy firm Colliers Philippines’s estimate, it may take over eight years before ready-for-occupancy units in Metro Manila are sold.

The oversupply of condominium units may be attributed to several factors. Among them is the government’s directive to ban Philippine offshore gaming operations (POGOs), which has affected even the demand for office space. During the COVID-19 pandemic, many also invested in properties outside of Metro Manila.

“Higher taxes could push buyers, renters, and businesses to consider relocating elsewhere,” the stakeholders warned.

Call for gradual implementation

While recognizing the city’s authority to update valuations, the group proposed measures to soften the impact:

• Implementing increases gradually over several years
• Capping annual tax hikes
• Providing relief for senior citizens and fixed-income households
• Publishing transparent valuation data and impact assessments
• Adjusting assessment levels and tax rates to offset the higher valuation base

“Taxes are necessary but should not price residents out of their homes, and businesses out from their market. In its current form, the proposal is too much, too soon,” the stakeholders said.

The letter was also shared with Makati Mayor Nancy Binay and the city council.

Rappler has reached out to the Makati City government for comment. This story will be updated once they respond. – Rappler.com