Buying Land In The Philippines Part 8: Converting Land Use Type

Buying Land In The Philippines Part 8: Converting Land Use Type

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Reclassification can be done through the Municipal Assessor. It is important to be thoughtful about how reclassification, because different land use types are assessed at different tax rates. 

It may be cheaper to make only part of your land residential and the remainder some other type, like orchard etc.... 

Our lot was originally classified as coco land. The reclassification that we went with was 30% residential and 70% orchard. If we had classified our lot as 100% residential the taxes would have been much higher, so we only made the part where the house actually sits residential. 

Since most of the coconut trees had been cut down leaving only a few of them with other assorted fruit bearing trees we reclassified the remaining part as orchard, which is taxed at a lower rate than coco land and much lower than residential.

If we pay our taxes by December 31 we get a 20% discount. The discount is reduced each month until March 1. From March 1-31 the tax is just the regular rate. If you pay after March 31, the there is a 2% penalty. That monthly penalty will be added for up to 36 months an this goes on for every year the tax is not paid.

Davao provides a slightly different scheme on taxes. Davao City will give you the 20% discount if you pay the taxes in full by March 31.

Every municipality has its own unique tax scheme so check with your local assessor's office to find out the specific details for your municipality.

Points to keep in mind:
  • If you do not pay your taxes that you may be in danger of losing your land.
  • In some cases there is tax amnesty for delinquent accounts.
  • Be sure that all of the details on the tax declaration are complete and correct.

1 comment:

pd said...

Not posting the comment jut in case...


I am not an authority or attorney, so my opinion is not worth much.

Anyway, it raises an eyebrow. Check with the land authorities (LRA/LMB/DAR) to know what is legal. Or ask an attorney.

Anyway 70 lots in a hectare is about 135 sqm per lot. There must be roads and other easements in there too making them even smaller. That's less than 38'x38'.

Seems like they don't want to go to the expense of conversion and are letting it fall to the buyers.

Are all the buyers real buyers? Ya know what I mean? There is an old con game that uses fake buyers to drum up real interest.

My lay opinion is they can sell it that way. The more important question is should anyone buy it that way?