what is zonal value ? zonal value is the basis of the Bureau of Internal Revenue, City Assessor’s Office and Register of Deeds in computing the respective taxes due on the property.
the zonal value ” DOESN’T ” necessarily give the True Market Value ( what a Seller is willing to sell property for and Buyer is willing to pay for determines Market Value ) of a property. as mentioned earlier, it’s just a measure used by the government agencies to compute TAXES ( real estate tax, capital gains tax, documentary stamp tax, transfer tax, etc… ) on a property.
i don’t really know how the government base their figures on zonal value but one thing i’ve realized is that the zonal value of a property is either lower or higher than the True Market Value of a property.
keep in mind that when purchasing a property, one has to base the purchase on the Market Value of the property or lower than Market Value if possible to get a “good deal”.
the zonal value is also important to the Seller as the Capital Gains Tax ( tax due on sale of the property, whether it’s a GAIN or a LOSS ) is based on the Selling Price or Zonal Value whichever is higher.
of course, acquiring a property below Market Value depends whether it’s a Seller’s Market or a Buyer’s Market. the needs of the Seller ( bank loan, sickness, domestic affairs, etc.. ) also is another variable that can work in the favor of a buyer / investors. on the other hand, it could also work in the favor of the Seller ( need to buy property for consolidation, property is adjacent, etc.. ). so as you can see, it’s a case to case basis. one has to be patient in acquiring and selling a property.
the philippine real estate market has been experiencing a” boom” for quite sometime now as we’ve seen how property values have reached an all time high in most areas. zonal values for some areas have already been updated, some have been raised as much as 300% !
this appreciation has to correct or reach an equilibrium for buyers to accept the new benchmark. there’s quite a high percentage hoping that the property values would go down but that hasn’t really happened to most areas. what we’ve seen in a consolidation and a minor correction but property appreciation for the rest of the year is inevitable.
the variables are now different in comparison to what we had before. now we have global financial crisis not only in the united states but in europe as well. that’s the reason, the asia pacific property market has continued to be the alternative for a lot of investors.
anyway, below is a link for zonal values i found which is an alternative to the Bureau of Internal Revenue Website. you may use this to compute the necessary taxes involved with regards to the sale or purchase of a property. ( my previous blog has already discussed capital gains tax and documentary stamp tax )
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Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016, 2017
Real Estate Broker’s Association of the Philippines 2000-2015
President, Greenhills Chapter 2008, 2009
Philippine Association of Real Estate Brokers
San Juan Mandaluyong Chapter 1998, 1999
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