Abby Binay OKs landmark ordinance lowering property taxes in Makati聽
Makati City Mayor Abby Binay —黑料社 file photo
MANILA, Philippines — The Makati City government approved the highest amount of real property tax (RPT) reduction in the city so far.
Makati said it could still weather the revenue loss, thanks to the savings made following the departure of the 10 “embo” villages which the local government said are subsidiaries to the city coffers.
Outgoing Makati mayor and senatorial candidate Abby Binay on Tuesday said she approved the ordinance that lowered existing real property tax rates on all classes of land in the city, effective January 1, 2025.
On March 24, Binay signed City Ordinance No. 2025-047 amending sections of the Revised Makati Revenue Code, or City Ordinance No. 2004-A-025, which pertain to the imposition of basic real property tax and assessment levels.
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“Following a comprehensive review of current tax rates and prevailing economic conditions, we have proceeded with our plan to lower tax rates for all classes of land in the city,” Binay said in a statement.
Binay said this move comes as the city had a “substantive savings” of up to P7.9 billion a year following the the removal of subsidies to 10 “embo” barangays.
“Residents and property owners in the city will now enjoy substantial savings from the biggest tax reduction and lowest assessment levels implemented by the city government to date,” she added.
Binay said the tax rate for residential properties has been reduced from 1.5 percent to 1.0 percent; commercial properties from 2.0 percent to 1.5 percent; industrial properties from 2.0 percent to 1.5 percent; and special properties from 1.5 percent to 0.5 percent.
Moreover, the additional tax rate for properties classified as residential/commercial has also been reduced from 0.25 percent to 0.125 percent.
“This move is expected to provide relief to residents and boost Makati’s competitiveness as a premier investment destination for large corporations, startups, and small entrepreneurs,” Binay said.
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The Supreme Court (SC) declared that Taguig has the rightful jurisdiction over Fort Bonifacio Military Reservation — where Bonifacio Global City and the Embo barangays are located — and not Makati.
SC stated that that 10 barangays in Makati’s second district (namely Pembo, Comembo, Cembo, South Cembo, West Rembo, East Rembo, Pitogo, Rizal, Post Proper Northside and Post Proper Southside, including Bonifacio Global City) “based on historical, documentary and testimonial evidence, indeed fall within the territorial jurisdiction of Taguig.”
“I believe we can manage very well even with lower RPT collection,” Binay said.
“As more businesses choose to locate in Makati, our revenue from business tax and relevant fees will increase as well. More importantly, more jobs will be created for our residents,” she continued.
Other taxes
The tax rates for buildings, machinery, and other improvements remain the same, as follows:
- residential: 1.55%
- commercial: 2.05%
- industrial: 2.0%
- special: 0.5%
Under the amended of the revenue code, the assessment levels applied to the fair market value of real property to determine its assessed value have also been significantly lowered.
For residential properties, the assessment level per classification has been adjusted as follows:
- R-1: from 12% to 0.65%
- R-2: from 12% to 0.30%
- R-3: from 12% to 0.25%
Commercial and Industrial properties, previously assessed at 40 percent, are both assessed at lower rates.
For commercial properties, the following assessment rates now apply:
- C-1: 2.0%
- C-2: 0.70%
- C-: 0.60%
For industrial properties, the following assessment rates now apply:
- I-1: 2.0%
- I-2: 0.70%
- I-3: 0.60%
Under special classes, assessment levels have been retained for lands located in predominantly commercial/industrial areas at 0.70 percent, and lands situated in predominantly residential areas, 0.30 percent.
For buildings, machineries, and other improvements, assessment values based on actual use remain as follows:
- cultural: 15%
- scientific: 15%
- hospital: 15%
- local water districts, government-owned or controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power: 10%
Under Section 4, any excess that may result from the application of the ordinance on real property tax assessments that have been paid before the approval of the ordinance, covering the period Jan. 1, 2025 onwards, will be considered as a tax credit that may be applied to succeeding real property tax assessments.
“This landmark ordinance highlights the Makati city government’s commitment to a fair, efficient, and transparent tax system, while ensuring fiscal stability and adaptability to changing economic conditions,” the statement said.
