A. General Principles

General Principles and Definitions in Real Property Assessment

Under Republic Act No. 12001, several foundational terms govern the appraisal and taxation of real property. An appraiser, also known as a valuer, refers to a person who conducts valuation, specifically possessing the necessary qualifications, license, ability, and experience to execute or direct real property valuation¹. An assessor is an official or employee in the local government unit who is a duly licensed appraiser and performs the appraisal and assessment of real properties—including plant, machinery, and equipment—for taxation and other purposes, a term that also includes an assistant assessor¹. A building refers to a man-made structure permanently attached to land for residential, commercial, industrial, recreational, or other purposes, whereas depreciation is defined as a reasonable allowance for exhaustion, wear, and tear, including a reasonable allowance for obsolescence¹.

The determination of property tax liability relies on distinct statutory steps and metrics:

• Assessment: Refers to the act or process of determining the value of a property, or proportion thereof subject to taxation, including the discovery, listing, classification, and appraisal of properties¹.
• Assessment Level: Refers to the percentage applied to the market value to determine the taxable value of the property based on property classifications as prescribed in Republic Act No. 7160, otherwise known as the "Local Government Code of 1991", as amended¹.
• Assessed Value: Also known as taxable value, refers to the market value of the property multiplied by the corresponding assessment level¹.