2. PUBLISHED BY
•THE BUREAU OF LOCAL GOVERNMENT
FINANCE WHICH IS AN INSTITUTIONAL
MEMBER OF THE INTERNATIONAL
VALUATION STANDARD COUNCIL SINCE 05
MARCH 2018
3. BASIS OF PVS 2018 edition
2017 International Valuation
Standards Council
(1 King Street London United
Kingdom)
4. DEPARTMENT ORDER NO. 073 SERIES OF 2018
ISSUED BY THE DEPARTMENT OF FINANCE
ON 02 JULY 2018
PRESCRIBING THE PVS
5. LEGAL BASES
•Section 201 of the Local Government Code of
1991 – rule making authority of DOF
•Section 33 (1) and (2) Chapter 4 Title II Book IV
of Executive Order (EO) No. 292 Series of 1987
otherwise known as the Administrative Code of
1987 – Bureau of Local Government Finance
assistance in formulation and implementation
of policies of LGU assessment operation
6. •Section 2 of RA 9646 – policy of state on
standards of practice
•Section 4 (E) of Republic Act No. 10963 or
the Tax Reform for Acceleration and
Inclusion (TRAIN) - BIR’s authority to
prescribe real property values based on the
current PVS
7. BOARD EXAM:
LOCAL GOVERNMENT CODE OF 1991
•Signed: 10 October 1991 (10/10/91)
•Effectivity: 01 January 1992 (01/01/1992)
•President: Corazon Aquino
8. THREE PARTS
1. International Valuation Standards (IVS) 2017 –
note that a new IVS was issued effective 31
January 2022;
2. Philippine Context Focusing on Valuation for
Taxation and Other Purposes
3. Guidance Notes – specific valuation issues
9. MASTER THE LIST OF ACRONYMS PAGE 119
• CAMA – Computer Assisted Mass Appraisal
• CARP-LAD – Comprehensive Agrarian Reform Program - Land
Acquisition and Distribution
• LAR – Local Assessment Regulations
• MAG- Mass Appraisal Guidebook
• MRPAAO- Manual on Real Property Appraisal and Assessment
Operations
• RROW – Road Right of Way
• VOS- Voluntary Offer to Sell
10. CONCEPT OF DEPARTURE
•A “departure” is a circumstance where
specific legislative, regulatory or other
authoritative requirements must be
followed that differ from some of the
requirements within IVS. (IVS 6.01,
2022)
11. NOTE: THE PRINCIPLE:THE GENERAL MUST
YIELD TO THE SPECIFIC
• A valuer may still state that the valuation was
performed in accordance with IVS when there are
departures in these circumstances. (IVS 60.1, 2022)
• The requirement to depart from IVS pursuant to
legislative, regulatory or other authoritative
requirements takes precedence over all other IVS
requirements (IVS 60.2, 2022)
16. REAL ESTATE APPRAISER LICENSE
REQUIREMENT
1.GRAND FATHER CLAUSE – Section 20
RA 9646
1.LICENSURE EXAMINATION – Section 12
RA 9646
17. EXEMPTION FROM LICENSE
•Section 28:
(e) Public officers in the performance of their
official duties and functions except
government assessors and appraisers.
19. CONTINUING PROFESSIONAL DEVELOPMENT
•Republic Act No. 10912 or the Continuing
Professional Development Act of 2016
•Renewal of License
-15 CPD units for below 60
-5 CPD units for 60 and above
* 30% ceiling for Self-Directed and/or Lifelong
Learning track
21. SCOPE OF WORK: (IVSC, 2022)
1. Identity of Valuer
2. Identity of the client
3. Identity of other intended users
4. Assets being valued
5. Valuation currency
6. Purpose of the valuation
7. Basis/bases of value used
8. Valuation date
22. 9. The nature and extent of the valuer’s work and any limitations
thereon
10. The nature and sources of information upon which the valuer relies
11. Significant assumptions and/or special assumptions
12. The type of report being prepared
13. Restrictions on use, distribution and publication of the report
14. Restrictions on use, distribution and publication of the report
23. CATEGORY OF VALUATION REPORTS
a. Narrative Report
b.Schedule of Real Property Values
c. Form Reports
d.Oral Reports or Depositions
24. DEFINED BASIS OF VALUE VS PREMISE OF VALUE
DEFINED BASIS OF
VALUE
PREMISE OF VALUE
FAIR MARKET VALUE ACTUAL /
PREDOMINANT USE
26. MARKET DATA APPROACH
•ABSTRACTION METHOD mentioned in
Section 210 of LGC and Section 21 (A) 2 LAR
1-92
-Estimate value of improvements to arrive at
estimate of value of land
* General Re-assessment date – every 3
years
27. INCOME OR INCOME CAPITALIZATION
APPROACH
•The capitalized value of the income
represents the present value of property.
(Section 21 (B) LAR 1-92)
28. COST APPROACH
• A.KA. REPRODUCTION/REPLACEMENT COST NEW APPROACH
- Used exclusively in appraising man-made improvements and
structures
• Unit base construction cost – unit cost is multiplied by ground area or
volume to arrive at reproduction or replacement cost
• Depreciated cost - reproduction or replacement cost less depreciation
allowance
(Section 21 (C) LAR 1-92
30. REAL PROPERTY INTERESTS
• Real Property – refers to all the rights, interests and benefits related
to the ownership of real estate. These rights are lumped into a
“bundle of rights (MAG)
• Valuation of Development Property for taxation purposes mut follow
PVS 400 Real Property Interests on Asset Standards.
• However, valuation of Development Property for other purpose must
refer to IVS 410 Development Property on Asset Standards
32. BROWSE THROUGH COMPOSITION OF
APPRAISAL COMMITTEES IN LGUs
For example:
Provincial/City Appraisal Committee
a. Provincial/City Assessor- Chiarperson
b. Provincial/City Engineer – Member
c. Provincial/City Treasurer - Member
34. VALUATION OF LANDS FOR SOCIALIZED
HOUSING
•Provided under Section 13 of RA 7279
Equitable Valuation
-Factor in the blighted status of land
-Zonal value applicable for the corresponding
period basis for fair market value
35. VALUATION OF PRIVATE LAND S FOR
ACQUISITION BY THE GOVERNMENT
• NATIONAL GOVERNMENT
- RROW – Sections 5, 6 and 7of RA 10752 or An Act Facilitating
the Acquisition of Right-of-Way Site or Location for National
Government Infrastructure Projects
• LOCAL GOVERNMENT
- Section 19 of RA 7160 or may adopt above
- - Executive Order No. 132 Series of 1937 – procedures and
creation of appraisal committee.
37. MASS APPRAISAL
• May be utilized as a methodology for Ad Valorem
Taxation or statistical or economic studies.
• Ad valorem Property Taxation – a revenue-raising
procedure, based on the assessed value of property
related to a scale of charges defined by statute within
a specified time frame.
38. DEFINITION
• The practice of appraising multiple properties as of a
given date by a systematic and unform application of
appraisal methods and techniques that allow for
statistical review and analysis of results.
39. CALIBRATION
•The process of analyzing sets of property and
market data to determine the specific
parameters operating upon a model.
40. REVIEWING VALUATIONS
• ADMINISTRATIVE REVIEW – performed by a client or user of
valuation
• DESK REVIEW - Generally performed using a check list of
items.
• FIELD REVIEW – inspection of exterior and interior of
property
• TECHNICAL REVIEW – performed by a Valuer to form an
opinion if report is appropriate, reasonable and supportable
• VALUATION REVIEW – impartial judgment in considering the
work of another Valuer.
41. VALUATION OF HISTORIC PROPERTIES
•Historic Properties – are assets that embody
a cultural, historic and/or architectural
heritage
42. CULTURAL HERITAGE
1. Monuments – of outstanding universal value from
the point of view of history, art or science.
2. Groups of Buildings – architecture, homogeneity or
their place in landscape
3. Sites – works of man or nature or both, archeological
sites of outstanding universal value from the
historical, aesthetic, ethnological or anthropological
point of view
43. CONSIDERATION OF HAZARDOUS AND TOXIC
SUBSTANCES IN VALUATION
• Hazardous Substance – any material within, around, or near the
property being valued that has sufficient form, quantity and bio-
availability to create a negative impact on the property’s Market
Value
• Toxic – the status of a material, whether gas, liquid, or solid that in its
form, quantity and location at the date of valuation has capacity to
cause harm to life-forms. Toxicity refers to the degree or extent of
such capacity.
44. VALUATION OF TRADE RELATED PROPERTIES
TRPs – are individual properties that usually change
hands I the marketplace while remaining operational.
These assets include not only land and buildings, but
also fixtures and fittings and a business component
made up of intangible assets, including transferable
good will
45. GOOD WILL
• Future economic benefits arising from assets that are
not capable of being individually identified and
separately recognized
a. Personal – value of profit generated over and above
market expectations
b. Transferrable – intangible asset that arises as a result
of property-specific name and reputation, customer
patronage etc.
46. VALUATION FOR COMPULSORY ACQUISITION
BUILD-OPERATE-AND-TRANSFER LAW or RA 6957 as amended by RA
7718
