Understanding and Applying Fair Market Value of Land in Zamboanga del Norte, Philippines
A Comprehensive Legal Guide (2025 Edition)
Abstract
“Fair Market Value” (FMV) is the pivot around which almost every land-related tax, transfer, and litigation in the Philippines turns. For land located in Zamboanga del Norte—Mindanao’s northernmost peninsula province—the concept is shaped by national statutes, provincial ordinances, revenue regulations, and a developing body of jurisprudence that reconciles market realities with constitutional mandates of just compensation and equitable taxation. This article synthesizes all essential rules, institutions, procedures, and practical considerations practitioners and property owners must master in 2025.
I. Introduction
Land values in Zamboanga del Norte are rising on the strength of mining, ecotourism (Dapitan-Dakak corridor), and infrastructure (Mindanao Railway, port expansions). Whether you are computing real property tax, estate tax, capital gains tax, or litigating an expropriation case, the cornerstone figure is Fair Market Value—defined in law yet dependent on periodic local and national valuation exercises.
II. Concept of Fair Market Value under Philippine Law
| Context | Governing Provision | Working Definition |
|---|---|---|
| Local taxation & assessment | Local Government Code (LGC) §§199(l), 198, 212–214 | The price a property can command in an open, undisturbed sale between a willing buyer and willing seller. |
| National internal revenue | National Internal Revenue Code (NIRC) §6(E) | For tax base purposes, FMV is the higher of (a) BIR zonal value, (b) LGC schedule, or (c) actual consideration. |
| Expropriation | Const. art. III §9; Rule 67 Rules of Court | “Just compensation” is the FMV at the time of taking, considering location, shape, size, use, comparables, etc. |
| Agrarian Reform | RA 6657 §17; DAR A.O. 5-1998, A.O. 1-2019 | FMV = (LV = (CNI × 0.6) + (CS × 0.3) + (MV × 0.1)), subject to LBP/DAR valuation and adjudication. |
III. Statutory & Regulatory Framework
Local Government Code of 1991 (RA 7160)
- Mandates every province, city and municipality to:
- prepare a Schedule of Fair Market Values (SMV) for land, buildings, and machinery;
- conduct a general revision at least once every three (3) years (§219).
- FMV feeds into assessed value after applying assessment levels (§218).
- Mandates every province, city and municipality to:
Department of Finance/BLGF issuances
- DOF-BLGF Assessment Regulations No. 1-2005 (Uniform Valuation Standards).
- DOF-DILG JMC 2017-1: step-by-step SMV revision (data capture, consultations, GIS tax mapping).
BIR Revenue Regulations & Orders
- RR 6-2013 (estate & donor’s tax);
- RMO 11-2019 (zonal valuation manual);
- Latest Zonal Values for RDO 096 – Dipolog-Dapitan approved 09 August 2023, effectivity 23 Aug 2023.
Special Laws
- RA 6657 (CARP) & RA 9700 (CARPer) for agricultural lands;
- RA 7586 (NIPAS) and RA 8371 (IPRA) when ancestral domain or protected area overlays affect FMV.
Key Supreme Court Pronouncements
- Republic v. CA & Iglesia ni Cristo (G.R. 92013, 17 Jan 1992) – FMV at time of taking, not filing;
- LBP v. Heirs of Domingo (G.R. 181447, 30 June 2015) – confirms DAR AO 5-1998 formula;
- LBP v. Sps. Abanto (G.R. 203514, 09 Aug 2022) – zonal values not controlling in CARP.
IV. Institutional Actors in Zamboanga del Norte
| Office | Core Function | Contact Points (2025) |
|---|---|---|
| Provincial Assessor, Capitol, Dipolog City | Drafts SMV for all 25 municipalities + 2 component cities; maintains tax maps. | Tel. (065) 908-1234 |
| City Assessors (Dipolog, Dapitan) | City-level SMV and RPT assessment; often ahead in GIS mapping. | Dipolog: (065) 212-3456 |
| Municipal Assessors | Rural SMV; classify agricultural vs residential vs mineral. | e.g., Sindangan, Siocon |
| Sangguniang Panlalawigan | Approves SMV by Ordinance (latest: Ord. No. 2022-08, eff. 1 Jan 2023). | Secretariat: spzn@gmail.com |
| BIR RDO 096 (Dipolog) | Sets zonal values for CGT/DST/estate tax. | Tel. (065) 918-1122 |
| Land Bank of the Philippines – Dipolog Lending Center | Conducts DAR-LBP valuation for CARP lands. | lbpzn@lbp.ph |
| Local & Central Boards of Assessment Appeals (LBAA/CBAA) | Administrative appeal re assessments & FMV. | LBAA c/o Governor’s Office |
V. Procedure for Fixing FMV in Zamboanga del Norte
Data Collection & Market Study
- Actual sales, BIR Certificates Authorizing Registration (CARs), brokers’ listings, court-approved auctions.
- Adjustment factors: access to Dipolog-Sindangan Highway, projected railway stations, mineral deposits (Siocon-Baliguian).
Draft SMV Preparation
- Classified by barangay and land use (residential, commercial, industrial, agricultural, special).
- Three standard valuation approaches: Comparative Sales, Replacement Cost, Income Capitalization.
Public Hearings & Consultations – minimum 3 sessions per §212.
Enactment of Ordinance & Publication – once in a newspaper of general circulation & at barangay halls.
Implementation
- New FMVs take effect 1 January following ordinance unless later date specified.
- Assessor applies assessment levels (e.g., 20% residential, 50% commercial).
Appeal Window – 60 days from receipt of tax notice (LGC §226).
VI. Illustrative Fair Market Values (as of Ord. No. 2022-08, eff. 2023)
Figures below are rounded ranges for orientation only; obtain certified copies for transactions.
| Classification | Dipolog City CBD₁ | Dapitan Tourism Zone | Sindangan Poblacion | Remote Rural Brgy. |
|---|---|---|---|---|
| Residential | ₱3,500–6,000 /sq m | ₱2,800–4,200 | ₱1,000–1,800 | ₱150–350 |
| Commercial | ₱6,500–10,000 | ₱4,000–6,000 | ₱2,000–3,500 | n/a |
| Industrial | ₱2,500–4,000 | ₱2,000–3,000 | ₱1,200–2,000 | n/a |
| Agricultural – Riceland | n/a | n/a | ₱120,000–160,000 /ha | ₱50,000–90,000 |
| Agricultural – Coconut | n/a | n/a | ₱80,000–120,000 | ₱40,000–70,000 |
₁ Central Business District: General Luna St., Quezon Ave., Tamayo Ave.
VII. FMV in Transactions and Litigation
A. Real Property Tax (RPT)
Tax base = Assessed Value = FMV × Assessment Level
Example: Residential lot, FMV ₱4 M (Dipolog), assessment level 20 % ⇒ AV = ₱800 k; RPT = AV × basic rate (1 %) = ₱8 k/yr, plus SEF + idle-land surtax as applicable.
B. Taxes on Transfers & Dispositions
| Tax | Statute | Base | Rate (2025) |
|---|---|---|---|
| Capital Gains Tax | NIRC §24(D) | Higher of SMV or Zonal | 6 % |
| Doc. Stamp | NIRC §196 | Same | 1.5 % |
| Estate/Donor’s | NIRC Title III | FMV at death/donation (higher of SMV/zonal) | 6 % (net) |
C. Expropriation & Right-of-Way
Just compensation determined by court-appointed commissioners guided—but not shackled—by SMV/zonal; courts often adjust for:
- inflation differentials between ordinance date and taking;
- consequential benefits/damages;
- comparables within three-year window.
D. Agrarian Reform Valuation
Compulsory acquisition uses DAR formula (CNI, CS, MV). SMV is the starting “MV” component but can be overridden by productivity data or actual sales. LBP valuations in Siayan and Katipunan have been sustained by DARAB where FMV was outdated.
VIII. How to Challenge or Update a Valuation
Administrative Remedies
- Assessment appeals → LBAA (within 60 days) → CBAA → Court of Tax Appeals (CTA).
- Zonal value protests → BIR Commissioner within 30 days of sale filing; seldom granted absent strong comparables.
Judicial Remedies
- Rule 67 expropriation – contest commissioners’ report; elevate to Court of Appeals/Supreme Court.
- CARP – file before DARAB; judicial review to CA under Rule 43.
Legislative Lobby
- Stakeholders may seek revision of SMV earlier than the triennial cycle by petitioning the Sangguniang Panlalawigan under LGC §219.
IX. Special Valuation Issues Unique to Zamboanga del Norte
- Tourism premium – Dapitan heritage sites and Dakak resort zone command up to 150 % of SMV in open sales; undocumented premiums may expose parties to donor’s-tax assessments.
- Mineral lands – Siocon-Baliguian polymetallic belt; FMV must exclude underground ore value unless permitted by DENR-MGB valuation.
- Ancestral Domain Overlap – Portions of Siocon, Manukan, Rizal are under CADT of the Subanen; transfers require NCIP certification and FMV must factor usufruct restrictions.
- Disaster-risk discounts – Coastal barangays classified as “high-susceptibility to storm surge” (OCD 2024 maps) may lawfully justify lower FMV under LGC §212(c).
- Mindanao Railway Segment 1 – Presidential Proclamation 1247 (2024) reserves ROW; prospective ROW valuations often exceed SMV by 30-40 % after inflation adjustment.
X. Best-Practice Checklist for Practitioners & Owners
- Secure Certified True Copies of the latest SMV ordinance and BIR zonal tables before drafting a Deed of Sale or Extrajudicial Settlement.
- Compare three values—SMV, zonal, actual price—and base taxes on the highest.
- For expropriation: gather at least five post-taking comparables and one professional appraisal to challenge commissioners.
- In CARP cases: document yields (kg/ha), current selling price of output, and capitalized net income to temper formula output.
- Audit clerk computations; miscoding of land class or barangay is common and correctible motu proprio by assessor.
- Calendar the triennial cycle (next full revision due 2026) to lobby for upward or downward adjustments.
XI. Conclusion
Fair Market Value is neither a single number nor an assessor’s whim; it is a composite of statutory commands, local economic data, and jurisprudential guardrails. In Zamboanga del Norte, its successful application demands fluency in both local ordinances and national tax-expropriation rules. Owners who ignore FMV risk over-taxation or undervaluation; counsel who master it unlock strategic leverage in every land transaction and dispute.
Annex A — Key Statutes & Issuances (non-exhaustive)
- Local Government Code, Republic Act No. 7160 (1991)
- National Internal Revenue Code, as amended (2023 codification)
- Department of Finance-BLGF Assessment Regulations No. 1-2005
- DAR Administrative Order No. 5-1998; AO 1-2019
- Department of Finance-DILG Joint Memorandum Circular 2017-1
- BIR Revenue Memorandum Order 11-2019 (Zonal Valuation Manual)
- Province of Zamboanga del Norte Ordinance No. 2022-08 (Schedule of Market Values)
- Dipolog City Ordinance No. 167-2021 (SMV Revision)
- Supreme Court Decisions: Republic v. CA (1992), Land Bank v. Heirs of Domingo (2015), Land Bank v. Abanto (2022)
(For certified copies, inquire with the Provincial Assessor, BLGF Regional Office IX, or BIR RDO 096.)