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Valuation and the role of assessors

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Valuation and the role of assessors

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The Assessors have an important role in raising the valuation standard to a higher plane. They are at the forefront of the valuation practice in public service. The appraisers in the private sector should work hand in hand with the assessors towards raising the standard of valuation practice.

The Assessors have an important role in raising the valuation standard to a higher plane. They are at the forefront of the valuation practice in public service. The appraisers in the private sector should work hand in hand with the assessors towards raising the standard of valuation practice.

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Valuation and the role of assessors

  1. 1. Valuation and the Role of Assessors By: Augusto B. Agosto AA+ Appraisal & Consultancy,Inc. The concept of land as an economic concept is well settled. Land is one of the forces of production necessary in producing foods, goods and services. The other forces of production like labor, machines are necessary, but it is land that has essential contribution to the production. In the course of appraisal practice, what the appraiser is being valued is the rights, that is the bundle of rights, not the real estate. The bundle of rights which can be transferred, sold and valued for exchange in the market is the most important in valuation. In the freehold ownership for example, what is important to know is the market value of the property and how much it could be sold in an open market. Market value is not determined, it is estimated. More so, it is not created by the valuer, they just uncover the value that is in the property itself. Valuation can be estimated using various methodologies and processes. Real Estate Appraiser and Assessor are major players in the valuation. They should equip on how to factor the different forces that influences value. Also, on how to use the different principles in economics that has direct effect on the market value of the properties. Such economic principles are supply and demand; highest and best use; substitution; anticipation; contribution; competition; increasing and decreasing return; balance; change; conformity; regression; progression and utility have direct impact on the value of the subject. These principles are also included in the Philippine Valuation Standards. PVS also outlines the standards, application and guidance notes necessary in the conduct of valuation of real estate properties and other businesses. In the aspect of supervision, the Department of Finance is the responsible for the supervision of the revenue operations of all local government units. Meanwhile, the Bureau of Local Government Finance (BLGF) have the technical supervision of the assessment operations of all local government units. Assessor also should have a deeper understanding on the Manual on Real Property Assessment and Operations which was crafted by the assessors and BLGF. It is the “bible” of all assessors and serve as guide in the conduct of local assessment administration and defines their functions. Knowledge in
  2. 2. Manual under the new concepts on valuation and guidance of the Philippine Valuation Standards 2018 is a must for assessors. The Manual also outlines the requirement, manner and qualification of an Assessor. It is clearly stated that the Local Chief Executive has the power to appoint the assessor on their locality. However it should possessed the necessary requirements, both in education and experience, as stated in the manual and the Civil Service Commission Resolution on the Qualification of an Assessor and Appraiser. Any person cannot be appointed or designated if he does not possess the minimum requirement therein. This however has been circumvented and not complied with in various local government units by appointing local assessor which do not possess the necessary requirements as stated, which requires a licensed real estate appraiser to be appointed in the position of City or Municipal Assessors. There are cities and municipalities in the country, that has been appointed by the local chief executive as an “OIC” who are not licensed nor have the necessary experience. Under the Manual on Real Property Assessment and Operations, one of the major function of the Assessor is to study the Philippine Valuation Standards in establishing the basis for the appraisal and assessment of properties. The PVS will guide the Assessors in assessment and valuation of properties for taxation purposes and eventually help in the equitable distribution of tax burden to the people. Also, one of the major function of the Assessor is to undertake a general revision of real property assessment every three (3) years. However in reality revision is seldom and always reliant to the budget and command of the local executives. In experience, we still have an Schedule of Market Value which was revalued in 1996. The most important function of an Assessor is to cancel assessment in case of duplication of assessment on one property. Unlike in titling, which give preference to the first registrant of the property, in the assessment the person who has the best title of the property or the person who is in actual possession of the property will be given preference. The Assessors have an important role in raising the valuation standard to a higher plane. They are at the forefront of the valuation practice in public service. The appraisers in the private sector should work hand in hand with the assessors towards raising the standard of valuation practice.#

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