Careful What You Post

We have just received word that the BIR now uses a new source for determining zonal values. They now officially use ads posted on social media and online platforms.

Here’s how it works: When determining zonal values, different parties—the BIR, City Assessor, and two private appraisers—propose different values. These parties then discuss which value to adopt, often averaging the different proposed values.

Why is this problematic?

According to an example shared with me, the BIR simply divides the price by the total lot area, ignoring any improvements on the property. This results in an overstated lot value.

Between actual transaction prices (e.g., values in the eCAR) and selling prices online, the prices in ads are always significantly higher.

As a result, we can expect zonal values to spiral upwards even if actual transaction prices fall below current zonal values. This means less proceeds for sellers due to higher taxes.