Documente Academic
Documente Profesional
Documente Cultură
PROPERTY
TAXATION
Submitted by:
Airene A. Alagbay
Nelson Bayot
Karl Dapitan
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Real Property Taxes
Direct taxes imposed on the privilege to use real property such as land,
building, machinery and other improvements unless specifically exempted.
1. Ability to Pay
The mere possession of wealth and control of that wealth indicate a
general ability to make a tax contribution.
2. Benefit Theory
In so far as real property tax revenue is used to finance local
government services, the property owner is a direct beneficiary of
the services rendered.
Fundamental Principles
3. The appraisal, assessment, levy and collection of real property tax shall
not be let to any private person;
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Local Government Units that may levy Real Property Tax
1. Province;
2. City; and
3. Municipality within Metro Manila.
Section 232 of the Local Government Code (LGC) provides that a real
property tax is imposed on real property such as land, building,
machinery and other improvement not hereinafter specifically
exempted.
It includes:
1. Realty by Destination
It is a machinery essential to the business.
2. Realty by Incorporation
Machinery permanently attached.
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Rates of the Real Property Tax
In addition to the basic real property tax, special levies may be imposed by the
same local government units on said real property such as:
b. Lands covered:
i. Agricultural lands
More than one (1) hectare in area, suitable for cultivation,
dairying, inland fishery, and other agricultural uses, one-half
(1/2) of which remain uncultivated or unimproved;
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3. Special Levy for Public Works
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Mactan-Cebu International Airport Authority (MCIAA) v. City of Lapu-Lapu and Elena T. Pacaldo, G.R. No. 181756, June 15, 2015.
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G.R. No. 155650, July 20, 2006.
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iii. The declaration must be filed with the assessor once
every three (3) years during the period from January 1
to June 30. (Section 202, LGC).
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3. Appraisal and Valuation of Real Property
a) Land
b) Machinery
Brand new:
The FMV is the acquisition cost. If the machinery is
imported, the acquisition cost includes freight, insurance,
bank and other charges, brokerage, arrastre and handling,
duties and taxes, plus cost of inland transportation,
handling, and installation charges at the present site.
(Section 224, LGC).
Depreciation allowance:
Rate—not exceeding five percent (5%) of its original cost or
replacement cost, for each year of use.
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4. Assessment of real property
No:
“The real property tax for any year shall accrue on the first day of
January and from that date it shall constitute a lien on the
property which shall be superior to any other lien, mortgage, or
encumbrance of any kind whatsoever, and shall be extinguished
only upon the payment of the delinquent tax.” (Section 246,
LGC).
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The notice shall also be published in a newspaper of general
circulation in the locality once a week for two (2) consecutive
weeks. (Section 249, LGC).
Remedies
The basic real property tax shall constitute a lien on the property subject to
tax, superior to all liens, charges or encumbrances in favor of any person,
irrespective of the owner or possessor thereof, enforceable by
administrative or judicial action and may only be extinguished upon
payment of the tax and the related interests and expenses. (Section
257,LGC).
1. Administrative
a) Levy
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Delinquent owner retains possession and right to
the fruits. (Section 261, LGC).
LT returns to the purchaser/bidder the price paid
+ interest of 2% per month. (Section 261, LGC).
If property is not redeemed, the LT shall execute a
deed of conveyance to the purchaser. (Section
262, LGC).
Levy may be repeated until the full amount due,
including all expenses, is collected. (Section 265,
LGC).
NO:
LT shall purchase the property in behalf of the
LGU (Section 263, LGC).
(Note: in cases of levy for unpaid local taxes, LT
may purchase if there is no bidder or if the highest
bid is insufficient - Section 181, LGC).
Registrar of Deeds shall transfer the title of the
forfeited property to the LGU without need of a
court order (Section 263, LGC).
Within 1 year from forfeiture, the owner, may
redeem the property by paying to the local
treasurer the full amount of the tax and the related
interest and the costs of sale otherwise the
ownership shall be vested on the local government
unit concerned. (Section 263, LGC).
Sanggunian concerned may, by ordinance sell and
dispose of the real property acquired under the
preceding section at public auction. (Section
264, LGC).
Levy may be repeated until the full amount due,
including all expenses, is collected. (Section 265,
LGC).
2. Judicial
The LGU may enforce the collection of the real property tax or any
other tax levied by civil action in any court of competent
jurisdiction. (Section 266, LGU).
The action for collection shall be filed within five (5) years from the
date they become due. In case there is fraud or intent to evade
payment, such action be instituted within ten (10) years from
discovery of fraud.
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B. TAXPAYER
1. Administrative
LT grants protest:
YES:
Amount of tax protested shall be refunded or
applied as tax credit. (Section 252, LGC).
Refund or tax credit must be claimed with the
local treasurer w/in 2 years from the date
taxpayer is entitled to such. (Section 253,
LGC).
NO:
Taxpayer may appeal w/in 60 days from
receipt of notice (or expiration of 60 days)
to LBAA. (Section 226, LGC).
LBAA must decide within 120 days from
receipt of appeal (Section 229, LGC).
If LBAA rejects protest/ refund, owner may
appeal to the CBAA within 30 days from
receipt of notice. (Section 229, LGC).
If CBAA rejects protest/refund, owner may
appeal to the CTA En Banc within 30 days
from receipt of decision. (Rule 43, Rules
of Court (ROC).
Appeal to the Supreme Court within in 15
days.
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2. Judicial
Unlike in the case of the NIRC, there is no express provision in the LGC
prohibiting courts from issuing an injunction to restrain local governments
from collecting taxes. However, injunctions enjoining the collection of local
taxes are still frowned upon and court should therefore exercise extreme
caution in issuing such injunctions. And the requirements for the issuance of
a writ of preliminary injunction laid down under section 3 rule 58 of the Rules
of Court are applicable, namely: 1 the existence of a clear and unmistakable
right that must be protected and 2 an urgent and paramount necessity for the
writ to prevent serious damage. (Angeles City vs. Angeles City Electric
Corporation and Regional Trial Court Branch 57, G.R. No. 166134, June 29
2010).
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delinquencies are settled may tax payments be credited for the current
period. (Section 250, LGC).
In case of failure to pay the basic real property tax or any other tax
when due shall subject the taxpayer to the payment of interest at the
rate of two (2%) percent per month on the unpaid amount or a fraction
thereof until the delinquent tax shall have been fully paid. But the total
interest on the unpaid tax shall not exceed thirty-six (36) months.
(Section 255, LGC).
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