M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

Question 1

2. Exemption from Real Property Tax – Section 234

Answer 1

Exemption from Real Property Tax for easy memorization:

1. Government property or Public Properties:
   
   • Owned by Republic of Philippines or political subdivisions
   • Exception: If beneficial use granted for consideration or to taxable person
2. Religious, Educational and Charitable property: Doctrine of Use (ADE use)
   
   • Churches, mosques, cemeteries, charitable institutions
   • Land/buildings used exclusively for religious, charitable, or educational purposes
3. Utility equipment:
   
   • Machinery for water districts and GOCCs
   • Used for water supply/distribution or power generation/transmission
4. Real properties of registered Cooperatives:
   
   • Owned by registered cooperatives under RA 6938
5. Environmental equipment:
   
   • Machinery for pollution control and environmental protection

Key points to remember:
- Government ownership (with exception)
- Religious/charitable use
- Utility service equipment
- Registered cooperatives
- Environmental protection equipment

Question 1

1. Fundamental Principles; Nature

LGUS responsible - Provinces, Cities, Municipalities

• Taxable against the beneficial user of the property, need not be the holder of title to be taxable.
• Assessment levels does not use the classification per ZONING - eg. Residential property used for entertainment is taxable as Commercial; so for multiple usage, choose the predominant use
• Annual Tax

Answer 1

Real Property tax is a DIRECT TAX imposed on the PRIVILEGE TO USE REAL PROPERTY such as Building, Land, Machinery and other improvements unless excluded by law

Principles:
1. Real property shall be appraised at its Current FMV
2. Real property shall be classified for assessment purposes on the
basis of its ACTUAL USE;
3. Real property shall be assessed based on a UNIFORM CLASSIFICATION within each LGU;
4. The appraisal, assessment, levy and collection of real property tax
shall NOT be LEFT to any PRIVATE person.
5. The appraisal and assessment of real property shall be equitable.
(Sec. 198, LGC)

a. It is a direct tax on the use of real property.

Note: Real property shall be classified, valued and assessed
on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. (Sec. 217, LGC)

b. It is an ad valorem tax where the tax base is a fixed proportion of
the value of the property.

Question 2

3. Government’s Remedies - on Real Property tax

a. Real Property Tax Assessment
b. Collection

Answer 2

Assessment levels;
It is the percentage applied to the FMV to determine the taxable value of the property. (Sec. 199(g), LGC)

Note: Assessment levels shall be fixed by ordinances of the Sanggunian at rates not exceeding those prescribed ,under Sec. 218 of the LGC.

Collecting authority:
The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies, shall be the responsibility of the city or municipal treasurer concerned. (Sec. 247, LGC)

The city or municipal treasurer may deputize the Barangay treasurer to collect all taxes on real property located in the Barangay.

a) Date of Accrual
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. (Sec. 246, LGC)

b) Periods to Collect
General Rule: Within five (5) years from the date they become due.
Exception: In case there is fraud or intent to evade payment of tax, within ten (10) years from discovery of fraud or intent to evade payment (Sec. 270, LGC)

Question 3

4. Taxpayer’s Remedies - on Real Property Tax

a. Administrative
b. Judicial
c. Refund or Credit

Answer 3

The taxpayer has the following remedies
in real property taxation:
1. Protest against a newly enacted ordinance or revenue measure;
2. Remedy against an assessment;
3. Payment under protest and tax refund or credit;
4. Claim a refund.

Question 4

Assessment Process - Real Property Tax

The procedure is as follows:
1. Pay first and cause the annotation
“paid under protest”;
2. Protest in writing within thirty
(30) davs from payment with the
local treasurer;
3. The treasurer has sixty (60) days
to resolve it; (Sec. 252(a), LGC)
4. In case of denial or lapse of sixty
(60) days, follow the procedure in
questioning an assessment, i.e.:
a. Appeal to the LBAA within sixty
(60) days;
b. Then appeal to the CBAA within
thirty (30) days;
c. Appeal to the CTA En Banc
within thirty (30) days.

Answer 4

1st: Taxpayer pays tax UNDER PROTEST within 30 days from payment to the Local Treasurer

2nd: Local treasurer DENY the protest or INACTION after 60 days, so

3rd: Taxpayer file an appeal with LBAA local board ass auth within 60 days from a) lapse of 60 days within Local Treasurer or (b) the Receipt of denial protest.

4th: Appeal to CBAA within 30 days

5th: Appeal to CTA en Banc