Real Property Tax Class Project

Real Property Taxation
REAL PROPERTY TAXES

They are direct taxes imposed on the privilege to use real property
such as land, building, machinery and other improvements, unless
specifically exempted.
NOTE: Real property tax is a fixed proportion of the assessed value of
the property being taxed and requires, therefore, the intervention of
assessors.
It was held in the case of Province of Nueva Ecija vs. Imperial Mining
Co., Inc. GR No. 59643, November 19, 1982 that P.D. 464, the Real
Property Tax Code, changed the basis of real property taxation
adopting the policy of taxing real property on the basis of actual use,
even if the user is not the owner.
The present law on real property taxation (RA 7160, Local

Government Code) adopts actual use of real property as basis of
assessment. (Sec. 199 (b), LGC)
Local Government Units responsible for the administration of

real property tax
1. Provinces
2. Cities
3. Municipalities
Definition of Real Property
Subject to the definition given by the Article 415 of the Civil Code:
Art. 415. The following are immovable property

1. Land, buildings, roads, and constructions of all kinds adhered to
the soil;
2. Trees, plants, and growing fruits, while they are attached to the
land or form an integral part of an immovable;
3. Everything attached to an immovable in a fixed manner, in such

a way that it cannot be separated therefrom without breaking
the material or deterioration of the object;
4. Statutes, reliefs, paintings, or other objects for use or

ornamentation, placed in buildings or on lands by the owner of
the immovable in a such manner that it reveals the intention to
attach them permanently to the tenement;
5. Machinery, receptacles, instruments or implements intended by

the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;
6. Animal houses, pigeon-houses, beehives, fish ponds or breeding

places of similar nature, in case their owner has placed them or
preserves them with the intention to have them permanently
Atty. Geoff Lyn D. San Agustin Page 1

attached to the land, and forming a permanent part of it; the
animals in these places are included;
7. Fertilizer actually used on a piece of land;
8. Mines, quarries, and slag dumps, while the matter thereof forms
part of the bed, and waters either running or stagnant;
9. Docks and structures which, though floating, are intended by

their nature and object to remain at a fixed place on a river, lake
or coast;
10. Contracts for public works, and servitudes and other real
rights over immovable property.
NOTE: An object used indirectly for the general purpose of the
business shall not be treated as real property.
In Mindanao Bus Co. vs. City Assessor of Cagayan de Oro (1997),

Board of Assessment Appeals vs. Meralco, Meralco vs. Board of
Assessment Appeals. The SC has generally held in these cases that
Art. 415 of the Civil Code provide an exclusive enumeration of what
constitutes real property. For tax purposes, however, it is common for
otherwise personal properties under the Civil Code to be classified as
real property.
NOTE: The NIRC and the LGC prevail in classifying property for tax
purposes.
Definition of Improvement
Improvement is a valuable addition made to a property or an

amelioration in its condition, amounting to more than a mere repair or
replacement of parts involving capital expenditures and labor, which
is intended to enhance its value, beauty or utility or to adapt it for
new or further purposes. (Sec 199(m), LGC).
Requisites for taxability of an improvement
1. Must enhance the value of the property

2. Must be separately assessable
3. Can be treated independently from the main property
NOTE: Whenever real property has been divided into condominium,

each condominium owned shall be separately assessed, for purposes
of real property taxation and other tax purposes to the owner thereof
and tax on each such condominium shall constitute a lien solely
thereof. (Sec 25, RA No. 776, Condominium Act)
Personal properties defined under the Civil Code are considered

as real property for purposes of RPT
Properties considered as personal under the Civil Code may

nonetheless be considered as real property for tax purposes where
said property is essential to the conduct of business. The property to
be considered as immobilized for RPT must be essential and principal
element of an industry without which such industry would be unable

to carry on the principal industrial purpose for which it was
established. (DOCTRINE OF ESSENTIALITY)
Theory of Real Property Taxes

While most taxes fall into the ability to pay category and certain taxes
result from expediency, real property taxes combine both the ability to
pay theory and the benefit theory of taxation.
1. Ability to pay theory: The mere possession of wealth and
control of that wealth indicate a general ability to make tax
contribution.
2. Benefit theory: Tax revenue is used to finance local

government services, and the property owner is a direct
beneficiary of the services rendered.
I. INTRODUCTION
NATURE OF REAL PROPERTY TAX
1. Direct tax whose burden could not be shifted by the one who
pays to other persons;
2. Indivisible single obligation;
3. Ad valorem tax based on the assessed value of the property;
4. Local tax;
5. Imposed on the use and not on the ownership;
6. Progressive/proportionate in character depending, to a certain
extent on the used and value of the property.
The real property tax is a tax on property. It has been considered as a
national, not local, tax. It is enforces throughout the Philippines and
not merely in a particular municipality or city, but the proceeds accrue
to the province, city, municipality and barrio where the realty taxed is
situated (Sec. 86, PD 464).
The real property tax for any year shall attach and become due and
payable on the first day of January and the said basic and any other
tax levied under the title on real property taxation shall, from the date
of accrual, constitute a lien upon the property subject to such tax.
Said lien shall be superior to all other liens, mortgages, or property,
by administrative or judicial action, whether in possession of the
delinquent or any subsequent owner or possessor, and shall be
removable only by the payment of delinquent taxes and the related
interest and expenses (Sec. 246, LGC).
Real property taxes may, in the discretion of the taxpayer, be paid
without penalty in four equal installments, the first installment due
and payable on or before March 31; the second installment, on or
before June 30; the third installment, on or before September 30; and
the fourth installment, on or before December 31, except the special
levies which shall be governed by the local ordinance imposing the
levy. Payments of real property taxes shall first be applied to prior
year delinquencies, interests, and penalties, if any, and only after said
delinquencies are settled may tax payments be credited to the current
period (Sec. 250, LGC).

TYPES OF REAL PROPERTY TAX
1. Annual ad valorem tax that is levied by a province, city or
municipality within Metro Manila on real property not
specifically exempted, at the following uniform rates:
a. Provinces not exceeding one percent (1%) of the
assessed value;
b. Cities and municipalities in Metro Manila not more than
2% of the assessed value (Sec. 235, LGC)
2. 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:
a. Additional one percent (1%) tax for the Special Education
Fund;
b. Additional five percent (5%) tax on idle lands (Regardless
of land area, this section shall apply to residential lots in
subdivisions duly approved by proper authorities,
ownership of which has been transferred to individual
owners, who shall be liable for additional tax; and
c. Special levy or assessment that may be imposed by
provinces, cities or municipalities, including those outside
Metro Manila, on property benefitted by certain
infrastructure developments by the government, not
exceeding 60% of the actual cost. The special levy shall
not apply to lands exempt from basic real property tax and
the remainder of the land portions donated to the local
government unit concerned for the construction of such
projects.
(Secs. 232, 233, 235-237, LGC)
REAL PROPERTY SUBJECT TO TAX

The real property tax is imposed on real property such as land,
buildings, machinery and other improvements not specifically
exempted under the Code (Sec. 232, LGC)

Summary of Rules on Machinery
1. If permanently attached subject to RPT
2. If not permanently attached:
a. Essential and principal element of an industry without
which such industry, work or activity cannot function
subject to RPT
b. Not an essential and principal element of an industry,
work or activity not subject to RPT
FUNDAMENTAL PRINCIPLES
SECTION 198. Fundamental Principles. - The appraisal, assessment,
levy and collection of real property tax shall be guided by the following
fundamental principles:
(a) Real property shall be appraised at its current and fair market value;
(b) Real property shall be classified for assessment purposes on the
basis of its actual use;
(c) Real property shall be assessed on the basis of a uniform
classification within each local government unit;
(d) The appraisal, assessment, levy and collection of real property tax
shall not be let to any private person; and
(e) The appraisal and assessment of real property shall be equitable.
ARTICLE 289. Fundamental Principles. The appraisal, assessment,

levy, and collection of real property tax shall be governed by the following
fundamental principles: (a) Real property shall be appraised at its current
and fair market value; (b) Real property shall be classified for assessment
purposes on the basis of its actual use; (c) Real property shall be assessed
on the basis of a uniform classification within each LGU;
The appraisal, assessment, levy and collection of real property for

taxation purposes shall be guided by the following fundamental
principles:
1. Real property shall be appraised at its current and fair market
value;
2. Real property shall be classified for assessment purposes on the
basis of its actual use;
3. Real property shall be assessed on the basis of a uniform
classification within each local political subdivision;
4. The appraisal, assessment and levy of real property for taxation
purposes and the collection of the real property tax shall not be
let to any private persons; and
5. The appraisal and assessment of real property shall be
equitable.
(Sec. 198, LGC)
*Fair market value is the amount which a purchaser willing
but not compelled to buy would pay an owner of the property, and the
latter willing but not compelled to sell would accept as the
consideration or price therefor (Sec. 199, LGC).
The basis of real property taxation under the Assessment Law was
ownership or interest tantamount to ownership. The Real property
Tax Code changed the basis of real property taxation and adopted the
policy of taxing real property on the basis of actual use, even if the

user is not the owner. This policy is still followed in the Local
Government Code.
*Actual use refers to the principal and predominant utilization
of the property by the person in possession thereof pursuant to
Section 199 (b) of the Code.
In appraising the current and fair market value of the property, the
criterion is that which is prevailing in the locality where the property
is situated (Sec. 201, LGC). However, in preparing a general schedule
of value for a province or city and in determining the classes of
property for assessment levels, 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 (Secs. 217 and 212,
LGC)

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POWER TO LEVY REAL PROPERTY TAX

SECTION 232. Power to Levy Real Property Tax. - A province or city
or a municipality within the Metropolitan Manila Area may levy an annual
ad valorem tax on real property such as land, building, machinery, and
other improvement not hereinafter specifically exempted.
ARTICLE 323. Power to Levy Real Property Tax. Provinces and

cities, and municipalities within MMA, through their respective
sanggunians, may levy the annual ad valorem tax on real property such as
Extent of Taxing Powers: They do not only have the power to levy
real estate taxes but they may also fix real estate tax rates. (LGC, Sec.
232)
No public hearing shall be required before the enactment of local tax
ordinance levying the basic real property tax (IRR of LGC, Art. 324) in
comparison with local business tax ordinance which requires public
hearing (LGC, Sec. 187)
While Local Government unit is authorized under several laws to
collect real estate tax on properties falling under its territorial
jurisdiction, it is imperative to first show that these properties are
unquestionably within its geographical boundaries. (Sta Lucia Realty
and Development Inc. v City of Pasig, GR No. 166838, June 15, 2011)
Local government unit may refrain from imposing the real
property tax
The use of the words may levy and collect gives the impression
that a province, city or municipality within MMA, may or may not, at
its discretion impose real property tax. The word may in the law
generally interpreted as only permissive or discretionary and operates
to confer discretion, in contrast to the word shall which is
imperative and operates to impose a duty which may be enforced.
This is also being consistent as well with local autonomy which is the
hallmark of the LGC itself.

NOTE: Recourse may be taken to Sec. 5 of the Code itself which
provides for the rules of its interpretation, and in part read as follows:
Any provision on a power of a local government unit shall be liberally
construed in its favor, and in case of doubt, any question thereon shall
be resolved in favor of devolution of powers and of the local
government unit. Any fair and reasonable doubt as to the existence of
the power shall be interpreted in favor of the local government unit
concerned.
Real properties subject to tax
1. For Basic Real Property Tax and Special Levy on
Education Fund:
a. Land
b. Building
c. Machinery d. Other improvements (Sec. 232, GC)
2 For Special Levy on Idle Lands and Special Levy on Public
Works (Special Assessments):
a. Land only Rates of levy
b. In the case of a province- at the rate not exceeding 1%
of the assessed value of
c. real property; and
d. In the case of a city or a municipality within the Metro
Manila area- at the rate not exceeding 2% of the
assessed value of real property. (Sec. 233, LGC)
Ordinance imposing special levy for public works must contain

the following
1. The ordinance shall
a. Describe the nature, extent, and location of the project

b. State estimated cost;
c. Specify metes and bounds by monuments and lines
2. It must state the number of annual installments, not less than

5 years nor more than 10 years.
NOTE: In the apportionment of special levy, Sanggunian may fix

different rates depending whether such land is more or less benefited
by the proposed work
3. Notice to the owners and public hearing (Sec. 242, LGC)
4. Owner can appeal to the LBAA and CBAA
Special levy or special assessment by LGUs
A province, city or municipality may impose a special levy on the

lands within its territorial jurisdiction specially benefited by public
works projects or improvements by the LGU concerned.
EXCEPTION: It shall not apply to lands exempt from basic real

property tax and the remainder of the land, portions of which have

been donated to the LGU concerned for the construction of such
projects or improvements. (Sec. 240, LGC)
NOTE: The special levy shall not exceed 60% of the actual cost of
such projects and improvements, including the costs of acquiring
land and such other real property in connection therewith.
Additional levy on real property for the Special Education Fund
A province, city or a municipality within the Metro Manila area may

levy and collect an annual tax of one percent (1%) on the assessed
value of real property which shall be in addition to the basic real
property tax. The proceeds thereof shall exclusively accrue to the
Special Education Fund created under R.A. 5447. (Sec. 235, LGC)
Additional ad valorem tax on idle lands
A province or city or a municipality within the Metro Manila area may

levy an annual tax on idle lands at the rate not exceeding five percent
(5%) of the assessed value of the property which shall be in addition
to the basic real property tax (Sec. 236, LGC) The following are
considered idle lands
1. Agricultural lands:
a. more than one (1) hectare in area
b. suitable for cultivation, dairying, inland fishery, and other
agricultural uses
c. one-half (1/2) of which remain uncultivated or unimproved
by the owner or person having legal interest
NOTE: Agricultural lands planted to permanent or perennial crops

with at least fifty (50) trees to a hectare shall not be considered idle
lands. Lands actually used for grazing purposes shall likewise not be
considered idle lands.
2. Lands other than agricultural:
a. Located in a city or municipality

b. More than one thousand (1,000) square meters in area
c. One-half (1/2) of which remain unutilized or unimproved
by the owner or person having legal interest.
Regardless of land area, this Section shall apply to residential lots in

subdivisions duly approved by proper authorities, the ownership of
which has been transferred to individual owners, who shall be liable
for the additional tax: Provided, however, That individual lots of such
subdivisions, ownership of which has not been transferred to the
buyer shall be considered as part of the subdivision, and shall be
subject to the additional tax payable by subdivision owner or
operator. (Sec. 237, LGC)
Causes for exemption from idle lands tax
1. Force majeure
2. Civil disturbance
3. Natural calamity

4. Any cause or circumstance which physically or legally prevents
the owner or person having legal interest from improving,
utilizing or cultivating the same.
Purpose of imposing ad valorem taxes on idle land
To penalize property owners who do not use their property

productively. It is also designed to encourage utilization of land
resources in order to contribute to national development.
Not all local government units may impose an annual realty tax in
addition to the basic real property tax on idle or vacant lots located in
residential subdivisions within their respective territorial
jurisdictions. Only provinces, cities, and municipalities within the
Metro Manila area (Sec. 232, Local Government Code) may impose an
ad valorem tax not exceeding five percent (5%) of the assessed value
(Sec. 236, Ibid.) of idle or vacant residential lots in a subdivision, duly
approved by proper authorities regardless of area. (Sec.237, Ibid.)
EXEMPTION FROM REAL PROPERTY TAXES
SECTION 234. Exemptions from Real Property Tax. - The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person;
(b) Charitable institutions, churches, parsonages or convents
appurtenant thereto, mosques, nonprofit or religious cemeteries and
all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or
-controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as provided
for under R. A. No. 6938; and
(e) Machinery and equipment used for pollution control and
environmental protection. Except as provided herein, any exemption
from payment of real property tax previously granted to, or presently
enjoyed by, all persons, whether natural or juridical, including all
government-owned or -controlled corporations are hereby
ARTICLE 325. Exemption from Payment of Real Property Tax. The

following are exempted from payment of the real property tax: (a) All real
property owned by the Republic of the Philippines or any of its political
subdivisions, except when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person; (b) Charitable institutions,
churches, parsonages, or convents appurtenant thereto, mosques, nonprofit
or religious cemeteries and all lands, buildings, and improvements actually,
directly, and exclusively used for religious, charitable or educational
purposes; (c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and GOCCs engaged in the supply
and distribution of water and/or generation and transmission of electric
power; (d) All real property owned by duly registered cooperatives as
provided in RA 6938; and (e) Machinery and equipment exclusively used
for pollution control and environmental protection. Except as provided in

Under Section 234 of the Local Government Code of the Philippines,

the following five real property tax exemptions are provided:
1. RPT exemption on government real properties

Real property owned by the Republic of the Philippines or any of its
political subdivisions except when the beneficial use thereof has been
granted, for consideration, or otherwise, to a taxable person
Under this, a government owned property used in furtherance of its

governmental functions. However, if the use of such government
owned property is granted to a taxable person, the exemption does
not apply and the property shall be subject to real property tax in the
Philippines.
Pursuant to Sec. 33 of P.D. 1146, GSIS enjoyed tax exemption from

real estate taxes, among other tax burdens, until January 1, 1992
when the LGC took effect and withdrew exemptions from payment of
real estate taxes privileges granted under PD 1146. R.A. 8291
restored in 1997 the tax exempt status of GSIS by reenacting under
its Sec. 39 what was once Sec. 33 of P.D. 1146. If any real estate tax is
due, it is only for the interim period, or from 1992 to 1996, to be
precise. (GSIS v. City Treasurer and City Assessor of the City of
Manila, G.R. No. 186242, Dec. 23, 2009)
While it is true that carriageways and terminal stations are anchored,

at certain points, on public roads, said improvements do not form part
of the public roads since the former are constructed over the latter in
such a way that the flow of vehicular traffic would not be impaired.
The carriageways and terminals serve a function different from the
public roads. The former are part and parcel of the light rail transit
(LRT) system which, unlike the latter, are not open to use by the
general public. The carriageways are accessible only to the LRT
trains, while the terminal stations have been built for the convenience
of LRTA itself and its customers who pay the required fare. Even
granting that the national government owns the carriageways and
terminal stations, the property is not exempt because their beneficial
use has been granted to LRTA which is a taxable entity. (LRTA v.
CBAA, G.R. No. 127316, Oct. 12, 2000)
2. RPT exemptions on religious, charitable and educational

institutions
Charitatable institutions, churches, parsonages or convents
appurtenant thereto, mosques, non-profit or religious cemeteries and
all lands, buildings and improvements actually, directly, and
exclusively used for religious, charitable, or educational purposes.
In here, the exemption is strictly applicable to properties actually,

directly, and exclusively used for religious operations, or charitable
operations, or educational purposes. Ownership in itself does not
count, but rather, the fact of actual, direct, and exclusive use of such
owned property.

NOTE: The tax exemption herein rest on the premise that they are
actually, directly and exclusively used by said entities or institutions
for their stated purposes and not necessarily because they are owned
by religious, charitable or educational institutions.
3. RPT exemptions on Local water utilities machinery and

equipment
All machineries and equipment that are actually, directly, and
exclusively used by local water districts, and government owned or
controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power.
4. RPT Exemptions of cooperatives

All real property owned by duly registered cooperatives as provided
under Republic Act No. 6938. Under the concept of
cooperatives, involvement of the ground level members of society is
being encouraged for forge an alliance towards mutual benefits. The
Cooperative Code of the Philippines provides a number of tax
exemptions on such cooperatives and included among which is that of
real property taxes in the Philippines.
5. RPT exemptions for pollution and environmental

protection
Machinery and equipment used for for pollution control and
environmental protection.
Under Section 206 of the Local Government Code of the Philippines, a

taxpayer who claims exemption from real property taxation in the
Philippines shall file with the local government sufficient documentary
evidence in support and as proof of such exemption within thirty (30)
days from date of declaration of such property.
NOTE: Pollution control and infrastructure devices refers to

infrastructure, machinery, equipment and/or improvements used for
impounding, treating or neutralizing, precipitating, filtering,
conveying and cleansing mine industrial waste and tailings as well as
eliminating or reducing hazardous effects of solid particles, chemicals,
liquids or other harmful by products and gases emitted from any
facility utilized in mining operations for their disposal (R.A.No. 7942,
Sec. 3,am) Except as herein provided, any exemption from payment of
real property tax previously granted to, or presently enjoyed by all
persons, whether natural or juridical, including all government owned
or controlled corporations, are hereby withdrawn upon the effectivity
of the LGC.
NOTE: A taxpayer claiming exemption must submit sufficient

documentary evidence to the local assessor within thirty (30) days
from the date of the declaration of real property; otherwise, it shall be
listed as taxable in the Assessment Roll (Sec. 206, LGC).
Under Sec. 234(c) of the LGC of 1991, machineries and equipment

actually, directly and exclusively used by a government-owned or
controlled corporation are exempt from real property tax. BPPC, not
being a GOCC, is not entitled to the Sec. 234(c) exemption. Napocor,
not being the actual, direct and exclusive user of the machineries and

equipment, cannot invoke the Sec. 234(c) exemption either (National
Power Corp. v. CBAA, G.R. No. 171470, January 30, 2009).
RCPIs radio relay station tower, radio station building, and machinery
shed are real properties and are thus subject to real property tax. The
in lieu of all taxes clause in Section 14 of R.A. 2036, as amended by
R.A. 4054, cannot exempt RCPI from the real estate tax because the
same Section 14 expressly states that RCPI shall pay the same taxes
on real estate, buildings. Subsequent legislations have radically
amended the in lieu of all taxes clause in franchises of public
utilities. The Local Government Code of 1991 withdrew all the tax
exemptions existing at the time of its passage including that of
RCPIs with respect to local taxes like the real property tax. Also,
R.A. 7716 abolished the franchise tax on telecommunications
companies effective 1 January 1996. To replace the franchise tax, R.A.
7716 imposed a 10 percent value-added-tax on telecommunications
companies under Sec.102, NIRC. Lastly, it is an elementary rule in
taxation that exemptions are strictly construed against the taxpayer
and liberally in favor of the taxing authority. It is the taxpayers duty
to justify the exemption by words too plain to be mistaken and too
categorical to be misinterpreted.(Radio Communications of the
Philippines, Inc. v. Provincial Assessor of South Cotabato, A.C.
No. 5637,April 13, 2005)
RATES OF LEVY
SECTION 233. Rates of Levy. - A province or city or a municipality

within the Metropolitan Manila Area shall fix a uniform rate of basic real
property tax applicable to their respective localities as follows:
(a) In the case of a province, at the rate not exceeding one percent (1%)
of the assessed value of real property; and
(b) In the case of a city or a municipality within the Metropolitan Manila
Area, at the rate not exceeding two percent (2%) of the assessed
value of real property.
ARTICLE 324. Rates of Levy. A province or a city, or a municipality

within MMA shall fix a uniform rate of basic real property tax applicable in
their respective jurisdictions as follows: (a) For provinces: not exceeding
one per cent (1%) of the assessed value; (b) For cities or for municipalities
within MMA: not exceeding two percent (2%) of the assessed value. No
A province or city or a municipality within the Metropolitan Manila

Area shall fix a uniform rate of basic real property tax applicable to
their respective localities as follows:
a. In the case of a province, at the rate not exceeding one percent

(1%) of the assessed value of real property; and
b. In the case of a city or a municipality within the Metropolitan

Manila Area, at the rate not exceeding two percent (2%) of the
assessed value of real property.

No public hearing shall be required before the enactment of a local
tax ordinance levying the basic real property tax.

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TAXlocal """
Fundamental principles of appraisal, assessment, levy and colle

ction of real property taxes
The appraisal, assessment, levy and collection of real property
tax shall be guided by the following
fundamental principles: (CAULE)
Real property shall be appraised at its Current and fair market

value;
Real property shall be classified for
assessment purposes on the basis of its Actual use;
Real property shall be assessed on the basis of
a Uniform classification within each local government unit;
The appraisal, assessment, levy and collection of
real property tax shall not be Let to any private person; and
The appraisal and assessment of real property shall be Equitab
le. (Sec. 198, LGC)
Real Property shall be classified, valued and assessed on the basis of i
ts actual use regardless
of where located, whoever owns it and whoever uses it. (Sec. 247, LG
C)
Steps in the assessment and collection of real property tax
1. Declaration of real property.
2. Listing of real property in the assessment rolls.
3. Appraisal and valuation of real property.
4. Determination of assessed value and RPT.
5. Payment and collection of tax.
Limitations of local government to administer, appraise, levy an
d collect real property taxes
1. Authorization Limitation - the Local Government Code
authorizes only certain LGUs to administer real property
taxation. (Sec. 200, LGC)
2. Fundamental principles of appraisal, assessment, levy and

collection of real property taxes. (Sec. 198, LGC)
3. The real property taxes collected shall accrue solely to the

benefit of the local government unit concerned. (Sec. 5, Art. X,
1987 Constitution)
RULE ON APPRAISAL OF REAL PROPERT AT FAIR MARKET

VALUE

SECTION 201. Appraisal of Real Property. - All real property, whether

taxable or exempt, shall be appraised at the current and fair market value
prevailing in the locality where the property is situated. The Department of
Finance shall promulgate the necessary rules and regulations for the
classification, appraisal, and assessment of real property pursuant to the
provisions of this Code.
ARTICLE 292. Appraisal of Real Property. Within sixty (60) days
from the effectivity of these Rules, DOF shall promulgate rules and
All real property, whether taxable or exempt, shall be appraised at the

CURRENT AND FAIR MARKET VALUE prevailing in the locality where
the property is situated. (Sec. 201, LGC)
Definition of fair market value of properties
Fair market value (FMV) is the price at which a property may
be sold by a seller who is not compelled to sell and bought by a
buyer who is not compelled to buy. (Sec. 199(I), LGC)
Definition of assessed value
Assessed value is the fair market value of the real property
multiplied by the assessment level. It is synonymous to taxable value
(Sec.199(h), LGC)
Fair market value v. Assessed value
FAIR MARKET VALUE ASSESSED VALUE
Determined by the
Declared by the owner
application of the
As to determin subject to final
assessment level to the
ation determination by the
FMV. It is synonymous
assessor.
to the taxable value.
Supposed to be the Merely a percentage of
actual value of the real the FMV depending on
As to basis
property in the open the assessment level of
market. the property in question.
Approaches in estimating the fair market value of real

property for RPT purposes
1. Sales analysis approach The sales price paid in actual
market transactions is considered by taking into account
valid sales data accumulated from among the Register of
Deeds, notaries public, appraisers, brokers, dealers, bank
officials, and various sources stated under the Local
Government Code;
2. Income capitalization approach The value of an

incomeproducing property is no more than the income
derived from it. An analysis of the income produced is
necessary in order to estimate the sum which might be
invested in the purchase of the property.

3. Reproduction cost approach a formal approach used

exclusively in appraising manmade improvements such as
buildings and other structures, based on such data as
materials and labor costs to reproduce a new replica of
the improvement. (Allied Banking Corporation, et. al., vs.
Quezon City Government, G.R. No. 154126, Oct. 11, 2005)
Steps in determination of Fair market value (FMV)
a. Assessor of the province/city or municipality may summon
the owners of the properties to be affected and may take
depositions concerning the property, its ownership, amount,
nature and value (Sec. 213, LGC)
b. Assessor prepares a schedule of FMV for different classes of

properties.
c. The schedule of FMV is published in a newspaper of

general circulation in the province, city or municipality
concerned or in the absence thereof, shall be posted in the
provincial Capitol, city or municipal hall and in two other
conspicuous public places therein (Sec. 212, LGC)
d. General revision of property assessment is made (Sec. 219,

LGC)
e. Sanggunian enacts a real property tax ordinance.

Step 1. DECLARATION OF REAL PROPERTY
Section 202. Declaration of real Property by the Owner or
Administrator. - It shall be the duty of all persons, natural or juridical,
owning or administering real property, including the improvements therein,
within a city or municipality, or their duly authorized representative, to
prepare, or cause to be prepared, and file with the provincial, city or
municipal assessor, a sworn statement declaring the true value of their
property, whether previously declared or undeclared, taxable or exempt,
which shall be the current and fair market value of the property, as
determined by the declarant. Such declaration shall contain a description
of the property sufficient in detail to enable the assessor or his deputy to
identify the same for assessment purposes. The sworn declaration of real
property herein referred to shall be filed with the assessor concerned once
every three (3) years during the period from January first (1st) to June
thirtieth (30th) commencing with the calendar year 1992.
ARTICLE 293. Declaration of Real Property by the Owner or
Administrator.
(a) All persons, natural or judicial, or their duly authorized representatives,
owning or administering real property, including improvements thereon,
within a city or a municipality, shall prepare or cause to be prepared, and
file with the provincial, city, or municipal assessor, a sworn statement
declaring the true value of their property or properties, whether previously
declared or undeclared, taxable or exempt, which shall be the current and
fair market value of the property as determined by the declarant. (b) Such
declaration shall contain a description of the property sufficient in detail to

Declaration by Owner or Administrator: All persons, natural or
juridical, owning or administering real property, including the
improvements therein, are required to prepare and file:
Form Sworn Statement
Once every three (3) years during the
Period
period from January 1 to June 30
Agency Provincial/City/Municipal Assessor
Contents of the sworn declaration:

a. True value (current/fair market value) of their property whether
previously declared or not , taxable or exempt; and
b. Description of the property sufficient in detail for assessment

purpose.
Section 203. Duty of Person Acquiring Real Property or Making

Improvement Thereon. - It shall also be the duty of any person, or his
authorized representative, acquiring at any time real property in any
municipality or city or making any improvement on real property, to
prepare, or cause to be prepared, and file with the provincial, city or
municipal assessor, a sworn statement declaring the true value of subject
ARTICLE 294. Duty of Persons Acquiring Real Property or Making

Improvement Thereon. (a) All persons, natural or juridical, or their
duly authorized representatives, who acquire at any time a parcel or
parcels of land in any city or municipality, shall file with the provincial, city,
or municipal assessor of the locality where the property is located, a sworn
statement declaring the true value of subject property within sixty (60)
days after the acquisition of such property as evidenced by a duly notarized
or final deed of conveyance executed between the contracting parties
bearing proof of registration from the registrar of deeds concerned. The
sixty-day period shall commence on the date of execution of the deed of
conveyance. (b) In the case of houses, buildings, or other improvements
acquired or newly constructed which will require building permits,
property owners or their authorized representatives shall likewise file a
sworn declaration of the true value of the subject house, building, or other
improvement within sixty (60) days after: (1) The date of a duly notarized
final deed of sale, contract, or other deed of conveyance covering the
subject property executed between the contracting parties; (2) The date of
completion or occupancy of the newly constructed building, house, or
improvement whichever comes earlier; and (3) The date of completion or
occupancy of any expansion, renovation, or additional structures or
improvements made upon any existing building, house, or other real
property, whichever comes earlier. (c) In the case of machinery, the sixty-
day period for filing the required sworn declaration of property values shall
For newly acquired property or improvement on real property, sworn

statement must be filed within 60 days after acquisition or upon
completion or occupancy of the improvement, whichever comes
earlier.
Purpose of declaration: A tax declaration only enables the assessor

to identify the property for purposes of determining the assessment
levels. It does not bind the assessor when he makes his assessment.
(DOMONDON, Vol. V, page 327)

A tax declaration does not prove ownership. It is merely an indicium
of a claim of ownership Read: De Vera-Cruz vs. Miguel, GR No.
144103, August 31, 2005. However, real property tax declarations
are good indicia of possession in the concept of an owner for no one in
his right mind would be paying taxes for a property that is not in his
actual or constructive possession. Read: Consolidated Rural Bank
(Cagayan Valley) Inc. vs. CA, GR No. 132161, January 17, 2005.
But a tax declaration in the name of a person who has no successional
or administrative rights to a decedents estate is null and void
because real property tax shall be assessed in the name of the person
owning or administering the property in which the tax is levied.
Read: Cenido vs. Apacionado, GR No. 132474, November 19,
1999).
Rule on the declaration of real property by the owner or
administrator
For Newly Acquired For Improvement
Property on Property
Sworn statement containing the fair market
What to file
value and description of the property
File with the assessor File within 60 days
within 60 days from upon completion or
When to file date of transfer occupation
(whichever comes
earlier)
SECTION 222. Assessment of Property Subject to Back Taxes. - Real
property declared for the first time shall be assessed for taxes for the period
during which it would have been liable but in no case for more than ten (10)
years prior to the date of initial assessment: Provided, however, That such
taxes shall be computed on the basis of the applicable schedule of values in
force during the corresponding period. If such taxes are paid on or before
the end of the quarter following the date the notice of assessment was
received by the owner or his representative, no interest for delinquency
shall be imposed thereon; otherwise, such taxes shall be subject to an
interest at the rate of two percent (2%) per month or a fraction thereof from
For properties declared for the first time: Real property shall be
assessed for back taxes for not more than 10 years prior to the date of
initial assessment.
Taxes shall be computed on the basis of applicable schedule of values
in force during the corresponding period.
If such taxes are paid on or before the end of the quarter following the
date
SECTIONthe notice of assessment
208. Notification of was received
Transfer by the
of Real owner,Ownership.
Property no interest-
for
Anydelinquency
person who shall be imposed
shall transfer real thereon; otherwise,totaxes
property ownership shallshall
another be
subject
notify thetoprovincial,
interest at the
city or rate of 2%assessor
municipal per month or a fraction
concerned thereof
within sixty (60)
days from
from the date
the date of such
of the transfer.
receipt of theTheassessment
notification shall
until include the mode
such taxes are
of transfer,
fully paid. the description of the property alienated, the name and address
of the transferee.
ARTICLE 299. Notification of Transfer of Real Property Ownership.

(a) Any person, natural or juridical, who transfers real property ownership
to another shall accordingly notify the provincial, city, or municipal assessor
concerned within sixty (60) days from the date of such transfer, which shall
be determined on the basis of documents required in Article 294 and 295 of
this Rule. (b) The notice of transfer shall include the mode of conveyance,
Atty. Geoff Lyn
description ofD.property
San Agustin
alienated, Page
and 17
the name and address of the
transferee. (c) In addition to the notice of transfer, the previous property
owner shall likewise surrender to the provincial, city or municipal assessor
concerned, the tax declaration covering the subject property in order that
Notice of Transfer of Real Property Ownership: Any person who

transfers real property ownership to another is required to notify the
assessor concerned within 60 days from the date of the transfer. The
notification shall include:
1. Description of the property
2. Name and address of the transferee
Every buyer of real property must make a new declaration thereof.
Failure to do so shall make the assessment in the name of the
previous owner binding. A landowner is supposed to know that he has
land taxes to pay. Read: Tajonera vs. CA, GR No. L-26677, March
27, 1981).
SECTION 209. Duty of Registrar of Deeds to Apprise Assessor of Real
Property Listed in Registry. (a) To ascertain whether or not any real
property entered in the Registry of Property has escaped discovery and
listing for the purpose of taxation, the Registrar of Deeds shall prepare and
submit to the provincial, city or municipal assessor, within six (6) months
from the date of effectivity of this Code and every year thereafter, an
abstract of his registry, which shall include brief but sufficient description of
the real properties entered therein, present owners, and the dates of their
most recent transfer or alienation accompanied by copies of corresponding
deeds of sale, donation, or partition or other forms of alienation. (b) It shall
also be the duty of the Registrar of Deeds to require every person who shall
present for registration a document of transfer, alienation, or encumbrance
of real property to accompany the same with a certificate to the effect that
ARTICLE 300. Duty of Registrar of Deeds to Apprise Local Assessor
of Real Property Listed in Registry. (a) Within six (6) months from the
date of effectivity of the Code, and on or before June 30th of every year
thereafter, the registrar of deeds shall prepare and submit to the provincial,
city, or municipal assessor concerned the abstract of his Registry of
Property which include a brief but sufficient description of the real property
entered therein, their present owners, and the date of their most recent
transfer or alienation accompanied by copies of corresponding deeds of sale,
donation, or partition or other forms of alienation. (b) Before any document
of transfer, alienation, or encumbrance of real property may be registered,
the registrar of deeds shall require the presentation of a certificate or
clearance issued by the local treasurer concerned to the effect that all
current year and past year basic and additional special education fund, real
property taxes, and the tax on transfer of real property ownership in Rule
XXX of these Rules, due on the subject property, have been paid in full
including interests or penalties due thereon. Failure to provide such
certificate shall be a valid cause for the registrar of deeds to refuse the
registration of the document. In the absence of such certification or tax

Duty of the Register of Deeds before entering the real property
in the registry: It is to require every person who shall present for
registration a document of transfer, alienation, or encumbrance of
real property to accompany the same with a certificate to the effect
that the real property subject of the transfer, alienation, or
encumbrance, as the case may be, has been fully paid of all real
property taxes due thereon.
Failure to provide such certificate shall be a valid cause for the
Registrar of Deeds to refuse the registration of the document.
Section 204. Declaration of Real Property by the Assessor. - When any
person, natural or juridical, by whom real property is required to be
declared under Section 202 hereof, refuses or fails for any reason to make
such declaration within the time prescribed, the provincial, city or municipal
assessor shall himself declare the property in the name of the defaulting
owner, if known, or against an unknown owner, as the case may be, and
shall assess the property for taxation in accordance with the provision of
this Title. No oath shall be required of a declaration thus made by the
ARTICLE 295. Declaration of Real Property by the Local Assessor.
(a) The local assessor shall declare only real property previously
undeclared from taxation purposes. (b) In the case of real property
discovered whose owner or owners are unknown, the provincial, city, or
municipal assessor shall likewise declare the same in the name of the
Unknown Owner, copy furnished the provincial assessor in the case of
declarations made by a component city or municipal assessor, until such
time that a person, natural or juridical, comes forth and files the sworn
declaration of property values required under either Article 294 or 295 of
Declaration by Provincial/City/Municipal Assessor: When a

person required under Section 202 of the LGSC refuses or fails to
make a declaration within the time prescribed, the provincial, city or
municipal assessor shall himself declare the property in the name of
the defaulting owner, if known or against the unknown owner.
NOTE: No oath by the assessor is required. This is because all real
property, whether taxable or exempt, shall be appraised at its current
fair market value.
Step 2. LISTING OF REAL PROPERTY IN THE ASSESSMENT
ROLLS
SECTION 205. Listing of Real Property in the Assessment Rolls. -

(a) In every province and city, including the municipalities within the
Metropolitan Manila Area, there shall be prepared and maintained by the
provincial, city or municipal assessor an assessment roll wherein shall be
listed all real property, whether taxable or exempt, located within the
territorial jurisdiction of the local government unit concerned. Real
property shall be listed, valued and assessed in the name of the owner or
administrator, or anyone having legal interest in the property. (b) The
undivided real property of a deceased person may be listed, valued and
assessed in the name of the estate or of the heirs and devisees without
designating them individually; and undivided real property other than that
owned by a deceased may be listed, valued and assessed in the name of
one or more co-owners: Provided, however, That such heir, devisee, or co-
owner shall be liable severally and proportionately for all obligations
imposed by this Title and the payment of the real property tax with
respect to the undivided property. (c) The real property of a corporation,
Atty. Geoff Lyn or
partnership, D. association
San Agustinshall be listed,
Page 19valued and in the same manner
ARTICLE 296. Listing of Real Property in the Assessment Rolls. (a)

In every province and city, including the municipalities within MMA, there
shall be prepared and maintained by the provincial, city, or municipal
assessor an assessment roll wherein all real property, whether taxable or
exempt, located within the territorial jurisdiction of the LGU concerned
shall be listed. Real property shall be listed, valued, and assessed in the
name of the owner or administrator, or anyone having legal interest in the
property. (b) The undivided real property of a deceased person may be
listed, valued, and assessed in the name of the estate or of the heirs and
devisees without designating them individually; and undivided real property
other than that owned by a deceased may be listed, valued, and assessed in
the name of one or more co-owners provided, however, that such heir,
devisee, or co-owner shall be liable severally and proportionately for all
obligations imposed by this Rule and the payment of the real property tax
with respect to the undivided property. (c) The real property of a
corporation, partnership, or association shall be listed, valued, and
assessed in the same manner as that of an individual. (d) Real property

Definition of Assessment Roll
It is a listing of all real property, whether taxable or exempt, located
within the territorial jurisdiction of the local government unit
concerned prepared and maintained by the provincial, city or
municipal assessor.
The local assessor must maintain an assessment roll wherein all real
property, whether taxable or exempt, located within the territorial
jurisdiction of the local government unit, is listed.
General Rule: Real property shall be listed, valued and assessed in
the name of the owner or administrator, or anyone having legal
interest in the property.
Exceptions:
1. Undivided real property: may be in the name of the estate or
of the heirs and devisees (in case property of a deceased
person) without designating them individually;
2. Undivided real property other than that owned by a
deceased: in the name of one or more co-owners;
3. Real property owned by the Republic of the Philippines,
its instrumentalities and political subdivisions, if the
beneficial use has been granted to a taxable person: in the
name of the possessor, grantee or of the public entity if such
property has been acquired or held for resale or lease; and
4. Corporation, partnerships and association same as
individuals
A. Proof of Exemption of Real Property to be excluded from

Assessment Rolls
Section 206. Proof of Exemption of Real Property from Taxation. -
Every person by or for whom real property is declared, who shall claim
tax exemption for such property under this Title shall file with the
provincial, city or municipal assessor within thirty (30) days from the date
of the declaration of real property sufficient documentary evidence in
support of such claim including corporate charters, title of ownership,
articles of incorporation, by-laws, contracts, affidavits, certifications and
mortgage deeds, and similar documents.
If the required evidence is not submitted within the period herein
prescribed, the property shall be listed as taxable in the assessment roll.
However, if the property shall be proven to be tax exempt, the same shall
be dropped from the assessment roll.
ARTICLE 297. Proof of Exemption of Real Property from Taxation.
Every person by or for whom real property is declared, who shall claim
tax exemption for such property under this Rule shall file with the
provincial, city, or municipal assessor within thirty (30) days from the date
of the declaration of real property sufficient documentary evidence in
support of such claim including corporate charters, title of ownership,
articles of incorporation, by laws, contracts, affidavits, certifications and
B. Real Property Identification System

SECTION 207. Real Property Identification System. - All declarations
of real property made under the provisions of this Title shall be kept and
filed under a uniform classification system to be established by the
provincial,
Atty. cityD.orSan
Geoff Lyn municipal
Agustinassessor.Page 21
ARTICLE 298. Real Property Identification System. All
declarations of real property made under the provisions of this Rule shall
be kept and filed under a uniform classification system to be established
PREPARATION OF SCHEDULE IN ASSESSMENT ROLLS
Procedure on listing of real property in the assessment roll
1. Listing of all real property whether taxable or exempt within the

jurisdiction of LGU;
2. All declarations shall be kept and filed under a uniform
classification system to be established by the provincial, city or
municipal assessor.
Step 3. APPRAISAL AND VALUATION OF REAL PROPERTY
SECTION 212. Preparation of Schedule of Fair Market Values. -

Before any general revision of property assessment is made pursuant to
the provisions of this Title, there shall be prepared a schedule of fair
market values by the provincial, city and the municipal assessors of the
municipalities within the Metropolitan Manila Area for the different
classes of real property situated in their respective local government units
for enactment by ordinance of the Sanggunian concerned. The schedule of
fair market values shall be published in a newspaper of general
circulation in the province, city or municipality concerned, or in the
absence thereof, shall be posted in the provincial capitol, city or municipal
hall and in two other conspicuous public places therein.
SECTION 213. Authority of Assessor to Take Evidence. - For the

purpose of obtaining information on which to base the market value of any
real property, the assessor of the province, city or municipality or his
deputy may summon the owners of the properties to be affected or
persons having legal interest therein and witnesses, administer oaths, and
take deposition concerning the property, its ownership, amount, nature,
and value.
SECTION 214. Amendment of Schedule of Fair Market Values. - The

ARTICLE 303. Preparation of Schedule of Fair Market Values. (a)
Before any general revision of property assessment is made pursuant to
the provisions of this Rule, there shall be prepared a schedule of fair
market values by the provincial and city assessors, and the municipal
assessors of the municipalities within MMA for the different classes of real
property situated in their respective LGUs for enactment by ordinance of
the sanggunian concerned. The schedule of fair market values shall be
published in a newspaper of general circulation in the province, city, or
municipality concerned, or in the absence thereof, shall be posted in the
provincial capitol, city or municipal hall and in two (2) other conspicuous
public places therein. (b) In the preparation of schedules of fair market
values, the provincial and city assessors and the municipal assessors of
the municipalities within MMA shall be guided by the rules and
regulations issued by DOF.
ARTICLE 304. Authority of Local Assessors to Take Evidence. For

Appraisal
the purpose of obtaining information on which to base the market value of
any real property, the assessor of the province, city, or municipality or his
The act may
deputy or process
summon of thedetermining
owners of thetheproperties
value of to
property as ofor a
be affected
specific date for a specific purpose. (Sec 199 (e), LGC)
persons having legal interest therein and witnesses, administer oaths, and
take deposition concerning the property, its ownership, amount, nature,
and Geoff
Atty. value.Lyn D. San Agustin Page 22
ARTICLE 305. Amendment of Schedule of Fair Market Values. (a)

The provincial, city or municipal assessor may recommend to the
sanggunian concerned amendments to correct errors in valuation in the
Determination of Fair Market Value (FMV)

1. For Land
a. Assessor of the province/city or municipality may summon
the owners of the properties to be affected and may take
depositions concerning the property, its ownership, amount,
nature and value (Sec 213, LGC)
b. Assessor prepares a schedule of FMV for different classes of
real properties (Sec 212, LGC)
c. The schedule of FMV is published in a newspaper of general
circulation in the province, city or municipality concerned or
in the absence thereof, shall be posted in the provincial
capitol, city or municipal hall and in two other conspicuous
public places therein (Sec 212, LGC)
d. The provincial, city or municipal assessor may recommend to
the Sanggunian concerned amendments to correct errors in
valuation in the schedule of FMV. The Sanggunian shall act
by ordinance within 90 days from receipt thereof (Sec 214,
LGC)
2. For Machinery
a. For brand new machinery: 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 charges at the
present site (Sec 224, LGC)
b. In all other cases:
Formula:
Remaining economic life x Replacement/Reproduction Cost

= FMV
Estimated economic life
Definitions (Sec 199, LGC)
Economic Life: estimated period over which it is anticipated that

a machinery or equipment may be profitably utilized.
Remaining Economic Life: period of time expressed in years

from the date of appraisal to the date when the machinery
becomes valueless.

Replacement or Reproduction Cost: cost that would be
incurred on the basis of current prices, in acquiring an equally
desirable substitute property, or the cost of reproducing a new
replica of the property on the basis of current prices with the
same or closely similar material.
c. Depreciation Allowance: For purposes of assessment, a

depreciation allowance shall be made for machinery at:
i. Rate not exceeding 5% of original cost OR replacement or
reproduction cost for each year of use; and
ii. Remaining value shall be fixed at not less than 20% of the
replacement or reproduction cost for so long as the machinery
remains useful and in operation.
Schedule of fair market value, when made
Before any general revision of property assessment is made pursuant
to the provisions of this Title, there shall be prepared a schedule of
fair market values by the provincial, city and the municipal assessors
of the municipalities within the Metropolitan Manila Area for the
different classes of real property situated in their respective local
government units for enactment by ordinance of the Sanggunian
concerned. The schedule of fair market values shall be published in a
newspaper of general circulation in the province, city or municipality
concerned, or in the absence thereof, shall be posted in the provincial
capitol, city or municipal hall and in two other conspicuous public
places therein.
In the preparation of schedules of fair market values, the provincial
and city assessors and the municipal assessors of the municipalities
within MMA shall be guided by the rules and regulations issued by
DOF.
FMV, where published or posted
The schedule of fair market value shall be published in a newspaper of
general circulation in the province, city or municipality concerned, or
in the absence thereof, shall be posted in the provincial capitol, city or
municipal hall and in two other conspicuous public places therein.
A. AUTHORITY OF ASSESSOR TO TAKE EVIDENCE.
For the purpose of obtaining information on which to base the market

value of any real property, the assessor of the province, city or
municipality or his deputy may summon the owners of the properties
to be affected or persons having legal interest therein and witnesses,
administer oaths, and take deposition concerning the property, its
ownership, amount, nature, and value.
B. AMENDMENT OF SCHEDULE OF FAIR MARKET VALUES.
1. The provincial, city or municipal assessor may recommend to the

sanggunian concerned amendments to correct errors in valuation in
the schedule of fair market values. The sanggunian concerned shall,

by ordinance, act upon the recommendation within ninety (90) days
from receipt thereof.
2. The provincial, city, or municipal assessor may recommend to the

sanggunian concerned amendments to the prevailing schedule of fair
market values of the locality to correct errors arising from, or
involving, omissions in the subject schedule of any kind or type of real
property, or any city, district or barangay, or any road or street and/or
the classification or sub-classification of real property.
CLASSES OF REAL PROPERTY
SECTION 215. Classes of Real Property for Assessment Purposes. -

For purposes of assessment, real property shall be classified as residential,
agricultural, commercial, industrial, mineral, or special. The city or
municipality within the Metropolitan Manila Area, through their respective
Sanggunian, have the power to classify lands as residential, agricultural,
commercial, industrial, mineral, timberland, or special in accordance with
their zoning ordinances.
SECTION 216. Special Classes of Real Property. - All lands, buildings,
and other improvements actually, directly and exclusively used for
hospitals, cultural, or scientific purposes, and those owned and used by
local water districts, and government-owned or -controlled corporations
The classes of real property for assessment purposes
1. Residential
2. Agricultural
3. Commercial
4. Industrial
5. Mineral
6. Timberland
7. Special
Residential A land principally devoted to habitation

Land
Agricultural A land devoted principally to the planting of trees,
Land raising of crops, livestock and poultry, dairying, salt
making, inland fishing and similar aquaculture
activities and other agricultural activities and is not
classified as mineral, timber, residential, commercial
or industrial land
Commercial A land devoted principally for the object of profit and

Land is not classified as agricultural, industrial, mineral,
timber or residential land
Industrial A land devoted principally to industrial activity as

Land capital investment and is not classified as
agricultural, commercial, timber, mineral or
residential land
Mineral Lands Are lands in which minerals exist in sufficient

quantity or grade to justify the necessary
expenditures to extract and utilize such minerals

Special classes of real property under the LGC
1. Actually, directly and exclusively used for hospitals, cultural, or

scientific purposes;
2. Owned and used by local water districts;
3. Owned and used by Government-owned or controlled corporations
rendering essential public services in the (1) supply and distribution
of water and/or (2) generation and transmission of electric power.
(Sec. 216, LGC)
NOTE: Special classes of real property have lower assessment level
compared with other classes of real property.
ACTUAL USE OF PROPERTY AS BASIS OF ASSESSMENT
SECTION 217. Actual Use of Real Property as Basis for

Assessment. - 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.
ARTICLE 308. Actual Use of Real Property as Basis for
Assessment. Real property shall be classified, valued, and assessed
Step 4. DETERMINE THE ASSESSED VALUE AND THE TAX DUE

Assessment
The act or process of determining the value of a property or
proportion thereof subject to tax, including the discovery, listing
classification, and appraisal of properties (Sec 199 (f), LGC)
Basis of Assessment of Real Property
General Rule: 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)

Actual Use
Refers to the purpose for which the property is principally or
predominantly utilized by the person in possession thereof (Sec 199
(b), LGC)
Unpaid realty taxes attach to the property and are
chargeable against the person who had actual or
beneficial use and possession of it regardless of whether
or not he is the owner. To impose the real property tax on
the subsequent owner which was neither the owner nor
the beneficial user of the property during the designated
periods would not only be contrary to law but also unjust
(Estate of Lim vs. City of Manila, G.R. No. 90639,
February 21, 1990).
Exception: In case where there are mixed land uses, the
predominance rule is applied (Sec 217 in relation to Sec 199 (b), LGC)
For mixed land uses: For lands located in areas of mixed land uses,
such as residential with commercial or industrial, the predominant
use of the lands in that area shall govern the classification, valuation
and assessment thereof. If the predominant use is residential, all
lands in that area shall be assessed as residential; if the predominant
use is commercial or industrial, all lands in that area shall be assessed
as such ( Manual on Real Property Appraisal and Assessment
Operations by the DOF Bureau of Local Government Finance, January
2006, p.138)
For buildings used for a purpose different from that which the
land is classified: A lot or parcel of land classified and appraised as
commercial or industrial occupied by the building used for both
residential and commercial or industrial purposes shall be assessed
on the basis of the predominant use of building or buildings.
Procedure in Determining the Assessed Value
To determine the assessed value, the fair market value of the property
is multiplied by the assessed level as determined from an ordinance
promulgated by the Sanggunian concerned.
Procedure in Determining the Real Property Tax
Real property tax is computed by multiplying the with the applicable
RPT rate.
Basis of real property taxation
The basis of taxing real property is actual use, even if the user is not
the owner. 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)
ASSESSMENT OF REAL PROPERTY
Assessment Levels for Land
Land Use Assessment Level Not to

Exceed
Residential 20%
Agricultural 40%
Commercial, Industrial and
50%
Mineral
Timberland 20%
Assessment Levels for Buildings and Other Structures
Land Use Graduated Rates of

Residential 0-60%
Agricultural 25-50%
Commercial / Industrial 30-80%
Timberland 45-70%
Whenever real property has been divided into condominium, each

condominium owned shall be separately assessed, for purposes of real
property taxation and other tax purposes to the owner thereof and tax
on each such condominium shall constitute a lien solely thereof (Sec.
25 ,RA 776 Condominium Act)
Assessment Levels for Machineries
Assessment Level Not to

Class
Exceed
Residential 50%
Agricultural 40%
Commercial / Industrial 80%
Assessment Levels for Special Classes of Real Property
Lands, buildings and improvements, actually, directly and exclusively

use for the following purposes:
Assessment Level Not to

Purpose
Exceed
Cultural 15%
Scientific 15%
Hospital 15%
Owned and used by local water
10%
districts
Owned and used by GOCCs
rendering essential public
services in the supply and
10%
distribution of water and/or
generation or transmission of
electric power
Assessment, Reassessment and Assessment Levels
Assessment is the act or process of determining the value of a

property, or proportion thereof subject to tax, including the discovery,
listing, classification, and appraisal of properties. (Sec. 199(f), LGC)

Reassessment is the assigning of new assessed values to property,
particularly real estate, as the result of a general, partial, or
individual reappraisal of the property.
Assessment Level is the percentage applied to the fair market

value to determine the taxable value of the property (Sec. 199(g),
LGC)
Who sets the assessment levels? The assessment levels to be

applied to the fair market value of real property to determine its
assessed value shall be fixed by ordinances of the sangguniang
panlalawigan, sangguniang panlungsod or sangguniang bayan of a
municipality within the Metropolitan Manila Area, at the rates not
exceeding those enumerated under Sec. 218 of the LGC.
Effect of assessment: An assessment fixes and determines the tax

liability if the taxpayer. It is a notice to the effect that the amount
therein stated is due as tax and a demand for payment thereof.
Revision of Real Property Assessments
SECTION 219. General Revision of assessments and Property

Classification. - The provincial, city or municipal assessor shall undertake
a general revision of real property assessments within two (2) years after
the effectivity of this Code and every three (3) years thereafter.
ARTICLE 310. General Revision of Assessments and Property

Classification. (a) The provincial, city, or municipal assessor shall
undertake a general revision of real property assessment within two (2)
years after the effectivity of the Code and every three (3) years thereafter.
(b) For this purpose, the provincial assessors, the city assessors, and the
municipal assessors of MMA shall prepare the schedule of fair market
values shall
When for thegeneral
differentrevision
kinds and of classes of realand
assessment property located within
classification take
their
place? respective territorial jurisdictions within one (1) year from the
effectivity of the Code in accordance with such rules and regulations issued
by DOF. (c) The general revision of assessments and property classification
shall commence upon the enactment of an ordinance by the sanggunian
concerned adopting the schedule of fair market values but not later than
The provincial, city or municipal assessor shall undertake a general

revision of real property assessments within two (2) years after the
effectivity of this Code and every three (3) years thereafter. (Sec. 219,
LGC)
Purposes of the General Revision

1. Equalizing and updating valuations;
2. Brings to light or rediscover many properties that have been
lost from the tax roll; and
3. Enables the assessor to purge from his assessment roll the
double assessment and assessment properties that had been
destroyed and that has accumulated through the years
Valuation of Real Property: The provincial, municipal or city

assessor or his duly authorized representative shall make a

classification, appraisal and assessment of real property irrespective
of any previous assessment or taxpayers valuation thereon when:
1. Real property is declared and listed for taxation for the first
time;
2. There is an on-going general revision of property classification
and assessment; or
3. A request is made by the person in whose name the property is
declared
The assessment of real property shall not be increased oftener than

once every 3 years, except in case of new improvements substantially
increasing the value of said property, or any change in its actual use.
(Sec 220, LGC)
When real property is assessed for the first time or when an existing
assessment is increased or decreased, the provincial, city or,
municipal assessor shall within 30 days to give written notice of such
new or revised assessment to the person in whose name the property
is declared. (Sec 223, LGC)
Date of Effectivity of Assessment or Reassessment
SECTION 221. Date of Effectivity of Assessment or Reassessment. -

All assessments or reassessments made after the first (1st) day of January
of any year shall take effect on the first (1st) day of January of the
succeeding year: Provided, however, That the reassessment of real
property due to its partial or total destruction, or to a major change in its
actual use, or to any great and sudden inflation or deflation of real
property values, or to the gross illegality of the assessment when made or
to any other abnormal cause, shall be made within ninety (90) days from
ARTICLE 312. Date of Effectivity of Assessment or Reassessment.

All assessments or reassessment made after the first (1st) day of January of
any year shall take effect on the first (1st) day of January of the succeeding
year provided, however, that the reassessment of real property due to its
partial or total destruction, or to a major change in its actual use, or to any
great and sudden inflation or deflation of real property values, or to the
gross illegality of the assessment when made, or to any other abnormal
cause, shall be made within ninety (90) days from the date any such cause
Rule: All assessments or reassessments made after January 1 of any

year shall take effect on January1 of the succeeding year.
Exception: Reassessments shall take effect at the beginning of the

quarter next following the reassessment IF made due to:
1. Its partial or total destruction;

2. Major change in its actual use;
3. Great and sudden inflation or deflation of real property values;
4. Gross illegality of the assessment; and

5. Any other abnormal cause (Sec 221, LGC)
Assessment of Property Subject to Back Taxes
SECTION 222. Assessment of Property Subject to Back Taxes. - Real

property declared for the first time shall be assessed for taxes for the period
during which it would have been liable but in no case for more than ten (10)
years prior to the date of initial assessment: Provided, however, That such
taxes shall be computed on the basis of the applicable schedule of values in
force during the corresponding period.
If such taxes are paid on or before the end of the quarter following the date
the notice of assessment was received by the owner or his representative, no
interest for delinquency shall be imposed thereon; otherwise, such taxes
shall be subject to an interest at the rate of two percent (2%) per month or a
fraction thereof from the date of the receipt of the assessment until such
taxes are fully paid.
ARTICLE 313. Assessment of Property Subject to Back Taxes. Real
property declared for the first time shall be assessed for the taxes for the
period during which it would have been liable but in no case for more than
ten (10) years prior to the date of initial assessment provided, however, that
such taxes shall be computed on the basis of the applicable schedule of
values in force during the corresponding period. If such taxes are paid on or
before the end of the quarter following the date the notice of assessment
was received by the owner or his representative, no interest for delinquency
shall be imposed thereon; otherwise, such taxes shall be subject to an
interest at the rate of two percent (2%) per month or a fraction thereof from
the date of receipt of the assessment until such taxes are fully paid.
Property declared for the first time: Assessed for taxes for the
period during which it would have been liable but in no case for more
than ten (10) years prior to the date of initial assessment.
Tax Basis: Applicable schedule of values in force during the
corresponding period.
If paid on or before the end of the quarter following the date of
receipt of assessment: No interest for delinquency.
If paid after the end of the quarter following the date of receipt
of assessment: taxes shall be subject to an interest at the rate of two
percent (2%) per month or a fraction thereof from the date of the
receipt of the assessment until such taxes are fully paid.

Notification of New or Revised Assessment
SECTION 223. Notification of New or Revised Assessment. - When real
property is assessed for the first time or when an existing assessment is
increased or decreased, the provincial, city or municipal assessor shall
within thirty (30) days give written notice of such new or revised assessment
to the person in whose name the property is declared. The notice may be
delivered personally or by registered mail or through the assistance of the
punong barangay to the last known address of the person to be served.
ARTICLE 314. Notification of New or Revised Assessment. When
real property is assessed for the first time or when an existing assessment is
increased or decreased, the provincial, city, or municipal assessor shall,
within thirty (30) days, give written notice of such new or revised
assessment to the person in whose name the property is declared. The
notice may be delivered personally or by registered mail or through the
assistance of the punong barangay to the last known address of the person
to be served.
Applies when:
1. Real property is assessed for the first time
2. An existing assessment is increased or decreased
Notices may be given through:
1. Personal Notice
2. Registered Mail
3. Assistance of punong barangay
Appraisal and Assessment of Machinery
SECTION 224. Appraisal and Assessment of Machinery. -
(A) The fair market value of a brand-new machinery shall be the acquisition
cost. In all other cases, the fair market value shall be determined by dividing
the remaining economic life of the machinery by its estimated economic life
and multiplied by the replacement or reproduction cost.
(B) 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. The cost in foreign currency of imported
machinery shall be converted to peso cost on the basis of foreign currency
exchange rates as fixed by the Central Bank
ARTICLE 315. Appraisal and Assessment of Machinery. (a) The fair
market value of a brand new machinery shall be the acquisition cost. In all
other cases, the fair market value shall be determined by dividing the
remaining economic life of the machinery by its estimated economic life and
multiplied by the replacement or reproduction cost. (b) 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.
The cost in foreign currency of imported machinery shall be converted to
peso cost on the basis of foreign currency exchange rates as fixed by the
Central Bank.
Classification of Machineries:

a. Realty by Destination- Machinery essential to the business.
Note: Movable equipment to be immobilized in contemplation of the
law must first be essential and principal elements of an industry or
works without which such industry or works would be unable to carry
or function on the industrial purpose for which it was established.
(Mindanao Bus Co. vs City Assessor, G.R. No. L-17870,
September 29, 1962)
b. Realty by Incorporation Machinery permanently attached.
For machinery:
A. For brand new machinery: 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 charges at the present site.
B. In all other cases:
Formula:
Economic Life = Estimated period over which it is anticipated

that a machinery or equipment may be profitably utilized.
Remaining Economic Life = Period of time expressed in years
from the date of appraisal to the date when the machinery
becomes valueless.
Replacement or Reproduction Cost = Cost that would be
incurred on the basis of current prices, in acquiring an equally
desirable substitute property, or the cost of reproducing a new
replica of the property on the basis of current prices with the
same or closely similar material.
C. Depreciation Allowance
For purposes of assessment, a depreciation allowance shall be
made for machinery at:
Rate not exceeding five percent (5%) of original cost or

replacement or reproduction cost for each year of use: and
remaining value life shall be fixed at not less than twenty
percent (20%) of the replacement or reproduction cost for so
long as the machinery remains useful and in operation.
IV. COLLECTION OF REAL PROPERTY TAX
Step 5. PAYMENT AND COLLECTION OF REAL PROPERTY TAX
The RPT rate for the cities and municipalities in Metro Manila is two
percent (2%) while for provinces it is one percent (1%). To compute
for RPT, the RPT rate is multiplied by the assessed value of
the property. Assessed value is the fair market value of the real
property multiplied by the assessment level.

Procedure for Determination of Real Property Tax Due:
1 Take the schedule of FMV;
2 Take the assessment level by determining the classification of
property;
3 Multiply the FMV by the assessment level to get the assessed
value;
4 Real property tax is computed by multiplying the assessed value
by the RPT rate.
Date of Accrual of real property tax and special levies and

Collection of Tax
SECTION 246. Date of Accrual of Tax.- 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 247. Collection of Tax. - The collection of the real property tax
with interest thereon and related expenses, and the enforcement of the
remedies provided for in this Title or any applicable laws, shall be the
responsibility of the city or municipal treasurer concerned. The city or
municipal treasurer may deputize the Barangay treasurer to collect all taxes
on real property located in the Barangay: Provided, That the Barangay
treasurer is properly bonded for the purpose: Provided, further, That the
premium on the bond shall be paid by the city or municipal government
concerned.
ARTICLE 337. Date of Accrual of Tax. - The real property tax for any
year shall accrue on the first day of January and from the 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.
ARTICLE 338. Collection of Tax. The collection of the real property tax
with interest thereon and related expenses, and the enforcement of the
remedies provided in this Rule or any applicable laws, shall be the
responsibility of the city or municipal treasurer concerned. Property owners,
however, at their option or convenience, may pay their real property taxes to
the provincial treasurer of the province to which the municipality where the
subject property is located, belongs. The city or municipal treasurer may
deputize the barangay treasurer to collect all taxes on real property located
in the barangay provided that the barangay treasurer is properly bonded for
the purpose and provided further that the premium on the bond shall be
paid by the city or municipality concerned.
January 1st of every year and such

will constitute as a lien superior
Accrual of Tax
to any other lien, mortgage or
encumbrance of any kind
Time and Manner of Payment 1. Basic Real Property Tax and
Additional Tax for SEF in 4
equal installments (on or
before March 31/June 30/
September 30/December
31)
2. Other special levies

governed by ordinance
The collection of RPT shall be the
responsibility of the city or
municipal treasurer concerned.
The city or municipal treasurer
Collecting Officer may deputize the barangay
treasurer to collect all taxes on
real property located in the
barangay; Provided the barangay
treasurer is properly bonded.
2% for each month on unpaid
amount until the delinquent
Interest for Late Payment amount is paid provided in no
case shall the total interest
exceed 36 months
Discount not exceeding 20% of
For Advance Payment
annual tax
Discount not exceeding 10% of
For Prompt Payment
annual tax due
1. To be posted by the city or
municipal treasurer in
conspicuous and publicly
accessible place at the city
or municipal hall;
a. For Basic RPT and
Additional tax for SEF
Notice of Time for Collection on or before January 31
of Tax of each year;
b. For any other tax- any
other date provided in
the ordinance
2. Publication in a newspaper
of general circulation in the
locality once a week for 2
consecutive weeks
Payments of real property taxes shall first be applied to prior years

delinquencies, interests and penalties, if any, and only after said
delinquencies are settled may tax payments be credited for current
period (Sec 250, LGC)
Under Sec 247 of the LGC, provincial treasurer are obviously relieved
of the authority to collect real property tax, however, it appears that
such omission is only typographical error:
1. Sec. 170 of the LGC provides that all local taxes, fees and
charges shall be collected by the provincial, city, municipal or
barangay treasurer.
2. Sec 470 (d)(6) of the LGC provides that the provincial treasurer
shall exercise technical supervision over all treasury officials of
component cities and municipalities.
3. Real property tax is a shared tax where the proceeds thereof are
distributed:

a. 35% to the province which shall accrue to the general
fund;
b. 40% to the general fund of the municipality where the
property is located; and
c. 25% to the barangay where the property is located.
(Cabaluna, p. 245-246)
4. Property owners, however, at their option or convenience, may
pay their real property taxes to the provincial treasurer of the
province to which the municipality where the subject property is
located belongs(Sec 338, IRR of LGC)
Duty of Assessor to furnish local treasurer with Assessment
Rolls
SECTION 248. Assessor to Furnish Local Treasurer with Assessment
Roll. - The provincial, city or municipal assessor shall prepare and submit
to the treasurer of the local government unit, on or before the thirty-first
(31st) day of December each year, an assessment roll containing a list of
all persons whose real properties have been newly assessed or reassessed
and the values of such properties.
ARTICLE 339. Local Assessor to Furnish Local Treasurer with
Assessment Roll. The provincial, city, or municipal assessor shall
prepare and submit to the local treasurer concerned, on or before the
thirty-first (31st) day of December each year, an assessment roll containing
Notice of Time for Collection of Tax

SECTION 249. Notice of Time for Collection of Tax. - The city or
municipal treasurer shall, on or before the thirty-first (31st) day of January
each year, in the case of the basic real property tax and the additional tax
for the Special Education Fund (SEF) or on any other date to be
prescribed by the Sanggunian concerned in the case of any other tax
levied under this Title, post the notice of the dates when the tax may be
paid without interest at a conspicuous and publicly accessible place at the
city or municipal hall. Said notice shall likewise be published in a
newspaper of general circulation in the locality once a week for two (2)
consecutive weeks.
ARTICLE 340. Notice of Time for Collection of Tax. The city or
municipal treasurer shall, on or before the thirty-first (31st) day of January
each year, in the case of the basic real property tax and the additional tax
for special education fund or on any other date to be prescribed by the
1. To be posted by the city or municipal treasurer in conspicuous

and publicly accessible place at the city or municipal hall;
a. For Basic RPT and Additional tax for SEF on or before January
31 of each year;
b. For any
SECTION other
270. tax- any
Periods other date
Within Whichprovided in the Real
To Collect ordinance
Property
Taxes. - The basic real property tax and any other tax levied under this
2. Publication in a newspaper of general circulation in the locality
Title shall be collected within five (5) years from the date they become
once a week for 2 consecutive weeks
due. No action for the collection of the tax, whether administrative or
judicial, shall
Periods withinbe which
instituted
to after thereal
collect expiration of such
property tax period. In case of
fraud or intent to evade payment of the tax, such action may be instituted
for the collection of the same within ten (10) years from the discovery of
such fraud or intent to evade payment. The period of prescription within
which to collect shall be suspended for the time during which:
(1) The local treasurer is legally prevented from collecting the tax;
(2) The owner of the property or the person having legal interest
therein requests for reinvestigation and executes a waiver in writing
before the expiration of the period within which to collect; and
ARTICLE 361. Periods Within Which To Collect Real Property Taxes.

The basic real property tax and any other tax levied under this Rule shall
be collected within five (5) years from the date they become due. No action
for collection of the tax, whether administrative or judicial, shall be
instituted after the expiration of such period. In case of fraud or intent to
evade payment of the tax, such action may be instituted for the collection
thereof within ten (10) years from the discovery of such fraud or intent to
evade payment. The period of prescription within which to collect shall be
suspended for the time during which: (a) The local treasurer is legally
prevented from collecting the tax; (b) The owner of the property or the
person having legal interest therein requests for reinvestigation and
Prescription of Collection of Taxes

1. Basic Real Property tax and any other tax 5 years from the
date they became due.
2. When there is fraud or intent to evade the payment of taxes 10
years from discovery of the fraud or intent to evade payment.
Grounds for the Suspension of the Running of the Prescriptive
Periods
1. The local treasurer is legally prevented from collecting the tax;
2. The owner of the property or the person having legal interest
therein requests for reinvestigation and executes a waiver in
writing before the expiration of the period within which to
collect; and
therein is out of the country or otherwise cannot be located.
Note: These are the same grounds for suspending assessment and
collection of local taxes.
Persons liable to pay real property tax: Unpaid realty taxes attach
to the property are chargeable against the person who has actual or
beneficial use and possession of it regardless of whether or not he is
the owner. Read: Manila Electric Company vs. Barlis, GR No.
114231, May 18, 2001
To impose unpaid realty tax on the subsequent owner which was

neither the owner nor the beneficial user the property during the
designated periods would not only be contrary to law but also unjust.

SPECIAL RULES ON PAYMENT

A Payment of Real Property Tax in Installments
Section 250. Payment of Real Property Taxes in Installments. - The

owner of the real property or the person having legal interest therein may
pay the basic real property tax and the additional tax for Special
Education Fund (SEF) due thereon without interest in four (4) equal
installments; the first installment to be due and payable on or before
March Thirty-first (31st); the second installment, on or before June Thirty
(30); the third installment, on or before September Thirty (30); and the
last installment on or before December Thirty-first (31st), except the
special levy the payment of which shall be governed by ordinance of the
sanggunian concerned.
The date for the payment of any other tax imposed under this Title without
interest shall be prescribed by the sanggunian concerned.
Payments of real property taxes shall first be applied to prior years

delinquencies, interests, and penalties, if any, and only after said
delinquencies are settled may tax payments be credited for the current
period.
The owner or the person having legal interest may pay the basic real
property tax and the additional tax for Special Education Fund (SEF)
due without interest in four (4) equal installments on or before:
a March 31
b June 30
c September 30
d December 31
This shall not apply to special levies which shall be governed by

ordinance of the sanggunian concerned.
B Interests on Unpaid Real Property Tax
Section 255. Interests on Unpaid Real Property Tax. - In case of failure to

pay the basic real property tax or any other tax levied under this Title
upon the expiration of the periods as provided in Section 250, or when
due, as the case may be, shall subject the taxpayer to the payment of
interest at the rate of two percent (2%) per month on the unpaid amount
or a fraction thereof, until the delinquent tax shall have been fully paid:
Provided, however, That in no case shall the total interest on the unpaid

tax or portion thereof exceed thirty-six (36) months.
The rate is (2%) per month on the unpaid amount until the delinquent
tax shall have been fully paid. Provided, in no case shall the total
interest on the unpaid tax or portion thereof exceeded thirty-six (36)
months.
C Condonation of Real Property Tax
Section 276. Condonation or Reduction of Real Property Tax and

Interest. - In case of a general failure of crops or substantial decrease in
the price of agricultural or agribased products, or calamity in any
province, city or municipality, the sanggunian concerned, by ordinance
passed prior to the first (1st) day of January of any year and upon
recommendation of the Local Disaster Coordinating Council, may condone
or reduce, wholly or partially, the taxes and interest thereon for the
succeeding year or years in the city or municipality affected by the
calamity.
Section 277. Condonation or Reduction of Tax by the President of the

Philippines. - The President of the Philippines may, when public interest so
requires, condone or reduce the real property tax and interest for any year
in any province or city or a municipality within the Metropolitan Manila
Area.
Instances which the Sanggunian may Condone or Reduce Real

Property Tax
The Sanggunian by ordinance passed prior to the first (1st) day of

January of any year and upon recommendation of the Local Disaster
Coordinating Council, may condone or reduce, wholly or partially, the
taxes and interest thereon for the succeeding year or years in the city
or municipality affacted by the calamity in cases of :
1 General failure of Crops

2 Substantial decrease in the price of agricultural or agri-based
products
3 Calamity in any province, city or municipality
Presidents Power to Condone or Reduce Real Property Tax
The president may, when public interest so requires, condone or

reduce the real property tax and interest for any year in any province
or city or a municipality within the Metro.

REMEDIES OF LGUs FOR COLLECTION OF REAL PROPERTY

TAX
A. ADMINISTRATIVE
i Lien
ii Levy
iii Distraint
B. JUDICIAL
I. ADMINISTRATIVE
LIEN: A legal claim on the property subject to RPT as security for the
payment of the tax obligation.
It is superior to all liens, charges or encumbrances irrespective of the

owner or possessor thereof, and is enforceable by administrative or
judicial action. It is extinguished only upon payment of tax and other
expenses (Sec 257, LGC).
It is constituted on the property subject to the tax from the date the
real property tax accrued which is on the first day of January (Sec
246, LGC).
It may be extinguished only upon payment of the tax and related

interests and expenses (Sec 246-247, LGC)
LEVY: after the expiration of the time required to pay the tax levied,
the real property subject to the tax may be levied upon (Sec 258-262,
LGC)
Procedure for Levy for Purposes of Satisfying Real Property

Taxes
1 Tax constitutes a lien on the property superior to all liens and may
only be extinguished upon payment of the tax and charges.
2 Time for payment of real property tax expires
3 Warrant of Levy issued by Local Treasurer which has the force of legal
execution in the LGU concerned
4 Warrant mailed to or served upon the delinquent owner. Written

notice of levy and warrant is mailed/served upon the assessor and the
Register of Deeds of the LGU
5 30 days from service of warrant, Local Treasurer shall advertise sale

of property by Posting notice at the main entrance of the LGU
hall/building and in a conspicuous place in the barangay where the
property is located; and Publication once a week for 2 weeks
6 Before the date of sale the owner may stay the proceeding by paying
the delinquent tax, interest and expenses of sale

7 Sale is held at the main entrance of the LGU bldg.., or on the property
to be sold, or any other place specified in the notice
8 If there is a bidder and highest bid is sufficient to pay real property

tax and related interests and costs, bidder pays and treasurer reports
sale to Sanggunian 30 days after the sale. The Local Treasurer will
deliver to purchaser the certificate of sale, proceeds of sale in excess
of the delinquent tax, interest, expenses of sale remitted to owner.
Within 1 year from sale, owner may redeem upon payment of

the delinquent tax, interest due, expenses of sale (from date of
delinquency to date of sale), and additional interest of 2% per month
on the purchase price from the date of sale to date of redemption.
Delinquent owner retains possession and right to the fruits. Price
paid plus interest of 2% per month shall be returned to the buyer.
9 If there is no bidder or highest bid is insufficient to pay real property

tax and related interests and costs, the Local Treasurer shall purchase
the property in behalf of the LGU. Register of Deeds shall transfer the
title of forfeited property to LGU without need of court order.
Within 1 year from forfeiture, owner may redeem property by paying

to Treasurer full amount of tax, interest, costs of sale, otherwise
ownership shall vest to LGU.
Sanggunian concern may, by ordinance duly approved and with notice

of not less than 20 days, sell/dispose by public auction of property
acquired by forfeiture.
10 Levy may be repeated until full amount due, including all expenses, is
collected.
DISTRAINT OF PERSONAL PROPERTY
SECTION 254. Notice of Delinquency in the Payment of the Real

Property Tax.
(a) When the real property tax or any other tax imposed under this Title
becomes delinquent, the provincial, city or municipal treasurer shall
immediately cause a notice of the delinquency to be posted at the main
entrance of the provincial capitol, or city or municipal hall and in a publicly
accessible and conspicuous place in each Barangay of the local government
unit concerned. The notice of delinquency shall also be published once a
week for two (2) consecutive weeks, in a newspaper of general circulation
in the province, city, or municipality.
(b) Such notice shall specify the date upon which the tax became
delinquent and shall state that personal property may be distrained to
are paid before the expiration of the year for which the tax is due except
effect payment. It shall likewise state that at any time before the distraint
when the notice of assessment or special levy is contested administratively
of personal property, payment of the tax with surcharges, interests and
or judicially pursuant to the provisions of Chapter 3, Title II, Book II of this
penalties may be made in accordance with the next following Section, and
Code, the delinquent real property will be sold at public auction, and the title
unless the tax, surcharges and penalties
to the property will be vested in the purchaser, subject, however, to the right
of the delinquent owner of the property or any person having legal interest
therein to redeem the property within one (1) year from the date of sale.

Posting and Publication of Notice of Deliquency As soon as the
real property tax or any other tax imposed under Title II, Book II of
the LGC becomes delinquent, local treasurer concerned shall
forthwith post and publish a notice of delinquency of real property in
compliance with Section 254 above.
The notice shall be posted (a) at the main entrance of the provincial
capitol, or city or municipal hall and (b) in a publicly accessible and
easily visible place in each barangay of the local government unit
concerned.
The notice should also be published once a week for 2 consecutive
weeks in a newspaper of general circulation in the province, city or
municipality.
Statements on Date of Deliquency and Payment of Tax; Effect of
Non Payment. It should be emphasized that only (1) the statements
of the delinquency and payment of the tax (2)the effect of non-
payment as well as (3) the right of redemption of the property owner
are material in paragraph (b) of Section 254. The provisions on
distraint of personal property is immaterial on this section.
Thus, paragraph (b) of Section 254 mandates that the notice of
delinquency shall specify the date upon which the tax which became
delinquent and state that payment therefor, with surcharges, interests
and penalties maybe pursuant to Section 255. Furthermore,
paragraph (b) of Section 254 provides that unless the tax, surcharges,
interests and penalties are paid before the expiration of the year for
which the tax is due, except when the notice of assessment or special
levy is contested administratively or judicially, the delinquent real
property will be sold at public auction, and the title to the property
will be vested in the purchaser, subject, however, to the right of the
delinquent owner of the property or any person having legal interest
therein to redeem the property within one year from the date of sale.
NOTES:
In determining to whom the notice of sale should have been sent,

settled is the rule that, for purposes of real property taxation, the
registered owner of the property is deemed the taxpayer. Thus, in
identifying the real delinquent taxpayer, a local treasurer cannot rely
solely on the tax declaration but must verify with the Register of
Deeds who the registered owner of the particular property is. (Sps.
Hu Chuan and Leoncia Lim Hu vs. Sps. Unico, GR No. 146534
September 18, 2009)
The proceeds of the sale in excess of the delinquent tax, the interest
due thereon and the expenses of sale shall be remitted to the owner of
real property or person having legal interest.
The owner shall not be deprived of possession and to rentals/income
thereof until the expiration of the time allowed for its redemption.
Notice and publication for sales, as well as the legal requirements for
a tax delinquency sale are mandatory, and the failure to comply
therewith can invalidate the sale. The prescribed notices must be

sent to comply with the requirements of due process. Read: De
Knetch vs. CA; De Knetch vs. Sayo, GR No. 108015 May 20,
1998
LOCAL GOVERNMENTS LIEN
SECTION 257. Local Governments Lien. - The basic real property tax
and any other tax levied under this Title constitutes 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.
ARTICLE 348. Local Government Lien. The basic real property tax
and any other tax levied under this Rule 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
Generally, a lien is a claim, encumbrance, or charge on property for

payment of some debt, obligation or duty.
In its specific sense, a tax lien is a statutory lien existing in favor of
the state or municipality, upon the lands of a person charged with
taxes, binding the same either for the taxes assessed upon the specific
tract of land or (in some jurisdiction) for all the taxes due from the
individual, and which maybe foreclosed for non-payment, by judgment
of a court or sale of land.
A lien in its modern acceptation is understood to denote a legal claim
or charge on property, either real or personal, as a security for the
payment of debt or obligation. Its meaning is more extensive than the
jus retentionis (right of retention) of the civil law.
The lien, once created on the subject property, may only be
extinguished upon payment of the tax and related interests and
expenses.
Section 257 reinforces the principle enunciated in Section 175 of the
LGC which states that the local taxes, fees, charges and other
revenues constitute a lien, superior to all liens, charges or
encumbrances in favor of any person. Section 257 further clarifies,
however, that real property taxes establish or create a lien on the
properties subject to tax regardless of the owner or possessor of such
properties.
Thus, a tax lien is distinguished from distraint in that the latter, the
property must be that of the taxpayer, although it need not be the
property in which the tax is assessed; a tax lien, however, is generally
directed to the property subject to tax regardless of its owner. (Vitug
and Acosta, Tax Law and Jurisprudence, 2nd ed., p.447 citing 51 Am.
Jur. 857)
REMEDIES IN GENERAL
SECTION 256. Remedies For The Collection Of Real Property Tax. -

For the collection of the basic real property tax and any other tax levied
under this Title, the local government unit concerned may avail of the

ARTICLE 347. Remedies for the Collection of Real Property Tax.

For the collection of the basic real property tax and any other tax levied
under this Rule, LGU may avail of remedies by administrative or judicial
action. The administrative remedies which are summary in nature are:
(a) Levy on real property, and
(b) Sale of real property at public auction.
The judicial remedy is availed of in the court of appropriate jurisdiction.

These remedies are cumulative, simultaneous and unconditional, that is, any
or all of the remedies or combination thereof may be resorted to and the use
or non-use of one remedy shall not be a bar against the institution of the
others. Formal demand for the payment of the delinquent taxes and
The administrative remedies which are summary in nature are (a) levy
on real property and (b) sale of real property at public auction. The
judicial remedy is availed of in the court of appropriate jurisdiction.
These remedies are cumulative, simultaneously and unconditional,
that is, any or all of the remedies or combinations thereof may be
resorted to and the use and non-use of one remedy shall not be a bar
against the institution of others. Formal demand for the payment of
the delinquent taxes and penalties due is not a pre-requisite to such
remedies. The notice of delinquency required in Article 346 of this
Rule, (Section 254 in the LGC) shall be sufficient for the purpose
(Article 348, Implementing Rules and Regulations of the LGC)
As previously discussed, local government units may collect real
property taxes by administrative action thru the remedy of levy on
real property and not thru distraint of personal property. The rules
pertaining to collection of real property taxes by judicial action is
SECTION
provided for258. Levyinon
further Section 266, 267 -and
Real Property. After
268the
ofexpiration
the LGC. of the time
required to pay the basic real property tax or any other tax levied under this
Title, real property subject to such tax may be levied upon through the
issuance of a warrant on or before, or simultaneously with, the institution of
the civil action for the collection of the delinquent tax. The provincial or city
treasurer, or a treasurer of a municipality within the Metropolitan Manila
Area, as the case may be, when issuing a warrant of levy shall prepare a
duly authenticated certificate showing the name of the delinquent owner of
the property or person having legal interest therein, the description of the
property, the amount of the tax due and the interest thereon. The warrant
shall operate with the force of a legal execution throughout the province,
city or a municipality within the Metropolitan Manila Area. The warrant
shall be mailed to or served upon the delinquent owner of the real property
or person having legal interest therein, or in case he is out of the country or
cannot be located, to the administrator or occupant of the property. At the
same time, written notice of the levy with the attached warrant shall be
mailed to or served upon the assessor and the Registrar of Deeds of the
province, city or a municipality within the Metropolitan Manila Area where
the property is located, who shall annotate the levy on the tax declaration
and certificate of title of the property, respectively.
The levying officer shall submit a report on the levy to the Sanggunian
concerned within ten (10) days after receipt of the warrant by the owner of
the property or person having legal interest therein.
ARTICLE 349. Levy on Real Property. After the expiration of the time
required to pay the basic real property tax or any other tax levied under this
Rule, real property subject to such tax may be levied upon through the
issuance of a warrant on or before, or simultaneously with the institution of
Atty.
the Geoff
civic Lyn D. San
action forAgustin
the collection Page 44 delinquent tax. Levy on real
of the
property shall be made in the manner herein set forth. (a) The provincial or
city treasurer, or municipal treasurer of a municipality within MMA when
issuing a warrant of levy shall prepare the duly authenticated certificate
Procedure for Levy on Real Property When the period required

to pay for the realty tax expires, properties subject thereto maybe
levied upon through the issuance of a warrant of levy on or before, or
simultaneously with, the institution of the civil action for the
collection of the delinquent taxes.
The issuance of the warrant of levy must conform to the following
statutory procedure:
(1)The provincial, city or municipal treasurer must prepare a
duly authenticated certificate showing (a) the name of the
delinquent owner of the property or person having legal
interest therein (b) the description of the property and (c) the
amount of tax due and the interest thereon.
(2)The warrant shall be mailed to or served upon the delinquent

owner of the real property or person having legal interest
therein, or in case he is out of the country or cannot be
located, the administrator or occupant of the property.
(3)At the same time, written notice of the levy with the attached
warrant shall be mailed to or served upon the assessor and
the Registrar of Deeds of the province, city or municipality
within the Metropolitan Manila Area where the property is
located.
(4)The Assessor and Registrar of Deeds shall annotate the levy

or the tax declaration and certificate of title of the property
respectively.
(5)The levying officer shall submit a report on the levy to the

Sanggunian concerned within 10 days after receipt of the
warrant by the owner of the property or person having legal
interest therein.
Service of Warrant of Levy The requirements in Section 258

that the warrant of levy should be mailed to or served upon the
delinquent owner of the real property or person having legal interest
therein or administrator or occupant, as the case may be, is
significant because the service of warrant of levy stipulates the period
within which the property subject of delinquency may be properly
advertised and sold to effect satisfaction of the real property tax.

Consequently, Section 260 of the LGC provides that within the
30 days after the service of the warrant of levy, the local treasurer
shall proceed to publicly advertise for sale or auction the property or
a usable portion thereof as maybe necessary to satisfy the tax
delinquency and expense of the sale.
Concurrent with the time the warrant of levy is mailed to or
served upon the delinquent owner of the real property or person
intervened therein, written notice of the levy, with the attached
warrant, shall likewise be mailed to or served upon the assessor and
the Registrar of Deeds of the province, city or municipality within the
Metropolitan Manila Area where the real property is located.
Receipt of Warrant of Levy The entire procedure for levying
upon real property ends with the reportorial duty of the local
treasurer, hence, the provision in the last paragraph of Section 258
stating that the local treasurer shall submit a report on the levy to the
sanggunian concerned within 10 days after receipt of the warrant by
the owner of the property or person having legal interest therein.
Note, therefore, that the warrant of levy should not only be
mailed to or served upon the delinquent owner of the real property or
person having legal interest therein, it must also be received by such
delinquent owner or legally interested person, the date of receipt of
the warrant of levy being material to the statutory period within
which the levying officer must render his report to the sanggunian
concerned.
Force of Legal Execution The warrant of levy issued
SECTION 260. Advertisement and Sale. - Within thirty (30) days after
pursuant to the provisions of Section 258 above shall operate with the
service of the warrant of levy, the local treasurer shall proceed to publicly
force of a legal execution throughout the province, city or a
advertise for sale or auction the property or a usable portion thereof as
municipality within
may be necessary to the Metropolitan
satisfy Area.
the tax delinquency and expenses of sale. The
advertisement shall be effected by posting a notice at the main entrance of
the provincial, city or municipal building, and in a publicly accessible and
conspicuous place in the Barangay where the real property is located, and
by publication once a week for two (2) weeks in a newspaper of general
circulation in the province, city or municipality where the property is
located. The advertisement shall specify the amount of the delinquent tax,
the interest due thereon and expenses of sale, the date and place of sale,
the name of the owner of the real property or person having legal interest
therein, and a description of the property to be sold. At any time before the
date fixed for the sale, the owner of the real property or person having
legal interest therein may stay the proceedings by paying the delinquent
tax, the interest due thereon and the expenses of sale. The sale shall be
held either at the main entrance of the provincial, city or municipal
building, or on the property to be sold, or at any other place as specified in
the notice of the sale.
Within thirty (30) days after the sale, the local treasurer or his
deputy shall make a report of the sale to the Sanggunian concerned, and
which shall form part of his records.The local treasurer shall likewise
prepare and deliver to the purchaser a certificate of sale which shall
contain the name of the purchaser, a description of the property sold, the
amount of the delinquent tax, the interest due thereon, the expenses of
sale and a brief description of the proceedings: Provided, however, That
proceeds of the sale in excess of the delinquent tax, the interest due
thereon, and the expenses of sale shall be remitted to the owner of the real
property
Atty. Geoffor person
Lyn having
D. San legal interest
Agustin Pagetherein.
46
The local treasurer may, by ordinance duly approved, advance an amount
sufficient to defray the costs of collection thru the remedies provided for in
this Title, including the expenses of advertisement and sale.
Procedure for Advertisement Prior to Sale Before the sale of

real property subject to tax may be validly effected, prior
advertisement therefor is required pursuant to Section 260. Thus, the
procedure for advertisement prior to sale or auction of real property
is as follows:
(1)Within 30 days after the service of warrant of levy, the local
treasurer shall publicly advertise the property or usable
portion thereof for sale or auction.
(2)The advertisement shall be effected by (a) posting a notice at

the main entrance of the provincial, city or municipal
building, and in a publicly accessible and conspicuous place
in the barangay where the real property is located; and (b)
publication once a week for 2 weeks in newspaper of general
circulation in the province, city or municipality where the
property is located.
(3)The advertisement shall specify (a) the amount of the

delinquent tax, the interest due thereon and expenses of the
sale (b) the date and place of the sale (c) the name of the
owner of the real property or person having legal interest
therein; and (d) description of the property sold.
Deferment of Proceedings The owner of the property or person

having legal interest therein may stay the proceedings by paying the
delinquent tax, the interest due thereon and the expenses of the sale,
at any time before the date fixed for the sale.
Place of Sale The procedure for advertisement having been

complied with and the owner of the property or the person having
legal interest therein not having stayed the proceedings by paying the
delinquent tax and related expenses, the sale may proceed and may
be held either (a) at the main entrance of the provincial, city or
municipal building, (b) on the property to be sold or (c) at any other
place as specified in the notice of sale.
Procedure After Sale - After the real property has been sold, the
local treasurer is required to accomplish the following:
(1)Within 30 days after sale, the local treasurer or his deputy

shall make a report of the sale to the sanggunian
concerned, and which shall form part of his records,
(2)The local treasurer shall likewise prepare and deliver to

the purchaser a certificate of sale which shall contain (a)
the name of the purchaser; (b) a description of the
property sold; (c) the amount of the delinquent tax and

related expenses; and (d) a brief description of the
proceedings.
(3)The local treasurer shall remit to the owner of the real

property or person having legal interest therein the
proceeds of the sale in excess of the delinquent tax.
(4)The local treasurer , may, by ordinance duly approved,

advance an amount sufficient to defray costs of collection
including the expenses of advertisement and sale.
Notice Requirements under the Real Property Tax Code Prior

to the enactment of the LGC in 1992, Section 65 and Section 73 of the
Real Property Tax Code defined the Rules on Notice of Tax
Delinquency as well as the Procedure for Advertisement of Sale of
Real Property at Public Auction, respectively.
With respect to the first notice under Section 65, the owner of the real
property subject to tax is supposed to be given a Notice of
Delinquency stating that if the property tax is not paid, the local
government would sell the real property to satisfy the tax in arrears.
This consists of four separate measures: 1) posting of the notice of tax
delinquency at the main entrance of the city hall (2) posting of the
notice of tax delinquency in a public and conspicuous place in each
barangay of the city; (3) publication of the notice of tax delinquency
once a week for three consecutive weeks in a newspaper of general
circulation in the city, and (4) Verbal announcement of the existence
of the notice of tax delinquency by a crier at the market place for at
least three market days. (Aquino v. Quezon City, G.R. No. 137534,
August 3, 2006, 497 SCRA 497, p.505)
Under Section 73, copy of the Notice (of sale of real property at public
auction) shall forthwith be sent either by (1) registered mail or (2) by
messenger, or (3) through the barrio captain, to the delinquent tax
payer, at his address as shown in the tax rolls or property tax record
cards of the municipality or city where the property is located, or at
his residence, if known to the said treasurer or barrio captain:
Provided, however, That the return of the proof of service under oath
shall be filed by the person making the service with the provincial or
city treasurer concerned.
The following decision of the Supreme Court, however, defined the
jurisprudential rules on Notice requirements under the Real Property
Tax Code:
(1)The prescribed procedure in auction sales of property for tax
delinquency being in derogation of property rights should be
followed punctiliously. Strict adherence to the Statutes
governing tax sales is imperative not only for the protection
of the taxpayers, but also to allay any possible suspicion on
collusion between the buyer and the public officials called
upon to enforce such laws. Notice of Sale to the
delinquent landowners and the public in general is an

essential and indispensable requirement of the law the
non-fulfillment of which vitiates the sale. (Serfino v,
Court of Appeals, G.R. No. L-40858, September 15, 1987, 154
SCRA 19)
(2)There is no dispute that the requirements of the law as

regards posting of notice, publication and announcement of
crier have been complied with. The controversy lies in the
failure of the City Treasurer to notify effectively the
delinquent taxpayer who at the time of auction sale was
Teresa L. Valencia. Apparently, petitioner proceeded on the
wrong premise that the property was still owned by the
former registered owner, Alberto Sta. Maria, who sold the
property to Valencia in 1964. Hence, the public auction sale
conducted on 29 February 1984 is declared void for lack of
notice to the registered owner Teresa L. Valencia. Read:
Estate of the Late Mercedes Jacob v. Court of Appeals,
G.R. Nos. 120435 and 120974, December 22, 1997, 283
SCRA 474
(3)Unlike land registration proceedings which are in rem, cases

involving an auction sale of land for the collection of
delinquent taxes are in personam. Thus, notice by
publication, though sufficient in proceedings in rem, does not
as a rule satisfy the requirement proceedings in personam.
As such, mere publication of the notice of delinquency
would not suffice, considering that the procedures in
tax sales are in personam. It was, therefore, still
incumbent upon the city treasurer to send notice of tax
delinquency directly to the taxpayer in order to protect
the interests of the latter.
For the purposes of the real property tax, the registered

owner of the property is deemed the tax payer. Hence, only
the registered owner is entitled to a notice of tax delinquency
and other proceedings relative to the tax sale. Not being the
SECTION 263. Purchase of Property By the Local Government Units
for Want registered
of Bidder. owners of the
- In case property,
there is no petitioners cannot
bidder for the real claim to
property
advertisedhave been
for sale as deprived of such
provided herein, or notice. In fact,
if the highest bid they
is for were not
an amount
entitled
insufficient to pay to
theit. (Talusan
real propertyv.taxTayag,
and theG.R. No.interest
related 133698. andApril
costs4,
of
2001,treasurer
sale the local 346 SCRA 263)
conducting the sale shall purchase the property in
behalf of the local government unit concerned to satisfy the claim and within
two (2) days thereafter shall make a report of his proceedings which shall be
reflected upon the records of his office. It shall be the duty of the Registrar
of Deeds concerned upon registration with his office of any such declaration
of forfeiture to transfer the title of the forfeited property to the local
government unit concerned without the necessity of an order from a
competent court.
Within one (1) year from the date of such forfeiture, the taxpayer or any of
his representative, may redeem the property by paying to the local treasurer
the full amount of the real property tax and the related interest and the
costs of sale. If the property is not redeemed as provided herein, the
ownership thereof shall be fully vested on the local government unit
Atty. Geoff Lyn D. San Agustin
concerned. Page 49
ARTICLE 354. Purchase of Property By the Local Government Units

registrar of deeds concerned, upon registration with his office of any such
declaration of forfeiture, to transfer the title of the forfeited property to the
LGU concerned without the necessity of an order from a competent court.
Within one (1) year from the date of such forfeiture, the taxpayer or his
representative, may redeem the property by paying to the local treasurer
the full amount of the real property tax and the related interest and costs
of sale. If the property is not redeemed as provided herein, the ownership
There are two instances under which the local government unit may
purchase the property under Section 263:
(1)If there is no bidder for the real property advertised for
sale and,
(2)If there are bidders but the highest bids is insufficient

to pay the real property tax and the related interest
and costs of sale.
Under these circumstances, the local treasurer is authorized to

purchase the property in behalf of the local government unit
concerned to satisfy the claim. The Register of Deeds, upon
registration of forfeiture, is mandated to effect the transfer of the title
ofSECTION 261.property
the forfeited Redemption oflocal
to the Property Sold. - unit
government Within one (1)
without yearof
need
from the date of sale, the owner of the delinquent real property or person
an order from a competent court.
having legal interest therein, or his representative, shall have the right to
redeem
The the property
transfer having upon payment
been to the the
effected, local taxpayer
treasurer ofortheany
amount
of of
his
the delinquent tax, including the interest due thereon,
representative may redeem the property within 1 year from the dateand the expenses of
ofsale
thefrom the date
forfeiture byofpaying
delinquency
to the to the treasurer
local date of sale,
theplus
full interest
amountofofnotthe
more than two percent (2%) per month on the purchase price from the
real property tax and the related interest and costs of sale.
date of sale to the date of redemption. Such payment shall invalidate the
certificate
Note of sale
that the issued to of
ownership thethe
purchaser and the shall
real property ownerbe
of fully
the delinquent
vested on
real local
the property or person having
government unit iflegal
suchinterest thereinisshall
property notberedeemed
entitled to ain
certificate ofwith
accordance redemption
rules as which
providedshallinbe issued
this by the local treasurer or
Section.
his deputy. From the date of sale until the expiration of the period of
redemption, the delinquent real property shall remain in the possession of
the owner or person having legal interest therein who shall be entitled to
the income and other fruits thereof. The local treasurer or his deputy,
upon receipt from the purchaser of the certificate of sale, shall forthwith
return to the latter the entire amount paid by him plus interest of not
more than two percent (2%) per month. Thereafter, the property shall be
free from the lien of such delinquent tax, interest due thereon and
expenses of sale.
ARTICLE 352. Redemption of Property Sold. Within one (1) year
from the date of sale, the owner of the delinquent real property or person
having legal interest therein, or his representative, shall have the right to
redeem the property upon payment to the local treasurer of the amount of
the delinquent tax, including the interest due thereon, and the expenses of
sale from the date of delinquency to the date of sale, plus interest of not
more than two percent (2%) per month on the purchase price from the
date of sale to the date of redemption. Such payment shall invalidate the
certificate of sale issued to the purchaser and the owner of the delinquent
Effect of Payment Full payment of the items enumerated in this

Section invalidates the certificate of sale issued to the purchaser and
entitles the owner of the delinquent real property or person having
legal interest therein to a certificate of redemption which shall be
issued by the local treasurer or his deputy.
Upon receipt of the certificate of sale from the purchaser, the local
treasurer or his deputy shall immediately return to such purchaser
the entire amount paid by him plus interest of not more than 2% per
month. Consequently, the property shall be free from lien of such
delinquent tax, interest due thereon and expenses of sale.
Right to Possession and Income within the Period of
Redemption From the date of sale until the expiration of the period
of redemption, the delinquent real property shall be in possession of
the owner or person having legal interest therein who shall be entitled
to the income and other fruits thereof.
SECTION 262. Final Deed to Purchaser. - In case the owner or person

having legal interest fails to redeem the delinquent property as provided
herein, the local treasurer shall execute a deed conveying to the
purchaser said property, free from lien of the delinquent tax, interest due
thereon and expenses of sale. The deed shall briefly state the proceedings
upon which the validity of the sale rests.
ARTICLE 353. Final Deed to Purchaser. In case the owner or person
having legal interest therein fails to redeem the delinquent property as
provided herein, the local treasurer shall execute a deed conveying to the
purchaser said property, free from lien of the delinquent tax, interest due
Failure of the owner or person having legal interest therein to redeem

the delinquent property within 1 year from the time such property is
sold at public auction entitles the purchaser the full ownership thereof
and authorizes the local treasurer concerned to execute the final deed

in favor of the purchaser. The final deed shall briefly state the
proceedings upon which the validity of the sale rests.
II. JUDICIAL ACTION
SECTION 266. Collection of Real Property Tax Through the Courts.

- The local government unit concerned may enforce the collection of the
basic real property tax or any other tax levied under this Title by civil
action in any court of competent jurisdiction. The civil action shall be filed
by the local treasurer within the period prescribed in Section 270 of this
Code. (Local Government Code)
SECTION 270. Periods Within Which To Collect Real Property
Taxes. - The basic real property tax and any other tax levied under this
Title shall be collected within five (5) years from the date they become
due. No action for the collection of the tax, whether administrative or
judicial, shall be instituted after the expiration of such period. In case of
fraud or intent to evade payment of the tax, such action may be instituted
for the collection of the same within ten (10) years from the discovery of
such fraud or intent to evade payment. The period of prescription within
which to collect shall be suspended for the time during which:
(1) The local treasurer is legally prevented from collecting the tax;
(2) The owner of the property or the person having legal interest therein
requests for reinvestigation and executes a waiver in writing before the
expiration of the period within which to collect; and
ARTICLE 357. Collection of Real Property Tax Through the Courts.

The delinquent basic real property tax or any other tax levied under this
Rule shall constitute a lawful indebtedness of the taxpayer to the LGU.
Collection of such indebtedness can be enforced thru civil action in any
court of competent jurisdiction, as follows:
(a) The provincial or city treasurer, or municipal treasurer of a municipality
of MMA shall furnish the provincial attorney or city or municipal legal
officer a certified statement of delinquency who, within fifteen (15) days
after receipt, shall file the civil action in the name of the province, city, or
municipality in the proper court of competent jurisdiction. The jurisdiction
of the court is determined by the amount sought to be recovered exclusive
of interests and costs. Thus, where the delinquent tax due does not exceed
Ten Thousand Pesos (P10,000.00), the competent court is the municipal or
city trial court, and where the amount due is in excess of Ten Thousand
Pesos (P10,000.00), the proper court is the regional trial court. (b) Where
cognizable in an inferior court, the action must be filed in the municipality
or city where the delinquent property is located. Where the regional trial
court has jurisdiction, the plaintiff LGU shall file the complaint in the city or
Civil Remedies for the Collection of Tax

a. Extra-Judicial remedy of levy
b. Judicial Action
The local government unit concerned may enforce the collection of

the basic real property tax or any other tax levied under this Title by
civil action in any court of competent jurisdiction. The civil action
shall be filed by the local treasurer within five (5) years from the

date they become due or ten (10) years from the discovery of such
fraud or intent to evade payment, in case of fraud.
Grounds for the Suspension of the Running of the Prescriptive
Periods:
1. The local treasurer is legally prevented from collecting the tax;

therein requests for reinvestigation and executes a waiver in
writing before the expiration of the period within which to
collect; and

therein is out of the country or otherwise cannot be located.
Jurisdiction
The jurisdiction of the court is determined by the amount sought to be
recovered exclusive of interests and costs. Thus, where the delinquent
tax due:
a. does not exceed Ten Thousand Pesos (P10,000.00) Municipal
Trial Court
b. amount is in excess of Ten Thousand Pesos (P10,000.00)

Regional Trial Court
Venue
a. Where cognizable in an inferior court - the municipality or city
where the delinquent property is located;
b. Where RTC has jurisdiction the city or province where the

delinquent property is situated.
Regional Trial Courts have jurisdiction over cases involving

enforcement and collection of real property taxes. The conflict in the
provisions on jurisdiction between P.D. 242 (Prescribing the
procedure for administrative settlement or adjudication of disputes,
claims and controversies between or among government offices,
agencies and instrumentalities, including government owned and
controlled corporations) and P.D. 464 (Real Property Tax Code) should
be resolved in favor of the latter law, since it is a special law and of
later enactment. 1
Notes:
1. The Court of Tax Appeals (CTA) has no jurisdiction over civil
actions for collection of taxes. (BP 129, RA 1125 as amended,
Sec. 7 in relation to Sec. 19).
2. The provincial, city or municipal treasurer shall furnish the

provincial attorney or city or municipal legal officer a certified
1 National Power Corporation vs. CA, GR No. L-73477 October 16, 1990.

statement of delinquency and the exact address of the
defendants, where they may be served with summons, who,
within fifteen (15) days after receipt, shall file the civil action in
the proper court of competent jurisdiction.
RESALE OF REAL ESTATE TAKEN FOR TAXES, FEES OR

SECTION 264. Resale of Real Estate Taken for Taxes, Fees, or
Charges. - The Sanggunian concerned may, by ordinance duly approved,
and upon notice of not less than twenty (20) days, sell and dispose of the
real property acquired under the preceding section at public auction. The
proceeds of the sale shall accrue to the general fund of the local
government unit concerned. (Local Government Code)
ARTICLE 355. Resale of Real Estate Taken for Taxes, Fees, or
Charges. The sanggunian concerned may, by a duly approved
ordinance, and upon notice of not less than twenty (20) days, sell and
dispose of the real property acquired under the preceding Article at
CHARGES
Sanggunian concerned may dispose of the real property
acquired, by ordinance duly approved, and upon notice of not
less than twenty (20) days at public auction.
The proceeds of the sale shall accrue to the general fund of the
local government unit concerned.
FURTHER LEVY UNTIL FULL PAYMENT OF AMOUNT DUE

SECTION 265. Further Distraint or Levy. - Levy may be repeated if
necessary until the full due, including all expenses, is collected. (Local
Government Code)
ARTICLE 356. Further Distraint or Levy. Levy may be repeated if
necessary on the same property subject to tax until the full amount due,
including all expenses, is collected. (IRR of the Local Government Code)

SPECIAL RULES ON ACTIONS INVOLVING REAL PROPERTY
Deposit required for actions assailing validity of tax sale
SECTION 267. Action Assailing Validity of Tax Sale. - No court shall

entertain any action assailing the validity of any sale at public auction of
real property or rights therein under this Title until the taxpayer shall
have deposited with the court the amount for which the real property was
sold, together with interest of two percent (2%) per month from the date
of sale to the time of the institution of the action. The amount so
deposited shall be paid to the purchaser at the auction sale if the deed is
declared invalid but it shall be returned to the depositor if the action fails.
Neither shall any court declare a sale at public auction invalid by reason
of irregularities or informalities in the proceedings unless the substantive
rights of the delinquent owner of the real property or the person having
legal interest therein have been impaired. (Local Government Code)
ARTICLE 358. Action Assailing Validity of Tax Sale. (a) No court

shall entertain any action assailing the validity of any sale at public
auction of real property or rights therein under this Rule until the
taxpayer shall have deposited with the court the amount for which the
real property was sold, together with interest of two percent (2%) per
month from the date of sale to the time of the institution of the action. The
amount so deposited shall be paid to the purchaser at the auction sale if
the deed is declared invalid but it shall be returned to the depositor if the
The Court shall entertain any action assailing the validity of any sale
at public auction of real property or rights therein until the taxpayer
shall have deposited with the court the amount for which the real
property was sold together with interest of two percent (2%) per
month from date of sale to the time of institution of action.
The deposit of the amount for which the property was sold plus
interest equivalent to two percent (2%) per month required under
Section 267 of the LGC is a jurisdictional requirement, the non-
payment of which warrants the dismissal of the action.2
Sec. 83 of P.D. 464 (now Sec 267 of the LGC) may only be used in a
voidable tax sale. When the sale is void because the property
subjected to real estate is not situated within the jurisdiction of the
taxing authority, the provision cannot be invoked.3
Payment of Deliquent Taxes on Property subject of Controversy
SECTION 268. Payment of Delinquent Taxes on Property Subject of

Controversy. - In any action involving the ownership or possession of, or
succession to, real property, the court may, motu propio or upon
representation of the provincial, city, or municipal treasurer or his deputy,
award such ownership, possession, or succession to any party to the
action upon payment to the court of the taxes with interest due on the
property and all other costs that may have accrued, subject to the final
outcome of the action. (Local Government Code)
ARTICLE 359. Payment of Delinquent Taxes on Property Subject of

Controversy. In any action involving the ownership or possession of, or
2 Sps. Wong vs City of Iloilo, GR No. 161748, July 3, 2009
succession to, real property the court may, motu proprio or upon
representation of the provincial, city, or municipal treasurer or their
City Govtdeputies,
3respective of Tagaytay vs such
award Hon Guerrero,
ownership, GR Nos. 140743,140745,
possession, or succession to
any party to the action upon
141451-52, September 17, 2009 payment to the court of the taxes with

V. REFUND OR CREDIT OF REAL PROPERTY TAX
1. Payment of Real Properties under Protest
Requisites in payment of real properties under protest:

The taxpayer must indicate the amount or portion he is
protesting;
Indicate that the said amount was paid under protest
File protest with the local treasurer
Must be filed in writing within 30 days from payment
Section 252. Payment Under Protest. -

(a) No protest shall be entertained unless the taxpayer first pays the tax.
There shall be annotated on the tax receipts the words "paid under protest".
The protest in writing must be filed within thirty (30) days from payment of
the tax to the provincial, city treasurer or municipal treasurer, in the case of a
municipality within Metropolitan Manila Area, who shall decide the protest
within sixty (60) days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in trust by
the treasurer concerned.
(c) In the event that the protest is finally decided in favor of the taxpayer, the
amount or portion of the tax protested shall be refunded to the protestant, or
applied as tax credit against his existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the sixty day
No protest shall be entertained unless the tax is first paid.
The Trial Court has no jurisdiction to issue a writ of

prohibition which seeks to set aside the warrant of garnishment
over petitioners bank deposit in satisfaction of real property
taxes without paying first under protest the tax assessed and
without exhausting available administrative remedies.
The local treasurer shall decide the protest within 60 days
from receipt. (MERALCO VERSUS NELIA BARIS, GR NO.
114231, MAY 18, 2001)
NOTE:
Section 64 of the RPTC, prohibits any courts from declaring any
tax invalid by reason of irregularities in the proceedings of the officers
charged with the assessment or collection of taxes except upon the
condition that the taxpayer pays the just amount of the tax, as
determined by the court in the pending proceeding.
If the taxpayer failed to make a protest payment of the tax

assessed, any argument regarding the procedure that should have
been observed in the preparation of the notice of assessment and
collection is futile as the trial court in such a scenario cannot assume
jurisdiction over the matter.
N.B. This ruling was cited prior to the effectivity of RA 7160.

Thus, should the taxpayer/real property owner question the

excessiveness or reasonableness of the assessment,
Section 252 directs that the taxpayer should first pay the tax
due before his protest can be entertained. There shall be
annotated on the tax receipts the words "paid under protest." It
is only after the taxpayer has paid the tax due that he may file a
protest in writing within thirty days from payment of the tax to
the Provincial, City or Municipal Treasurer, who shall decide the
protest within sixty days from receipt. In no case is the local
treasurer obliged to entertain the protest unless the tax due has
been paid.
If the local treasurer denies the protest or fails to act upon it

within the 60-day period provided for in Section 252, the
taxpayer/real property owner may then appeal or directly file a
verified petition with the LBAA within sixty days from denial of
the protest or receipt of the notice of assessment, as provided in
Section 226 of R.A. No. 7160. (OLIVARES VS MARQUEZ, GR
NO. 155591, SEPTEMBER 22, 2004)
2. Repayment of excessive collections
SEC. 253. Repayment of Excessive Collections. When an assessment of

basic real property tax, or any other tax levied under this Title, is found to be
illegal or erroneous and the tax is accordingly reduced or adjusted, the
taxpayer may file a written claim for refund or credit for taxes and
interests with the provincial or city treasurer within two (2) years from the
date the taxpayer is entitled to such reduction or adjustment.
The provincial or city treasurer shall decide the claim for tax refund or
credit within sixty (60) days from receipt thereof. In case the claim for
tax refund or credit is denied, the taxpayer may avail of the remedies
Under Section 253 of the Local Government Code, the claim for
refund or credit for taxes must be filed before the city treasurer who
shall decide the claim based on the tax declarations, affidavits,
documents and other documentary evidence to be presented by
petitioner.
VI. TAXPAYERS REMEDIES
I. ADMINISTRATIVE
A. PROTEST by:
1. Any owner or person having legal interest in the property
who is not satisfied with the action of the assessor in the
assessment of his property; or
2. Any owner of real property affected by a special levy or any

person having legal interest therein may protest the
assessment by filing an appeal to the Local Board of
Assessment Appeals within 60 days from receipt of notice of
the assessment. (Sec 226 and 244, LGC)
1. Contesting an assessment of value of real property

Section 195. Protest of Assessment. - When the local treasurer or his
duly authorized representative finds that correct taxes, fees, or charges
have not been paid, he shall issue a notice of assessment stating the nature
of the tax, fee, or charge, the amount of deficiency, the surcharges,
interests and penalties. Within sixty (60) days from the receipt of the notice
of assessment, the taxpayer may file a written protest with the local
treasurer contesting the assessment; otherwise, the assessment shall
become final and executory. The local treasurer shall decide the protest
within sixty (60) days from the time of its filing. If the local treasurer finds
the protest to be wholly or partly meritorious, he shall issue a notice
cancelling wholly or partially the assessment. However, if the local
treasurer finds the assessment to be wholly or partly correct, he shall deny
the protest wholly or partly with notice to the taxpayer. The taxpayer shall
have thirty (30) days from the receipt of the denial of the protest or from
the lapse of the sixty (60) day period prescribed herein within which to
appeal with the court of competent jurisdiction otherwise the assessment
becomes conclusive and unappealable.
Who may contest:

Any owner or person having legal interest in the property who is
not satisfied with the assessment of his property may file a written
protest with the local treasurer contesting the assessment.
When to file the protest:
Within sixty (60) days from the receipt of the notice of
assessment.
-The treasurer shall decide the protest within sixty (60) days from the
time of its filing and can wholly or partially cancel the assessment.
Prescriptive period to file appeal :
Thirty (30) days from the receipt of the denial of the protest OR
Sixty (60) days from the filing of the protest in case there is
inaction on the part of the local treasurer.
a. Appeal to the Local Board of Assessment Appeals
Section 226. Local Board of Assessment Appeals. - Any owner or

person having legal interest in the property who is not satisfied with the
action of the provincial, city or municipal assessor in the assessment of
his property may, within sixty (60) days from the date of receipt of the
written notice of assessment, appeal to the Board of Assessment Appeals
of the provincial or city by filing a petition under oath in the form
prescribed for the purpose, together with copies of the tax declarations
and such affidavits or documents submitted in support of the appeal
Composition of the Local Board of Assessment Appeals (LGC

IRR Art.318)
1. Registrar of Deeds
2. Provincial or City Prosecutor
3. Provincial or City Engineer
i. Action by Local Board of Assessment Appeals

Section 229. Action by the Local Board of Assessment Appeals. -
(a) The Board shall decide the appeal within one hundred twenty (120)
days from the date of receipt of such appeal. The Board, after hearing,
shall render its decision based on substantial evidence or such relevant
evidence on record as a reasonable mind might accept as adequate to
support the conclusion.
(b) In the exercise of its appellate jurisdiction, the Board shall have the
power to summon witnesses, administer oaths, conduct ocular
inspection, take depositions, and issue subpoena and subpoena duces
tecum. The proceedings of the Board shall be conducted solely for the
purpose of ascertaining the facts without necessarily adhering to
technical rules applicable in judicial proceedings.
(c) The secretary of the Board shall furnish the owner of the property or
the person having legal interest therein and the provincial or city
assessor with a copy of the decision of the Board. In case the provincial
or city assessor concurs in the revision or the assessment, it shall be his
duty to notify the owner of the property or the person having legal
interest therein of such fact using the form prescribed for the purpose.
The owner of the property or the person having legal interest
therein or the assessor who is not satisfied with the decision of
the Board, may, within thirty (30) days after receipt of the
decision of said Board, appeal to the Central Board of Assessment
Appeals, as herein provided. The decision of the Central Board
shall be final and executory.

b. Appeal to the Central Board of Assessment Appeals
Section 230. Central Board of Assessment Appeals. - The Central
Board of Assessment Appeals shall be composed of a chairman, and two
(2) members to be appointed by the President, who shall serve for a term
of seven (7) years, without reappointment. Of those first appointed, the
chairman shall hold office for seven (7) years, one member for five (5)
years, and the other member for three (3) years. Appointment to any
vacancy shall be only for the unexpired portion of the term of the
predecessor. In no case shall any member be appointed or designated in a
temporary or acting capacity. The chairman and the members of the
Board shall be Filipino citizens, at least forty (40) years old at the time of
their appointment, and members of the Bar or Certified Public
Accountants for at least ten (10) years immediately preceding their
appointment. ... The Board shall have appellate jurisdiction over all
assessment cases decided by the Local Board of Assessment Appeals.
There shall be Hearing Officers to be appointed by the Central Board of
Assessment Appeals pursuant to civil service laws, rules and regulations,
one each for Luzon, Visayas and Mindanao, who shall hold office in
Manila, Cebu City and Cagayan de Oro City, respectively, and who shall
serve for a term of six (6) years, without reappointment until their
successors have been appointed and qualified. The Hearing Officers shall
have the same qualifications as that of the Judges of the Municipal Trial
Courts.
The Central Board Assessment Appeals, in the performance of its powers
and duties, may establish and organize staffs, offices, units, prescribe the
titles, functions and duties of their members and adopt its own rules and
regulations.
Unless otherwise provided by law, the annual appropriations for the
Central Board of Assessment Appeals shall be included in the budget of
the Department of Finance in the corresponding General Appropriations
Act.
c. Effect of Appeal on the Payment of Real Property Tax

Section 231. Effect of Appeal on the Payment of Real Property Tax. -
Appeal on assessments of real property made under the provisions of this
Code shall, in no case, suspend the collection of the corresponding realty
taxes on the property
During the pendency of appeal on assessments of real property,

collection of the corresponding realty taxes will not be suspended
without prejudice to the subsequent adjustment depending upon the
final outcome of the appeal. However, where the taxpayer has shown a
clear and unmistakable right to refuse or to hold in abeyance of taxes,
an injunction can be granted.
Discussion:
Republic Act No. 7160 or the Local Government Code

of 1991, clearly sets forth the administrative remedies available to a
taxpayer or real property owner who is not satisfied with the

assessment or reasonableness of the real property tax sought to be
collected. The Supreme Court outlined said remedies, to wit:
Should the taxpayer/real property owner question

the excessiveness or reasonableness of the assessment,
Section 252 directs that the taxpayer should first pay the
tax due before his protest can be entertained. There shall
be annotated on the tax receipts the words paid under
protest. It is only after the taxpayer has paid the tax due
that he may file a protest in writing within thirty days
from payment of the tax to the Provincial, City or
Municipal Treasurer, who shall decide the protest within
sixty days from receipt. In no case is the local treasurer
obliged to entertain the protest unless the tax due has
been paid.
If the local treasurer denies the protest or fails to

act upon it within the 60-day period provided for in
Section 252, the taxpayer/real property owner may then
appeal or directly file a verified petition with the Local
Board of Assessment Appeals (LBAA) within sixty days
from denial of the protest or receipt of the notice of
assessment, as provided in Section 226 of R.A. No. 7160[.]
And, if the taxpayer is not satisfied with the decision

of the LBAA, he may elevate the same to the Central
Board of Assessment Appeals (CBAA), which exercises
exclusive jurisdiction to hear and decide all appeals from
the decisions, orders and resolutions of the Local Boards
involving contested assessments of real properties, claims
for tax refund and/or tax credits or overpayments of taxes.
An appeal may be taken to the CBAA by filing a notice of
appeal within thirty days from receipt thereof.
From the Central Board Assessment Appeals, the dispute may

then be taken to the Court of Tax Appeals by filing a verified petition
for review under Rule 42 of the Revised Rules of Court; to the Court of
tax Appeals en banc; and finally to the Supreme Court via a petition
for review on certiorari pursuant to Rule 45 of the Revised Rules of
Court. (City of Pasig vs. Republic of the Philippines, G.R. 185023)
2. Payment of real property tax under protest

a. File protest with local treasurer.
SEC. 252. Payment Under Protest. - (a) No protest shall be entertained

unless the taxpayer first pays the tax. There shall be annotated on the tax
receipts the words "paid under protest". The protest in writing must be filed
within thirty (30) days from payment of the tax to the provincial, city
treasurer or municipal treasurer, in the case of a municipality within
Metropolitan Manila Area, who shall decide the protest within sixty (60)
days from receipt.
(b) The tax or a portion thereof paid under protest, shall be held in trust by
(c) In the event that the protest is finally decided in favor of the taxpayer,
the amount or portion of the tax protested shall be refunded to the
protestant,
Atty. or applied
Geoff Lyn as tax credit against
D. San Agustin his existing or future tax liability.
Page 61
ARTICLE 343. Payment Under Protest. (a) No protest shall be

entertained unless the taxpayer first pays the tax. There shall be annotated
on the tax receipts the words paid under protest. The protest in writing must
be filed within thirty (30) days from payment of the tax to the provincial or
city treasurer, or municipal treasurer, in the case of a municipality within
MMA, who shall decide the protest within sixty (60) days from receipt.
(b) The tax or a portion thereof paid under protest shall be held in trust by
the local treasurer concerned. Fifty percent (50%) of the tax paid under
protest shall, however, be distributed in accordance with the provisions of
this Rule on the distribution of proceeds.
(c) In the event that the protest is finally decided in favor of the taxpayer, the
amount or portion of the tax protested shall be refunded to the protestant, or
applied as tax credit against his existing or future tax liability.
(d) In the event that the protest is denied or upon the lapse of the sixty-day
Payment under protest refers to the requirement by Section 252 of
the Local Government Code that the taxpayer first pays the tax. The
protest may only be filed within thirty (30 days) from the payment of
the tax. Thereafter, the words paid under protest shall be annotated
on the tax receipt. The tax or a portion thereof paid under protest
shall be held in trust by the treasurer concerned.
The protest contemplated in Sec. 252 of the LGC is needed when
where there is a question as to the reasonableness of the amount
assessed, not where the question raised is on the very authority and
power of the assessor to impose the assessment and of the treasurer
to collect the tax.
Note: In the event that the protest is finally decided in favor of the
taxpayer, the amount or portion of the tax protested shall be refunded
to the protestant, or applied as tax credit against his existing or future
tax liability.
b. Appeal to the Local Board of Assessment Appeals
SEC. 226. Local Board of Assessment Appeals. - Any owner or person

having legal interest in the property who is not satisfied with the action of
the provincial, city or municipal assessor in the assessment of his property
may, within sixty (60) days from the date of receipt of the written notice of
assessment, appeal to the Board of Assessment appeals of the province or
city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or
documents submitted in support of the appeal.
ARTICLE 317. Local Board of Assessment Appeals. (a) Any property
owner or person having legal interest or claim in the property who is not
satisfied with the assessment of his property made by the provincial, city, or
municipal assessor pursuant to the provisions of this Rule may, within sixty
(60) days from the date of receipt of the written notice of assessment, appeal
to local board of assessment appeals of the province or city where the
subject property is situated by filing a petition under oath in the standard
Who may protest an assessment and when:

Any owner or person having legal interest in the property who is not
satisfied with the action of the provincial, city or municipal assessor in
the assessment of his property may, within sixty (60) days from the
date of receipt of the written notice of assessment appeal t the Local
Board of Assessment appeals of the province or city by filing a petition
under oath in the form prescribed for the purpose, together with
copies of the tax declarations and such affidavits or documents
submitted in support of the appeal.
Composition of the LBAA:
1. The Registrar of Deeds, as Chairman;
2. The provincial or city prosecutor as member;
3. The provincial or city engineer as member. (Sec. 227, LGC)
Term of Office: Co-terminus with their term as Register of Deeds,

Prosecutor or Provincial/City Engineer
Meetings: The Boaard of LBAA shall meet once a month and as often
as necessary.
Jurisdiction of the LBAA
Jurisdiction to hear appeals of owners or persons having legal interest
in the property who are not satisfied with the action of the assessor on
an assessment.
The LBAA shall have the power to summon witnesses, administer
oaths, conduct ocular inspection take depositions, and issue subpoena
and subpoena duces tecum. The proceedings of the Boards shall be
conducted solely for the purpose of ascertaining the facts without
necessarily adhering to technical rules applicable in judicial
proceedings. (Sec. 229(b), LGC)
SEC. 230.
NOTE: No Central Board
motion for of Assessment
reconsideration of appeals.- The decision
the adverse Central Board
of theof
Assessment
local appeals shall the
assessor/treasurer; be composed
remedy isoftoa appeal
chairman
to and two (2) members
the LBAA.
to be appointed by the President, who shall serve for a term of seven (7)
The lastwithout
years, action reappointment.
of the local assessor
Of thoseon a particular
first appointed, assessment
the chairmanshallshall
be theoffice
hold notice of assessment;
for seven it is
(7) years, one this last
member action
for five which
(5) years, andgives the
the other
member for three (3) years. Appointment to any vacancy
owner of the property the right to appeal to the LBAA. The procedure shall be only for
the unexpired
likewise does notportion of the
permit theterm of the predecessor.
property In no case
owner the remedy of shall
filinganya
member be appointed or designated in a temporary
motion for reconsideration before he local assessor. Read: FELSor acting capacity. The
chairmanInc.
Energy and the
vs. members of the Board
The Province shall be Filipino
of Batangas, GR citizens,
No. 168557at least
forty (40) years old at the time of their appointment, and members of the
February 16, 2007
Bar or Certified Public Accountants for at least ten (10) years immediately
preceding their appointment. The chairman of the Board of Assessment
appeals shall have the salary grade equivalent to the rank of Director III
Period for Salary
under the the decision of an appeal
Standardization Law exclusive of allowances and other
emoluments. The members of the Board shall have the salary grade
The LBAA shall decide the appeal within one hundred twenty (120)
equivalent to the rank of Director II under the Salary Standardization Law
days from the
exclusive date of receipt
of allowances and of suchemoluments.
other appeal. The Board, aftershall
The Board hearing,
have
shall render
appellate its decision
jurisdiction over allbased on substantial
assessment evidence
cases decided or Board
by the Local such
relevant evidence
of Assessment on record as a reasonable mind might accept as
appeals.
adequate to support the conclusion. (Sec. 229(a), LGC)
There shall be Hearing Officers to be appointed by the Central Board of
c.Assessment
Appeal toappeals
the Central Board
pursuant of Assessment
to civil service laws, Appeals
rules and regulations,
one each for Luzon, Visayas and Mindanao, who shall hold office in Manila,
Cebu City and Cagayan de Oro City, respectively, and who shall serve for a
term of six (6) years, without reappointment until their successors have
been appointed andAgustin
qualified. The Page
Hearing
Atty. Geoff Lyn D. San 63 Officers shall have the same
qualifications as that of the Judges of the Municipal Trial Courts.
The Hearing Officers shall each have the salary grade equivalent to the rank
of Director I under the Salary Standardization Law exclusive of allowances

ARTICLE 321. Central Board of Assessment Appeals. The Central
Board shall be composed of a chairman and two (2) members to be
appointed by the President, who shall serve for a term of seven (7) years,
without reappointment. Of those first appointed, the chairman shall hold
office for seven (7) years, one member for five (5) years, and the other
member of three (3) years. Appointment to any vacancy shall be only for the
unexpired portion of the term of the predecessor. In no case shall any
member be appointed or Filipino citizens, at least forty(40) years old at the
time of their appointment, and members of the Bar or Certified Public
Accountants for at least ten (10) years immediately preceding their
appointment. The chairman of the Central Board shall have the salary grade
equivalent to the rank of Director III under the Salary Standardization Law
exclusive of allowances and other emoluments. The members of the Central
Board shall have the salary grade equivalent to the rank of Director II under
the Salary Standardization Law exclusive of allowances and other
emoluments. The Central Board shall have appellate jurisdiction over all
assessment cases decided by the local board and assessment appeals.
There shall be hearing officers to be appointed by the Central Board
pursuant to civil service law, rules and regulations, one each of Luzon,
Visayas, and Mindanao, who shall hold office in the City of Manila, Cebu
City, and Cagayan de Oro City, respectively, and who shall serve for a term
of six (6) years, without reappointment until their successors shall have
been appointed and qualified. The hearing officers shall have the same
qualifications as those of the Judges of the Municipal Trial Courts. The
hearing officers shall each have a salary grade equivalent to the rank of
Director I under the Salary Standardization Law exclusive of allowances and
Who may appeal and when:

The owner of the property or the person having legal interest therein
or the assessor who is not satisfied with the decision of the Board
may, within thirty (30) days after receipt of the decision of said Board,
appeal to the Central Board of Assessment Appeals, as herein
provided. The decision of the Central Board shall be final and
executor.
Composition of the CBAA
1. A Chairman; and
2. Two (2) members. (Sec. 230, LGC)
Term of Office: Seven (7) years without reappointment.
Requirements for Chairman and Members:
1. Filipino Citizens;
2. 40 years of age;
3. Members of the Bar or Certified Public Accountants for at
least 10 years immediately preceding their appointment.
Hearing Officers (3): Appointed by CBAA. They will hold office in
1. Luzon Manila
2. Visayas Cebu City
3. Mindanao Cagayan de Oro City
Term of Office: Six (6) years without reappointment

Qualifications: Same qualifications as judges of MTC
Jurisdiction of the CBAA

Jurisdiction to hear appeals from the decision of Local Board of
Assessment Appeals. (Sec. 229(c), LGC)
d. Appeal to the Court of Tax Appeals (RA 1125, as amended)
"Sec. 7. Jurisdiction. - The CTA shall exercise:

"a. Exclusive appellate jurisdiction to review by appeal, as herein
provided:
XX
5. Decisions of provincial or city Boards of Assessment Appeals in
cases involving the assessment and taxation of real property or other
matters arising under the Assessment Law, including rules and
regulations relative thereto.
XX
With respect to decisions or rulings of the Central Board of

Assessment Appeals and the Regional Trial Court in the exercise of its
appellate jurisdiction appeal shall be made by filing a petition for
review under a procedure analogous to that provided for under rule
43 of the 1997 Rules of Civil Procedure with the CTA, which shall hear
the case en banc.
Section 4. Period of appeal. The appeal shall be taken within

fifteen (15) days from notice of the award, judgment, final order or
resolution, or from the date of its last publication, if publication is
required by law for its effectivity, or of the denial of petitioner's
motion for new trial or reconsideration duly filed in accordance with
the governing law of the court or agency a quo. Only one (1) motion
for reconsideration shall be allowed. Upon proper motion and the
payment of the full amount of the docket fee before the expiration of
the reglementary period, the Court of Appeals may grant an
additional period of fifteen (15) days only within which to file the
petition for review. No further extension shall be granted except for
e. Appeal to the Supreme Court

Appeal with the Supreme Court within 15 days.
Guidelines in paying tax under protest
1. No protest shall be entertained unless the taxpayer first pays
the tax. There shall be annotated on the tax receipts the words
paid under protest. The protest in writing must be filed within
30 days from payment of the tax to treasurer who shall decide
the protest within 60 days from receipt.
2. The tax or a portion paid under protest shall be held in trust by

3. In the event that the protest is finally decided in favor of the

taxpayer, the amount or portion of the tax protested shall be
refunded to the protestant, or applied as tax credit against his
existing or future tax liability.
4. In the event that the protest is denied or upon the lapse of the
60 day-period, the taxpayer may avail appeal the assessment
before the LBAA.
5. In case there is adverse decision by the LBAA, the taxpayer

may appeal with the CBAA within 30 days from receipt of the
adverse decision by the LBAA.
PROCEDURE FOR PROTEST OF REAL PROPERTY TAX
1. Assessor submits assessment roll to Local Treasurer.
2. Posting of notice of deadline for payment at a conspicuous place
at the LGU hall OR publish the same in a newspaper of general
circulation in the LGU once a week for 2 consecutive weeks.
3. Local Treasurer collects the tax starting Jan 1 of calendar year.
4. Owner pays the tax. Written protest must be filed within 30 days
from payment before the Local Treasurer.
5. If protest is approved, the amount shall be refunded or applied

as tax credit
6. Taxpayer pays under protest. Protest is then filed within 30 days

from payment of tax to Local Treasurer. Local Treasurer shall
decide within 60 days from receipt.
7. If protest is denied or upon the lapse of the 60 day-period, the

taxpayer may avail appeal the assessment before the LBAA
which shall decide within 120 days from date of receipt of
appeal.
8. If LBAA rejects protest, owner may appeal to CBAA within 30

days from receipt of notice.
9. If CBAA rejects protest, owner may appeal to CTA en banc

within 30 days from receipt of decision (RA 9282).
10. Appeal to SC within 15 days (Rule 43)
B. CLAIM FOR REFUND OR CREDIT
When an assessment of basic real property tax or any other tax

levied is found to be illegal erroneous and the tax is accordingly
reduced or adjusted, the taxpayer may file a written claim for
refund or credit to taxes and interests with the provincial or city
treasurer within 2 years from the date the taxpayer is entitled to
such reduction or adjustment.

The treasurer shall decide the claim within 60 days from receipt
thereof. In case of denial, the taxpayer may appeal to the LBAA
(as in protest cases) and to the CBAA if LBAA gives an adverse
decision.
C. REDEMPTION OF REAL PROPERTY

1. Within 1 year from the date of the sale, the owner of the
delinquent real property or person having legal interest
or his representative shall have the right to redeem the
property upon payment to the local treasurer of the
following:
a. Amount of the delinquent tax;
b. Interest thereon;
c. Expense of sale from date of delinquency to date of
sale; and
d. Interest of not more that 2% per month on the
purchase price from the date of sale to date of
redemption
2. A certificate of redemption shall be issued and the
certificate of sale issued to the purchaser shall be
invalidated.
II. JUDICIAL
A. QUESTION OF LEGALITY OF TAX ORDINANCE

The taxpayer may question the constitutionality or legality of a
tax ordinance on appeal within 30 days from effectivity thereof,
to the Secretary of Justice, who shall render a decision within 60
days from the date of receipt of the appeal.
Within 30 days after the receipt of the decision or the lapse of
the sixty-day period without the Secretary of Justice acting upon
the appeal, the aggrieved party may file appropriate
proceedings with a court of competent jurisdiction (RTC).
The appeal to the Secretary of Justice shall not have the effect
of suspending the effectivity of the ordinance and the accrual
and payment of the tax, fee, or charge levied therein.
B. COURT ACTION
1. Appeal to the Court of Tax Appeals en banc within 30 days
from receipt of in case of adverse decision by the CBAA
(RA 1125, Sec 11 as amended)
2. Appeal by certiorari with the Supreme Court within 15
days from norice in case of adverse decision by the CTA
(Rules of Court, Rule 43, Sec 4)
C. SUIT ASSAILING THE VALIDITY OF THE TAX SALE
No court shall entertain any action assailing the validity of any

sale at public auction of real property or rights therein until the
taxpayer shall have deposited with the court the amount for
which the real property was sold together with interest of 2%
per month from date of sale to the time of institution of action.

The deposit of the amount for which the property was sold plus
interest equivalent to 2% per month required under Sec. 267 of
the LGC is a jurisdictional requirement, the non-payment of
which warrants the dismissal of the action. (Sps. Wong vs. City
of Iloilo GR No. 161748, July 3, 2009)
Note: Sec. 83 of PD 464 (now Sec 2677 of the LGC) may only
be used in a voidable tax sale. When the sale is void because the
property subjected to real estate tax is not situated within the
jurisdiction of the taxing authority, the provision cannot be
invoked (City Govt of Tagaytay vs. Hon. Guerrero GR Nos.
140743, 140745, 141451-52, September 17, 2009)
VII. SPECIAL LEVIES ON REAL PROPERTY

Special Education Fund
Section 235. LCC; Additional Levy on Real Property for the Special Education
Fund (SEF)
A province or city, or a municipality within the Metropolitan Manila Area, may levy
and collect an annual tax of one percent (1%) on the assessed value of real
property which shall be in addition to the basic real property tax. The proceeds
thereof shall exclusively accrue to the Special Education Fund (SEF).
Article 326. IRR; Additional Levy on Real Property for the Special Education Fund
A province or city, or a municipality within MMA, may levy and collect an annual
tax of one percent (1%) on the assessed value of real property which shall be in
addition to the basic real property tax. The proceeds thereof shall exclusively
accrue to the special education fund.
All provinces and cities, and the municipalities within MMA shall enact their
respective tax ordinances imposing the additional for the special education fund
tax.
1 Additional ad valorem tax on idle property
Section 236. LGC; Remedies for the collection of Real Property Tax
For the collection the the real property tax and any other tax levied under this
Title, the local government unit concerned may avail of the remedies by
administrative action through levy on real property or by judicial action.
Article 327. IRR; Additional ad valorem tax on Idle Lands

A province or city, or a municipality within MMA, may levy an annual tax on idle
lands at the rate of not exceeding five percent (5%) of the assessed value of the
property which shall be in addition to the basic real property tax.
a Coverage of idle lands

Section 237. LGC; Idle Lands, Coverage.
For purposes of real property taxation, idle lands shall include the following:
a Agricultural lands, more than one (1) hectare in area, suitable for
cultivation, dairying, inland fishery, and other agricultural uses, one-half
(1/2) oh which remain uncultivated or unimproved by the owner of the
property or person having legal interest therein. Agricultural lands planted
to permanent or perennial crops with at least fifty (50) tress to a hectare
shall not be considered idle lands. Lands actually used for grazing purposes
shall likewise not be considered idle lands.
b Lands, other tha agricultural, located ina city or municipality, more than
one thousand (1,000) square meters in area one-half (1/2) of which remain
unutilized or unimproved by the owner of the property or person having
legal interest therein.
Regardless of land area, this section shall likewise apply to residential lots
in subdivision duly approved by proper authorities, the ownership of which
has been transferred to individual owners, who shall be liable for the
additional tax: Provided, That individual lot os such subdivisions, the
ownership of which has not been transferred to the buyer shall be
considered as part of the subdivision, and shall be subject to the additional
tax payable by subdivision owner or operator.
Article 328. Idle Lands Coverage, IRR (same as Section 237 of LGC)
Purpose of imposing ad valorem taxes on idle land

To penalize property owners who do not use their property
productively. It is also designed to encourage utilization of land
resources in order to contribute to national development.

a Exempt idle lands
Section 238. LGC; Idle Lands Exempt from Tax

A province or city, or a municipality within Metropolitan Manila Area may exempt
idle lands from the additional levy by reason of force majeure, civil disturbance,
natural calamity or nay cause or circumstance which physically or legally prevents
the owner of the property having legal interest therein from improving, utilizing or
cultivating the same.
a Listing of idle lands by the assessor
Section 239. LGC; Listing of Idle Lands by the Assessor

The provincial, city, or municipal assessor shall make and keep an updated record
of all idle lands located within his area of jurisdiction. For purposes od collection,
the provincial, city or municipal assessor shall furnish a copy thereof to the
provincial or city treasurer who shall notify, on the basis of such record, the owner
of the property or person having legal interest therein of the imposition of the
additional tax.
Article 330. IRR Listing of Idle Lands by the Assessor (same as Section 239 of
LGC)
2 Special Levy
A province, city or municipality may impose a special levy on the

lands within its territorial jurisdiction specially benefited by public
works projects or improvements by the LGU concerned.
XPN: It shall not apply to lands exempt from basic real property tax
and the remainder of the land, portions of which have been donated to
the LGU concerned for the construction of such projects or
improvements.
Note: The special levy shall not exceed 60% of the actual cost of such
projects and improvements, including the costs of acquiring land and
such other real property in connection therewith.
The proceeds of the special levy on lands benefited by public
works, projects and other improvements shall accrue to the general
fund of the local government unit which financed such public works,
projects or other improvements.
Section 240. LGC; Special Levy by Local Government Units
A province, city or municipality may impose a special levy on the lands comoprised
within its territorial jurisdiction specially benefited by public works projects or
improvements funded by the local government unit concerned: Provided, however,
That the special levy shell not exceed sixty percent (60%) of the actual cost of such
projects and improvements, including the costs of acquiring land and such other
real property in connection therewith: Provided, further, That the special levy shall
not apply to lands exempt from basic real property tax and the remainder of the
land portions of which have been donated to the local government unit concerned
for the construction of such projects or improvements.
Article 331. IRR; Special Levy by Local Government Units (same as Section 240
of LGC)

a Ordinary/Publication of ordinance imposing special levy
Section 241. LGC; Ordinance Imposing a Special Levy

A tax ordinance imposing a special levy shall describe with reasonable accuracy
the nature, extent and location of public works projects or improvements to be
undertaken, state the estimated cost thereof, specify the metes and bounds by
monuments and lines and the number of annual installments for the payment of
the special levy which in no case shall be less than five (5) nor more than ten
(10)years. The sanggunian concerned shall not be obliged, in the apportionment
and computation of the special levy, to establish a uniform percentage of all lands
subject to the payment of the tax for the entire district, but it may fix different
rates for different parts or sections thereof, depending on whether such land is
more or less benefited by the proposed work.
Section 242. LGC; Publication of Proposed Ordinance Imposing a Special Levy

Before the enactment of an ordinance imposing a special levy, the sanggunian
concerned shall conduct a public hearing thereon; notify in writing the owners of
the real property to be affected or the persons having legal interest therein as to
date and place thereof and afford the latter the opportunity to express their
positions or objections relative to the proposed ordinance.
Article 332-333. IRR; (same as Section 241-242 of LGC)
Fixing the amount of special levy and sending out notice;

Taxpayers remedies against special levy
SEC. 243. Fixing the Amount of Special Levy. - The special levy
authorized herein shall be apportioned, computed, and assessed according
to the assessed valuation of the lands affected as shown by the books of the
assessor concerned, or its current assessed value as fixed by said assessor
if the property does not appear of record in his books. Upon the effectivity
of the ordinance imposing special levy, the assessor concerned shall
forthwith proceed to determine the annual amount of special levy assessed
against each parcel of land comprised within the area especially benefited
and shall send to each landowner a written notice thereof by mail, personal
service or publication in appropriate cases. (Article 334, IRR)
SEC. 244. Taxpayers' Remedies Against Special Levy. - Any owner of
real property affected by a special levy or any person having a legal
Note: Under Article 335 of the IRR, the remedies pertained to

are those provided in Article 317 of the IRR.
Article 317. Local Board Assessment Appeals.
(a) Any property owner or person having legal interest or claim
in the property who is not satisfied with the assessment of his
property made by the provincial, city or municipal assessor
pursuant to the provisions of this Rule may, within sixty (60)
days from the date of receipt of the written notice of
assessment, appeal to local board of assessment appeals of
the province or city where the subject property is situated by
filing a petition under oath in the standard form prescribed
therefore, together with copies of the tax declaration and
such affidavits or documents in support of the appeal.

(b) In the case of municipalities within MMA, the appeals may
be filed with the municipal board of assessment appeals of
each municipality as provided in Article 318 of this Rule.
Accrual of Special Levy
SEC. 245. Accrual of Special Levy. -The special levy shall accrue on
the first day of the quarter next following the effectivity of the ordinance

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Real Property Taxation

REAL PROPERTY TAXES

The present law on real property taxation (RA 7160, Local

Local Government Units responsible for the administration of

Definition of Real Property

Art. 415. The following are immovable property

3. Everything attached to an immovable in a fixed manner, in such

4. Statutes, reliefs, paintings, or other objects for use or

5. Machinery, receptacles, instruments or implements intended by

6. Animal houses, pigeon-houses, beehives, fish ponds or breeding

Atty. Geoff Lyn D. San Agustin Page 1

9. Docks and structures which, though floating, are intended by

In Mindanao Bus Co. vs. City Assessor of Cagayan de Oro (1997),

Improvement is a valuable addition made to a property or an

Requisites for taxability of an improvement

1. Must enhance the value of the property

NOTE: Whenever real property has been divided into condominium,

Personal properties defined under the Civil Code are considered

Properties considered as personal under the Civil Code may

Atty. Geoff Lyn D. San Agustin Page 2

Theory of Real Property Taxes

2. Benefit theory: Tax revenue is used to finance local

Atty. Geoff Lyn D. San Agustin Page 3

2. In addition to the basic real property tax, special levies may be

REAL PROPERTY SUBJECT TO TAX

Atty. Geoff Lyn D. San Agustin Page 4

ARTICLE 289. Fundamental Principles. The appraisal, assessment,

The appraisal, assessment, levy and collection of real property for

Atty. Geoff Lyn D. San Agustin Page 5

POWER TO LEVY REAL PROPERTY TAX

ARTICLE 323. Power to Levy Real Property Tax. Provinces and

Atty. Geoff Lyn D. San Agustin Page 6

Ordinance imposing special levy for public works must contain

1. The ordinance shall

a. Describe the nature, extent, and location of the project

2. It must state the number of annual installments, not less than

NOTE: In the apportionment of special levy, Sanggunian may fix

3. Notice to the owners and public hearing (Sec. 242, LGC)

4. Owner can appeal to the LBAA and CBAA

Special levy or special assessment by LGUs

A province, city or municipality may impose a special levy on the

EXCEPTION: It shall not apply to lands exempt from basic real

Atty. Geoff Lyn D. San Agustin Page 7

Additional levy on real property for the Special Education Fund

A province, city or a municipality within the Metro Manila area may

Additional ad valorem tax on idle lands

A province or city or a municipality within the Metro Manila area may

NOTE: Agricultural lands planted to permanent or perennial crops

2. Lands other than agricultural:

a. Located in a city or municipality

Regardless of land area, this Section shall apply to residential lots in

Causes for exemption from idle lands tax

Atty. Geoff Lyn D. San Agustin Page 8

Purpose of imposing ad valorem taxes on idle land

To penalize property owners who do not use their property

EXEMPTION FROM REAL PROPERTY TAXES

ARTICLE 325. Exemption from Payment of Real Property Tax. The

Atty. Geoff Lyn D. San Agustin Page 9

Under Section 234 of the Local Government Code of the Philippines,

1. RPT exemption on government real properties

Under this, a government owned property used in furtherance of its

Pursuant to Sec. 33 of P.D. 1146, GSIS enjoyed tax exemption from

While it is true that carriageways and terminal stations are anchored,

2. RPT exemptions on religious, charitable and educational