id within six (6) years from the payment th f

· d b' · (A
o in e iti rt.1145, Civil Code ofth Ph T
ereo as a case of
. .
,'ls v. City of.Manila, 7 SCRA 970). e i ippines; Puyat

CHAPTER XXXIII
REAL PROPERTY TAX

Nature of Real Property Tax

The real property tax is a tax on property. It has been considered
as a national, not a local, tax. The realty tax is enforced throughout
the Philippines and not merely in a particular municipality or city,
but the proceeds of the tax accrue to the province, city, municipality
and barrio where the realty taxed is situated (Sec. 86, P.D. 464). In
contrast, a local tax is imposed by municipal or city council by virtue
of the Local Tax Code, P.D. 231 which took effect on July 1, 1973
(69 O.G. 6197) (Meralco Securities Industrial Corporation v.
Central Board of Assessment Appeals, G.R . No. L-46245, May
31, 1982). It has always been imposefh¥ the national lawmaking
body. It is enforced through the Philippines and not in a particular
· political subdivision, although the· bulk of the tax proceeds accrue
•to the various local government units where the property is located
(Secs. 233 and 271, LGC).

Accrual and Payment of Tax

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
encumbrances of any kind whatsoever, shall be enforceable against the
property, by administrative or judicial action, whether in the possession
of the delinquent or any subsequent owner or possessor, and shall be
removable only by the payment of the delinquent taxes and the related
interest and expenses (Sec: 246, relation to S ec. 257, LGC).
Real property taxes may, in the discretion of the taxpayer, be
paid without penalty in four ~qua) installments, the first installmen t
to be due and payable on or before March 31; the second installment,
on or before June 30; the third installment, on or before September

777
 780 REvlEwER ON TAXATION

LocAL GoVERNMENT CODE

781
Real Property Tax
ordinance ir:"p~sing _a_special levy, it shall conduct.f!.J}ublic hearing
thereon; notify,..!n wnting the owners of the real property to be affected Suggested answer:
or the persons having legal interest therein as to the date and place
there~{ a:"d afford_the latter the!!!J.portunity to exeess their positions Not all local government u,nits may do so. Only provinces, cities,
or ob1ectwns relative-to the proposed ordinance (Sec. 242, LGC). and municipalities withJ!} the Metro Manila area (Sec . 232, LGC)
may impose an.ad valorem tax not exceeding five percent (5%) of the
assessed value (Sec. -2 36, LGC) of iale or vacant residential lots in a
Bar Question (1991)
subdivision, duty approved by proper authorities regardless of area
In view of the street widening and cementing of roads and the (Sec. 237, LGC).
improvement of drainage and sewers in the district of Ermita, the
City Council of the City of Manila pa~sed an ordinance imposing Real Property Subject to Tax
and collecting a special lelcy on lands in the district. Jose Reyes, a The real property tax is imposed on real property such as
landowner and resident of Ermita, submitted a protest against the land, buildings, machinery ·a nd other improvements not otherwise
special levy fifteen (15) days after the last publication of the ordinance specifically exempted under the Code (Sec. 232, LGC) .
alleging that the special levy was exorbitant since the rate thereof
was more than the maximum rate of two pe~ceilt (2%) of the assessed The term "machinery" embraces machines , equipment,
value of the real properties allowed by Section 39 of Presidential mechanical contrivances, instruments, appliances or apparatus
Decree No. 464, as amended: which may or may not be attached, permanently or temporarily to
the real property. It includes the physical facilities , for production,
Assuming that Jose Reyes is able to prove that the rate of the the installations and appurtenant service facilities; those which are
special levy is more than the aforesaid percentage limitation of 2%, mobile, self-powered or self-propelled and not pennanently attached
will his protest prosper? to the real property but are actually, directly and essentially used to
meet the needs of the particular industry, business or activity, and
Suggested answer: which by their very nature and purpose are designed for, or necessary
The special levy under the Real Property Tax Code on lands, to its manufacturing, mining, commercial, industrial or agricultural
specially benefited by the proposed infrastructure, may not exceed 60% purposes (Sec. 199[o], LGC).
ofthe cost ofsaid improvement. All lands comprised within the district The term "improvements" refers to valuable addition made to a
benefited are subject to the special levy except lands exempt from the property or an amelioration in its condition, amounting to more than
real property tax (Sec. 47, Real Property Tax). The protest shall be a mere repair or replacement of parts involving capital expenditures
filed not later than 30 days aftrr: the publication of the ordinance and and labor which is intended to enhance the value, beauty or utility
may be s~',nitted to the City_Sanggunian signed by a majority of the or to adopt it for new or further purpose (Sec . 199[m], LGC) .
landowners affected by the proposed work; If no such protest is filed
in the manner above specified, the city or<Jinance shall become final
Bar Question (2009)
and effective. The levy imposed under the ordinance should Q£.J£.ithin

-
the limit of 60% of the total cost of the proposed.improvement.
The rate of two percent (2%) of the assessed value under Section
39 of P.D. 464 refers to the real property tax and not to special _levies.
Republic Power Corporation (RPC) is a GOCC engaged in the
· supply, generation and transmission of electric power. In 2005, In
order to provide electricity to Southern Tagalog provinces, RPC
entered into an agreement with Jethro Energy Corporation (JEC), for
the lease of JEC's power barges which shall be berth~d at the port of
Bar Question (1991) Batangas City. The contract provides that JEC shall own the power
May local governments impose an annual realty tax in addition to barges and the fixtures, fittings, machinery, and equipment therein ,
the basic real property tax on idle or vacant lots located in residential . all of which JEC shall supply at its own cost, and that JEC shall
s ubdivisions within their respective territorial jurisdictions? operate, manage and maintain the power barges for the purpose of
converting the fuel ofRPC into electricity. The contract also stipulates

b..
 782 REVIEWER ON TAXATION
LocAL GoVERNMENT C ODE 783
Real Property Tax

that all real estate _truces and assessments, rates and other charges, equipment, consisting of underground tanks, elevated tanks, water
in respect of the power barges, shall be for the account ofRPC. tanks, gasoline pumps, computing pumps, water.pumps, car washer,

( In 2007, JEC received an assessment of real property truces on

the po~er b~rges from the Assessor of Batangas City. JEC sought
reconsideration of the assess~ t on the ground that the povx,er barges
car and truck hoists, air compressors and similar articles, installed
by Calte:.c, in its gasoline stati9ns, located on leased land, have been
held ~real property subject to the tax (Caltex Phils . v . Central
Board of Assessment Appeals, 114 SCRA 296).
are exempt from real estate ( \es under Section 234(c) ofR.A. 7160,
as they are actually, directly and exclusively used by RPC, a GOCC . .
BOT Agreement is not merely a Financing Sche_me
Furthermore, even assuming that the power barges are subject to real
property tax, RPC should be held liable therefor, in accordance with , Under the IJ_O'I,.'_~gi::l:l!ilment, can the GOQC (NPC) be deemed
the terms of the lease agreement. Is the contention of JEC correct? the acfa.ial,.direct and exclusive user of ma.c hinery and eql!-~ ~ent
for tax exemption? If not, can it pass on its tax-exempt status to its
Suggested answer: BOT partner, a private corporation, thru the BOT agreement?
· Power barges, which are floatiTJ,JJ and lILOvable, are real property GOCC is exempt from RPT when it owns and/or actually uses the
subject to real propertx tax. Article 415(a) or the New Civil Code machinery and equipment for generation and transmission of electric
provides that "docks and structures which though floating, are power. In this case, it is BPPC, a non-government entity, which owns,
intended by their nature and object to remain at a fixed place on a maintains and operates the machinery and equipment. Using these ,
river, lake, or coast" are considered immovable property ... The _mere it generates electricity, which it then sells to NPC. NPC is not the
understanding of petitioner NPC under the Agreement that it shall registered owner of machinery and equipment. This is confirmed by
be responsible for the payment of real estate taxes and assessments BOT Agreement. Thus, Section 234(c) does not apply.
does not justify its exception. The privilege granted to NPC cannot be
Liability for payment of R:eT is determined ~aw and not by
extended to FELS. The COVW:._ant_d,oas :r:iot bind third persons not privy agreement offfie parties. Ifmust be expressly granted by law.CTax
thereto (FELS Energy, inc.-;_ The Prov. of Batangas, G.R.No. exemption is also not transferable. And it is strictly construed)
16855'!, February 16, 2007).
SC cited FELS Energy v. Prov ofBatangas , where it was provided
Bar Question (2003) that NPC shall pay all of FELS' real estate taxes and assessments.
Exemption of NPC was not r~ognized since it was not the actual,
Under Article 415 of the Civil Code, in order fo.vnachinery and di~ and exclusive ]lsef of the barge. -
equipment to be considered real property, the pieces must be placed by
the owner oAae land and, in addition, must tend to directly meet the That BOT Agreement is merely a financing scheme, where BPPC
need~ of the industry or works carried on by the owner. Oil companies is the financier and NPC is the actual user of properties is belied by
install underground tanks in the gasoline stations Jocated on land the BOT Agret:ment itself. The proponent will construct the project
leased by the oil companies from the owners of the land where the at its own cost and suqsequently operates and manages it. At the end
gasoline stations are located. Are those underground tanks , which of 15 years, the proponent transfers the ownership of the facility to
were not_.1>laced th~re by the owner of the land but which w~e inste.ad NPC. Thus, BPPChas complete ownership- both leg_al and beneficial
pla~d there b~be lessee of the land, considered real property for -of the project (NPC v. CBAA, LBAA-La Union, G.R. No.171470,
purposes ofreal property taxation under the Local Government Code? January 30, 2009). ·
Explain . For purposes of taxation , the term "real property" may include
things which generally should be regarded as personal property (84
Suggested answer: C.J.S. 171, Note). It is a familiar phenomenon to see things classed
It is a fa miliar phenomenon to see things classed as real as real property for purposes of taxation which on general principle
property for purposes of taxation which on general principles might might be considered personal property (Standard Oil Co. of.New
be considered personal property . For similar reasons, machinery and York v. Jaramillo, 44 Phil. 630). Thus, .while the t w ~ s are not

I
/ 84 REvlEWER ON TAXATION
LocAL GoVERNMENT CODE
Real Property Tax
785

embedded in the land, they may, nevertheless, be considered as owner of the land and, in addition, must tend to directly me~t the
taxBg).e improvements on the land, enhancing its utility and rendering neeuthe industry or works carried OIJ. by the owner. Oil companies,
it useful to the oil industry as de~ned under Section 3(k) of the Real such as Caltex and Shell, .install underground tanks in the gasoline
Property Tax Code. It is undeniable that the two tanks have been stations located on land leased by the oil companies from others. Are
installed with som~degree of permanence at receptacles for the those underground tanks which were..!!,_ot placed there by the owner
considerable quantities of oil needed by Meralco for its operations. The of the land but which were instead placed there by the lessee of the
case ofBoard o{Assessment Appeals v. Manila Electric Company (119 land, considered izea1 property for purposes of real property taxation
Phil. 328), wherein Meralco's steel towers were held not to be subject under the Local Government Code? Explain your answer.
fo realty tax, is not in point because in that case the steel towers
were regarded as oles and under its franchise Meralco's poles re Suggested answer: ·
exempt from taxation. Moreover, t e steel towers were not attac ed Yes, the underground tanks although installeci by. the .lessee,
to any land or buifc1ing. They were removable froni their metal frames Shell and Caltex, are considered as reg,l property for purposes of the
(Manila Electric Co. v. Central Board ofAssessment Appeals,
imposition of real property taxes. It is only for purposes of exec;..1!'.ting
G.R. No. L-47943, May 31, 1982). a final judgment that these machinery and equipment, installed by
The ~peline of Meralco Securities does not faB within any the lessee on a leased land, would not be considered as real property.
of the classes of exempt real property)mumerated in Section 3 of But in the imposition of the r;eal f!!Operty tax, the underground tanks
the Assessment Law and Section 40 ofl'the Real Property Tax Code are taxable as nec~tures of the gasoline station without which
(Meralco Securities Industrial Corporation v. CBAA, supra). . the gasoline station would not be operational (Ccdtex Phils., Inc . v.
CBAA, 114 SCRA 296).
The appeliee constructed a road on a public land under lease
contract. Appellant assessed real properly tax thereon, which was
protested by tlle appellee, claim,µig that the road is exempt from tax Fundamental Principles
-
because (a) the ~~ad belongs to the nationargovernment by right of
· ·-- · · · · - -·
~
accession; (b) the road cannot be removed or separated from the land
Bar Question (2000, 1997)
on which it is constructed and so it is part and parcel of th~ublic . The appr~l, assess~t, levy and collection of real property
land; and (c) according to the evidence, the road was built not only for for taxation purposes shall be guided bytfie following fundamental
the use and benefit of the appellee but also of the public in general. principles:
The comt ruled that the gevernment has practicallyreserved the
1. Real property shall be appraised at its current and fair
rights to use the road to promote its varied activities·. Since the road
market value;
in question cannot be considered as a11 improvement which belongs to ~-
t~e appellee, although in part is for its benefit, it is clear that the same 2. Real property shall be c~ssified for assessment purposes
cannot be the subject of assessment witlun the meaning of Section 2 of on the basis of its actual use;
Commonwealth Act No. 470. It is well settlegJhat a realty tax, being
a burden upon the capital, should be. paid by the owner of the ·land 3. Real property shall be assessed on the basis a£ a Jmiform
and not by a Ufil}fructuary (Mercado v. Rizal, '67 Phil. 608; Art. 597, classificatiau within each local political subdivision;
New Civil Code). Appellee is but a partial usufructuary of the road in 4. The appraisal, assessment and levy of real property for
question (Board of Assessment Appeals of Zamboanga del Sur taxation purposes and the collection of the real property
v. Samar Mining Co., G.R. No. L-28034, February 27, 1971). tax shall not be let to any private persons; and
Bar Question (2001) 5. The appraisal and assessment of real pro~shall be
equ@ble (Sec ..198, LGC). ,.,
. Under Article 415 of the Civil Code, in order fo;
machinery and
''Fair market value" is the amount which a purchaser willing
equipment to be considered real prope~y, they must be placed by the
but ~ot compelled to buy would pay an owner of the property, and
 786 REviEwER ON TAXATION

LocAL GoVERNMENT CODE 787

Real Property Tax
the latter
. •willing .but not compelled to sell wou · Id accept
· as· the
cons1derat10n or pnce therefor (Sec. 199 LGC· Arm nd 11.r C R.A. 7160 and is therefore still the applicable statute, or because the
. "d d 44Ph " 38 . ' ' ya navy lub
v. Trin~ a ' . tl. 3). The schedule.o£fair market values shall Supreme Court, in three.related cases promulgated on 16 December

f . .ma1ia newspaper of general circul a t·10n m

be. published · th e province,
· 1993; after the Local Government Code of 1991 already took effect,
city or 1~umc1p ty cqn~ern~J:l or the posting in the provincial capital ruled that a schedule of values and the corresponding assessments
or othei places as reqmred by law (Lopez v. City 0 fM · ·z 303 based thereon "pre·pared solely by the city assessor ... failed fo comply
I SCRA 448 (19991). · · ani a, with the explicit requirement (of collegial and joint action by all
the assessors in the Metropolitan Manila Area under P .D. 921) ...
~asis of real property tax. _.:. The basis of real p~operty and are on that account illegal and void:" R.A. 7160 has a repealing
taxation under the Assessment Law was ownership or i11 terest provision (Section 534) and, if the intention of the legislature was
tantaw~unt to ownership. The Real Property Tax Code changed to abrogate P.D. 921 , it would have included it in such repealing
the basis of real property taxati~n and adopted the policy of taxing clause, as it did in expressly rendering ofno force and effect several
real property on the basis ~ l use, even if the 11,Ser is nnt ~ other presidential decrees. The repeal in R.A. 7160 partakes of the
Ow;!!fil" (Prov. ofNueva Edja v. Imperial Mining Co., 11~ SC nature of a general repealing provision. It is basic rule of statutory
632 (19821). This policy is still followed in the Local Government construction that repeals by implication are not favored (Ty and
Code. MVR Picture Tube v. Trampe and Mun. Assessor of Pasig , G.R.
No.117577, December 1, 1995; Figuerres v . Court of Appealsy
For assessment purposes, the--terii'r"actual-·use" refers to the . 305 SCRA 206 [19991).
principal and pr~minant utilization of the property by the person
in possession thereof pursuant to Section 199(b) of the Code (Testate The decision of the CBAA shall become.final and executory after
Estate of Lim v. City of Manila, 182 SCRA 483). In 1974, a new the lapse of fifteen days from the date of receipt of the decision ... To
Real Property Tax Code came into being when P.D. 464 was issued. continue 'collecting real property taxes based on valuations arrived
It changed the basis of real property taxation. It adopted the policy a ~ l years ago, in disregard of the increases in the valu~l
of taxing real property on the basis of actual use, even if.the user is properties that have occurred since then, isc:llQt m ~ with a
not the owner. Thus, even if the user is not the owner of the property, sound tax syste¥"iscal adequacy, which is one of the characteristics
govern~t property. covered by mining leases is subject to real of a sound tax system, requires that sources of revenues must be
property tax (Nueva Ecija v. Imperial Mining Corporation, G.R. adequate to meet government expenditures and their vari ations
No. L-59463, November 19, 1982). (Chavez v. Ongpin, supra) .

In appraising the current and fair market value ofthe·property, Bar Question (2002)
the crfterion is ·that which is p r e ~ in the locality where the
propertyj§.situated (Sec. 201, LGC). However, in preparing a general The real property of Mr. and Mrs . Angeles , situated in a
schedule of value for a province or city and in determining the classes commercial area in front of the public market, was declared in their
of property for assessment levels, real property shall be classified, Tax Declaration as residential because it had been used by them
valued and assessed on the basis of its actual use, regardless of where as their famwesidence from the time of its construction in 1990.
located, whoever owns it, and whoever uses -it (Secs. 217 and 212, However, since January 1_9 97, when the spouses left for the United
LGC). States to stay there permanently with their children, the property has
b~ rented to a single proprietor engaged in the sale of appliances
The Municipality of Pasig increased the real estate taxes and agricultural products. The Provincial Assessor reclassified the
effective for t he year 1994, which asse~sment was protested by the property as commercial for tax purpcrses·starti:rrg·Jamiary 1998. Mr.
taxpayer. The court ruled that whether the assessment is made • and Mrs. Angeles appeale~ the Local B(rard of Assessment Appeals
before or after the effectivity of R.A. 7160, the observance of, and contending, that ·the Tax Declarl\tion previously classifying their
compliance with, the explicit requirement of P .D: 921 is strict and
pro~!.o/ as resfd~iiti.al is binding. . ( : .::.
mandatory, either becau se P.D. 921 was not impliedly repealed by
How should the. appeal be decided?
 788 REVIEWER ON TAXATION
LOCAL GoVERNMENT CODE
Real Property Tax 789
Suggested answer:
accomplishme_nt of said purposes. Thus, CHHMAC should be under
The appeal should be decided against M d M the same special assessment level as that of CHH (City Assessor of
The law focuses on the actz,al ue:e of the pro,n rrt. a: lrs. :<4finge_les. Cebu v. Assoc. of Benevola de Cebu G.R. No . 152904 ru 8
· d z--e Y ,or c assi cation 2007). . ' ' u, ne ,
va l uatiw an assessme!_Lt purposes regardloc,c, ,,j",. ..:._ h · s · '
217 {th Lo l G . ~wners ip. ection ·
o_ e ca overnment Code provides that "real property shall be
classified, valued and assessed on the. bas•"
..., of•ts ,.,.t·u a l use regardl ess
• . ..,,.., Exemptions from real property tax
of w h ere located, whoever owns it, and whoever uses it."
Bar Question (2006, 2002)
The P:~vincial, city or municipal assessor shall undertake a
What properties are exempt from real property tax?
general 7::.v_iswn of_real property assessments within two (2) years after
the efectwity of this Code and every three (3) years thereafter (Sec. 219, Suggested answer:
LGC). The assessment of real property shall not be increased oftener
than once every three (3) years, except in case,.of new improvements The following are exempted from payment of the real property
~u~stantially increasing the value of said property or of any change tax:
in its actual use (Sec. 220, LGC). ·
1. Real property owned by the Republic of the Philippines or
any of its political subdivisions, except when the beneficial
Classes of real property use thereof has been granted, for consideration or otherwise,
to a taxable person;
For purposes ~sment, real property shall be classified as
residential, agricultural, commercial, industrial, mineral, timberland, 2. Charitable institutions, churches, parsonages or convents
or special. The city or municipality within the Metropolitan Manila appurtenant thereto, mosques , non-profit or religious
Area·, throu h their res ective sanggun an, shall have the power t9 cemeteries, and ·au lands, buildings and improvements
classify lands as residentia , agricultural, commercial, industrial, actually, directly and exclusively used for religious ,
mineral, timberl~nd, or ~pec::ial in accordance with their zoning charitable, or educational purposes;
ordinances (Sec. 215, LGC). · ·
3. All machineries and equipment that are actually, directly
All lands, buildings, and other improvements thereon actually, and exclusively used by local water districts and government
directly and exclusively used for hospitals, cultural, or scientific owned-or controlled corporations engaged in the supply and
purposes, and those owned and used by local ·water districts, and distribution of water and I or generation and transmission
government-owned .or -controlled corporations rendering essential of electric power;
public services in the supply and distribution of water and/or 4. All real .propertyowned ·by duly registered cooperatives as
generation and transmission of electric power shall be classified as provided for under RA. 6938; and ·
special (Sec. 216, LGCJ.
5. Machinery and equipment used for pollution control and
Chong Hua Hospital Medical Arts Center (CHHMAC) is an environmental protection.
integral part of CHH. The doctors and medical specialists holding
clin ics are those duly accredited by CHH, i.e. , they are consultants Except as provided herein, any exemption from payment of real
of the h ospital who can treat CHH's patients ..confined-init. ·~ c t property tax previously granted to, or presently enjoyed by, all persons,
that the ~tors are holding offi~n .a separate building, like at whether natural or juridical, including all government-owned or
CHHMAC, d~ not take away the essence and nature of their services controlled corporations, are hereby withdrawn upon the effectivity of
uis-a-vis the overall operation, of the liospital and e
benefi·t s to the this Code (Sec. 234, LGC). ·
h ~ients. The exemption from this i ot limite property
The exemption of government-owned or controlled corporations .
< l r u l ~ for charitable or educational purposes, hu;exteods tQ from national and local taxes was withdrawn by P.O. Nos. 1177 and
facilities which are jncjdental to and rea~anably necessary for the
 } 90 REVIEWER ON TAXATION
LocAL GoVERNMENT CODE 791
Rea.I Property Tax
/ ~~31 (National Power Corporation v. Court of Appeals, G.R . .
Suggested answer:
No.L-73477, O~tober 16, 1990). Commonwealth Act No, 182, which
created_the_Nabonal Development Company, contains no provision &. The assessor made an error in assessing the deficiency real
exeinptmg it from ·the payment of real estate tax on properties it property tax on the land owned by "A" but being leased and used by
may acquire. Bes~des, these properties are not devoted to public the Tibetian monks for their religious rituals and ceremonies. Section
use but were acquired for resale to qualified persons. Also, Natfonal 198 ofthe Local Government Code provides that real property shall be
Development Company does not come under the classification of classified for assessment purposes on the basis ofactual use. Moreover,
municipal or public corporations in the sense that it may sue and be charitable institutions, churches, parsonages or convents appurtenant
thereto, mosques, non-profit or religious cemeteries, and all lands,
sued in the same manner as may other private corporations. Unlike
buildings and improvements actually, directly ana exclusively used
the government, National Development Company may be sued without for religious, charitable, or educational purposes, are exempt from the
its consent, and is subject to taxation (National Development Co. payment of real property tax (Sec . 234, LGC).
v. Prov. of Nueua Ecija, G.R. No. L-41223, November 25, 1983) .
A national government instrumentality is exempt from real property
Supreme Court decisions on real property taxes
tax (Phil. Fisheries Development Authority v. CA, et al., G.R.
No. 169836, July 31, 2007). 1. Manila International Airport Authori ty (MIAA)
v. Paranaque City (2006) . - The Manila International Airport
Authority (MIAA) owns airport lands and buildings located in
Bar Question (2013)
Paranagy.e City. MIAA is not a GOCC under Section 2( 13) of the
•Mr.Arnaldo leased a piece ofland owned by the Municipality of Introductory Pi:ovisions of the Administrative Code because it is not
Pinagsabitan and built a warehouse on the property for his business organized as a stock or non-stock corporation. Neither is MIAA a
operations: The Municipal Assessor assessed Mr. Arnaldo for real GOCC under Section 16, Article XII of the 1987 Constitution because
property taxes on the land and the warehouse. Mr. Arnaldo objected to MIAA is not .reqttired to meet the text of economic viability. MIAA
the assessment, contending that he should not be asked to pay realty is a govern~ent instrumentality vested ~th corporate powers and
taxes on the land since it is municipal property. Was the assessment performing essential public~spu~~uant to Section 2(10) of the
proper? Administrative Code.
As a governme~trumentality, MIAA is not subject to any
Suggested answer: kind of tax by local governments under Section 133(0) of LGC . The
Yes , the assessment is proper. The land, although owned by exception to the exemption in Section 234(a) does not apply to MIAA
t h e Municipality, is ~ t from real property tax because the because MIAA is not a taxable entity under the LGC . Such exception
beneficiaf u~e bas been granted to a taxable per_son (Sec. 234[a], applies only if the beneficial_1,1~~ ~freal property ow_ned by the Republic
I

LGC). is given to a taxable entity. The airport lands and buildings ofMIAA
are p:i:opel'ties 8ellhted to public use and thus are properties of public
Bar Question (20t0) opini~owned-l;g, tbP. State ur the Republic (MIAA v. CA~nd Pasay
City, 2006).
"A" inherited a two-storey building in Makati from his father, a
real estate broker in the '60s. A group of'l'ibetian mo_nks approached 2. MIAA v. Pasay City (2009). - MIAA owns airport lands
"A" a d ·offered t o lease the building in order to use it as a venue for and buildings located in Pasay City.
their~uddhist rit]Jals and ceremonies. "A"accep~d the rent~ of Pl
million for the whole year. The following year, the City Assessor issued "Instrumentality" refers to any age11c;y of the national
. st"A" for non-payment ofreal property truces. Is
an assessmen t agam · . rt t ? gove~ent, not integrated within the department framework,
the assessor j ustified in assessing A's deficiency rea1 prope Y ruces. vested with special functions or jurisdiction by law, endowed with
Explain.
792 REvrEWER ON TAXATION
LocAL GoVERNMENT CODE 793
Real Property Tax
some if not all corporate powers, . administering speci 1 ~ d d
· · t· l a 1un s, an For an entity to be considered as GOCC, it must either be
enJoying opera 1ona autonomy, usually through a chart Th·
· 1 d l er. 1s organized as a,.stock or non-stock corporation. Two (2) requirements
term me u es regu atory agencies, chartered institutions a d GOCC
are need to create a stock corporation: (1 ) it has capital stock
"Instrum~ntality" includes ... GOCC (Sec. 2[10], Admi~istrativ~
divided into shares; and (2) it is authorized to distribute ~ n d s
Code). This means t~at a government instrumentality may or may and allotments of surplus and profits to ifs stockholders. If only
not be a GOCC: ObV1ously, the term government instrumentality is one requisite is present, it cannot be properly-classified as a stock
broader than the term GOCC. corporation. As for nonstock corporations, they must have members
"Government-Owned or fJontrolled Corporation" (GOCC) and must not distribute any part of their income to said members.
refers to any agency organized as a stock or non-stock corporation, PFDA is not a GOCC. It has capital stack but it is not divided
vested with functions relating to public needs whether governmental into shares of stocks. It has no stockholders or voting shares; hence,
or proprietary in nature, and owned by the Government directly or it is not a stock corporation. Neither is it a non-stock corporation
through its instrumentalities either wholly, or, where applicable as because it has no members (PFDA v. CA & Iloilo City, G.R. No .
in the case of stock corporations to the extent of at least 51 % of its 169836, July 31, 2007). .
capital stock.
4. Light Rail" Transportation Authority (LRTA)
. Since MIAA is a government instrumentality vested with v. Central Board of Asse~;,ment Appeals (CBAA) . - Real
corporate powers to perform efficiently its governmental functions, property is dass1'1ed f6r as~ssment.inirpos.e s on the basis of actual
MIAA is like any other government instrumentality, _the only .use , which is defined as "the purpose for which the property is
difference is that MIAA is vested with corporate powers. When principally or predominantly utilized by the pers6n in possession
the law vests in a government instrumentality co7porate powers, of the property."
the instrumentality does not becon;ie a corporation. Unless the
government instrumentality is organized as a st?ck or n~~-stock Unlike public roads which are open for use by everyone , the
corporation, it remains a gov·e rnment instrumentality exerc1smg_not LRT is accessible only to those who pay the required fare . It is thu s
only governmental but also corporate power~. Thu~, MIAAe~erc1ses apparent that petitioner does not exist solely for public service ,
the governmental powers of eminent domam, _p ohce authority ~nd and that the LRT carriageways and term inal st a t ions a re not
the levying of fees -and charges. At the same time, _MIAA ex~rc1ses exclusively for public use. Although petitioner is a pph)ic 11.tility. it
"all the powers of a corporation under ~he _Corpor~ti_o n Law, ~nsofar · is nonethe,lws profit-earning. It actually uses those carriageways
as these powers are not inconsistent with the provisions ofth1s ~.O. and terminal stations in its public utility business and earns money
Hence, MIAA is not liable to pay RPT (G.R . No. 163072, Apnl 2, therefrom.
2009). Real property o~~d by the go,y~rnment or any of its political
subdivisions and any GOC_C so exempt_by its charter is exempt from
3. Philippine Fisheries Development Au~h?_r_i!.~ (PFD~) RPT, but this,exemption shall not applY where the beneficial use has
v. CA & Jloilo City~- PFD_;'\ is not~ GOCGbut--an l~strunrentality been granted,1'or consideration or otherwise to a taxable person,
of t he national government which 1s generally ex~mpt fro~--RPT.
. . sai·d exemption does not aDDly to the portions ~the IFPC, Records of the Constitutional Commission reveal that what is
H ow ever, ~- fri · b 'Id' exempted is ;w)i the institution itself; those ex~mpted from real estate
consisting of breakwater, a landing quay'. a re . gebra~1lodi:1 m mtg,
m ark et hall, municipal shed, an administration m ~~g: wa er taxes are lands, buildings and improvements actually, directly and
f l ·1
and _u e _0 1 .:~r~ ly system and other port-related fac1hties and
the land and buildings of the IFPC remained with
m achinene~, 1 : ich PFDA leased to private entities. Nonetheless,
exclusively used for religious, charitable or educational purposes. ·
What is meant by actual, direct and e'Kciwuv~of the
property for charitable institutions is the cU:re~t and inun~te and
the Republic_, w rty of public dominion, cannot be sold _a t public p-roperty
actual appli:cationof'tlie· itileifi~ pn~=s for which the
the IFPC, bemg prope . .
. to satis fy t he t ax delinquency. . charitable institution is organized. It is(fu>t th; of the incginb
a uct:ion
794 REVIEWER ON TAXATION
LocAL GoVERNMENT CODE 795
Real Property Tax
from the real property that is determinative of whether the property property taxation _is based on use and not on ownership; hence, the
is used for tax-exempt purposes. same rule must also be applied for real property tax exemptions.
-· In sum, SC ruled the portions of the land leased to private
Bar Question (2011)
:!::ffl~!!!'~i~ ,:jb~n~:~•;;,~. ~~n~
QC Assessor, .R. o. 144104, June 29, 2004).
0
The head priest of the religious sect - Tres Personas Solo Dios,
as the corporation sole, rented out a 5,000 s~.m. lot r:gistered in its
· name for use as school site of a school orgamzed for profit. The sect
5. Government Service Insurance System (GSIS) v. used the rentals for the support and upkeep of its priests. Is the rented
Assesspr of M~nila .(2009). = The GSIS was created under P.D. ·lot subject to real property tax?
1146, which granted tax exemption to it. In 1992, R.A. 7160 removed
all tax exemptions from real property, except those specifically Suggested answer:
mentioned -in the law. In June, 1997, R.A. 8291 was enacted and it
No, the lot is exempt from real property taxes, since it is actually,
restated the exemption of GSIS; among other provisions. In this case, _
directly and exclusively used b the school for edu · nal purposes.
GSIS leased some of its properties to private persons. Considering that
The corporation sole is also exempt from, rea property tax under n
GSIS leased some of its real properties, the property must be subject
234(bJoTthe LGC.
to the real property tax, such tax to be paid by the lessee thereof.
r .
Civil remedies for the collection of tax
Bar Question (2000)
_ Article VI, Section 28(3) of the 1987 Philippine Constitution Bar Question (1997)
provides that charitable institutions, churches and pars?nages or Give the remedies available to local government un its to enforce
convents appurtenant thereto, mosques, non-profit cemetenes a~d all . the collection of taxes, fees, and charges?
lands buildings-and·imim>-vements.actually, ~i.r~i;tly and exch1s1vely
used for religious, charitable or educational purposes shall be exempt Suggested answer:--
from taxation.
The remedies for colleclion may be categorized info {a) the
· ·- -~)- ,To wh~t ki_nd of tax does this onem-p tionapply? extra.judicial remedy oflevy, and (b) judicial action (Sec. !256;-LGC),
Levy may be repeated i . necessary until the full amount due, including
Suggested answer: all expenses, is collected (Sec. -265,..L C). T_he_)p_ca_l_gor:>ernTJJ,e.n t. unit
. This exemption applies ly to pro ert_y t~e Wh~t is exempted concerned may enforce the collection of the basic real property tax
is not the Institution itself but the a~ds,J!Eildi7:g_s and imp:ovements or any other tax levied under this Title by civil action in any court
of compeferitJrzrisclfc"tion. The civil action shall be filed by the local
actually; directly__'!~d -~c!_l.1-!.~v_e_!,7, Uf!~_d f'!..1:.._!~l_"C":<!.1!-5..!_chantable and
eaiieii:tionalpurposes (Comm1,11swnerofln_'!'"!!'!''_~V~'!:_ue v. Court treasurer within the period prescribeilin Section 27-0 efthis Code (Sec. ··
- ·-~._ an<+
·· · ·J -rn-1cA GJl •·No .I24"043' Octooer 14, 1998). 266, LGC).
ofAppeau, i Jr.1.' ,

Mor~ove7:, the bas~c real P r : , > P ~ r tax levied

b) Is p r ~ u a l use necessary for tax exemption purposes under this Title constitu~ a lien on. the property subject to tax,
under the Constitution? superior. _tQ. all liens, charges or encumbrances ·in favor of any
person, irrespective of the owner or possessor -thereof, enf9rJ:..eo:ble
Sugges:ted ~we~ . by administrative or judicial action! and may only be extinguished
' --- use.JsJ,:X exemptions are strictly construed against the upon pay_rr,;ent of the tax and the related interests and expenses (Sec .
Yes, beca must be evidence to show that the rarp_ayer has 257, LGC).
taxpayer. There ·. · ents for exemption .. Furthermore, real
complied with the requtrem
 REVIEWER ON TAXATION

LocAL GoVERNMENT CODE 797

Real Property Tax
sar Question (1999) ·
Regional Trial Courts havejurisdictiQTl. over cases i·,wo{ving the
_ A Co., a-Philippine corpora~ion, is the owner of machinery, enfO,!:S'f'roeut g1ul sgllestiou of regl property taxg_s. The conflict in the
e~mpment and fixtures l?cated at its plant in Mwitinlupa City. The provisions o,:ijurisdiction between P.D. 242 (Prescribing the procedure
City Assessor characterized all these properties as real properties for administrative settlement or adjudication of disputes, claims
subject to the real property tax. A Co. appealed the matter to the and controversies between or among government offices, agencies
Muntinlupa Board of Assessment Appeals. The Board ruled in and instrumentalities, including government-owned or controlled
favor of the City, in accordance with R.A. 1125 (Ari Act creating the corporations) and P.D. 464 (Real Property Tax Code) should be
Court of Tax· Appeals). A Co. brought a petition for review before resolved in favor of the latter law, since it is a special law and of later
the CTA to appeal the decision of the City Board of Assessment enactment (National Power Corporation v . Court of Appeals,
· Appeals. supra).

Is the Petition for Review proper? Explain. Bar Question (1992)

Suggested answer: Ms. Edna Dinoso is the registered owner of a residential lot with
a two-storey house situated in Naga City . The lot with an area of 328
No. The CTA is devoid ofjuri!>diction to_en,tertain appeals from sq. meters is described and covered by TCT No. 4 739 of th e Regi stry
the decision of the Citz Board of Assessment Appeals. Said ~ o n of Deeds ofNaga City.
is instead appealable to the Central Board of Assessment Appeals,
which under the Local Government Code, has appellate jurisdiction On September 12, 1977, a 115 sq . meter porti on of Edna's
over decisioTJ,S of Loc_g,J,. Board of Assessment Appeals (Caltex Phils. property was~xpropriated by the Republic of the Philippines for the
v. Central Board ofAssessment Appeals, G.R. N<i. L-50466, May sum of ~6,700.00 representing the assessed value of the aforesaid
31,1982). . portion. This amount was deposited by the Government in Edna's
account.
The collection of the tax may be enforced through either_or both ·
the above a · e and ·udicial remedies, .alternatively or F<n:~o~t ten UO) years;Edna failed to pay her real estate truces
simultaneously, and the use or non-use o one re a 1i t be on the same property. Tln1~~ -on_~ovem~~I.5....lJ~'.77 her property was
an avail er (Sec. 258, C). A _o_r-_ _., sold at .ID,Jhlic auction.by the City-Treasurer of Naga City to satisfy
a r t e payment of the delinquent _t,f!:X__:.. _ not re9u_ir:_ ... for t e her real estate tax delinquencies amounting to ~5,80o~·oo. The highest
..._in-i-ti-.a-t.i on of either remedy. Tf is enou h that a notice o e y bidder for the property was Angel Chua .
is caused to be posted·and-piiblishea (1,$ required .iiiider Section: 254 E~na was not present at the public auction although she later
of the Code. · admitted having ·received the notice of hearing for the petition for
The remedy of 1:vy can be pursued by pul1i:!!,g up for sale., only entry of a new certificate of title by Angel Chua (Both the auction
.\· the revroper:ty subject to t5 (i.e., the delinquent property upon sale and the final bill of sale were ahliofated at the back of TCT No .
4739 by the Register of Deeds.) · ·· · ·
which the tax lienattaches), regardless of the owner or possessor
thereof The personal liability for the tax delinquency, upon the other On March 15, 1979, Edna filed a complaint to annul the auction
hand, is generally on who ~- _·__ er of t~e r~°:l P:OJ:erty at the sale which was_ denied by the CFI--Judge of-Naga City. In fact, the
time the tax-accrues:··· ·Fe, however, the_ _ta.!:}~ability is imposed on CFI Judge ordered the TCT #4739 of Edna be cancelled and that a
the beneficial use of the real property, such as those o w ~ new title be issued to Angel Chua. ·
to f?_ri vate persons by the governmenf)(Sec. 234, LGC), or when the
~ -assessmen t is · made on the basis of the actual use thereof (Sec. 199
toto.
On appeal, the -Court of Appeals affirmed the CFI decision in
·
a nd' 217, LGCJ,. the personal liability is on any person who has such
· ,1;,. · z tual use at the time of the accrual of the tw) (Nueva _ Edna then elevated the case to the Supreme Court citing several
ber~ 1 ..,ia or ac •-
Ecija v. Imperial Mining Co., 118 SCRA 632). grave errors oflaw, ~ong which are:.... _ .
 REVIEWER ON TAXATION

LocAL GoVERNMENT CODE 799

Real Property Tax
. That her ~ax delinquencies (involving ,.5 800 OO) fi ·
, • or non-
paymen o f r~ al
t
. ~st a te- t~es were. offset .by . the sum of have °impaired the substantial rights of the taxpayer. In the
P6,700.00 which the government ofth Ph'l• . case at bar, the plaintiff received a notice of heanngror the
h Sh 1 · e i 1ppmes owed
petition for entry of a new certificate of title during which
er;. : c aims that her tax delinquencies have been·
· extmgu1shed by legal compensation; she could haue questioned any irregularity in the co11,duct
2) of the sale.
':That the price of~5,800.00 paid by Angel Chua was grossly
madequate and tha~ because of its inadequacy, the same is Power to stlb,poena does not jncl~e contempt power
tantamount to depnvation of property without due process
of law; · · Since the existence of the contempt power in conjunction with the
subpoena power in any government body inevitably poses a potential
3) That the public auction made on her property is void. derogation of individual rights, the law cannot be liberally construed
to have impliedly granted such powers (Negros Oriental II Electric
Discuss the merits of the appeal.
Cooperative v. Sangguniang Panglungsod ng Dumaguete, 155
SCRA 421 [19871) .
Suggested answer:
1) The decision of the Court of Appeals affirming the CF! Prescriptive periods
decision must be affirmed. . The basic real property tax and any other tax levied shall be
On the procedural aspect, it has not been shown as colfected within five i§) years fro~ the elate they become due.~ o
required under the Real Property Tax Code that plaintiff action for the collec~ of the tax, whether administrative or judicial ,
has paid the amount for which the real property has been sha!} be @ituted al'tel the expg aiion es,uch period. In c~se of fraud
sold plus interest. or intent to evade payment oft e ax, such action may be instituted

On the claim of extinction of tax liability by legal

for the collection thereofwithillc!0 years from the discovery of such
fraud or intent to evade payment.
compensation, there is jurisprudence to the effert t~at t~e ·
doctrin.f!. of equitable recou,.uroent does not appll_!:!l this The period of prescription within which to collect shall be
jurisdiction. Assuming it does, the facts of the ·?a~e bear S'S.Spen~ for the time during which:
outthat the Government does not owe the plaintiff any 1. The local treasurer is legally prevented fraro caUecting the
amount. tax;
2) On the claim that the price for the property was grossly 2. The owner of the property or the person having legal
inadequate, the Real Property Tax Code specifically
mentions that the sale of real property at public auctions is
interest therein-reqnesfs forreinvestigation and executes a
waiver in writing befor:e the expiration of the period within
"to sat· ~and penalties due and cost le" which to collect; and .
(Sec. 73, LGC). Thus, the se mg price is based not on the
fair market value of the property sold at public auc#on but 3. The owner of the property or the person h~ving regal
the amount afrealpropeey taxes due thereon. In any case, interesftlierein is out of the conn try o-r otherwise cannot
the delinquent taxpayer is given one year from the date of be located (Sec. 270, L_GQ):_
registration of the sale within which to redeem the property
by paying the tax due plus costs and interest. Bar Question (2011)
3) On the claim that the public auction made on the property is Ka Tato owns a parcel of land in Batangas declared for real
void, the Real Property Tax Code provides (Sec. 83, 2nd par., property taxati~n as agricultural: In 1990, he -tis~a°the land for a
LGC) that a court shall not declared a ~ale invalid due to poultry feed processing plant but continued to declare the property
irreg ularitir.l$ in lheproeetfliPIJS i,n,kss, such irregularities as agricultural. I;-March 2011, the local tax assessor discovered Ka
800 REVIEWER ON TAXATION LocAL GoVERNMENT CODE 801
Real Property Tax

Ta to's_c_h a nge ofu$e of_h,is land_~n_d informed the local treasurer who adjustment depending upon the final outcome of the appeal (Sec. 231 ,
demanded payment of deficiency real property taxes from 1990 to LGC).
2011 . Has the action prescribed?
Exhaustio.n...Qf Administrative Remedies
Suggested answer:
Before seeking the intention of the courts, it is a pre-condition
No. The deficiency real property taxes for the period 1990 up to that petitioner must first avail of all the means afforded by the
20J 1 may still be collected within 1Oyears froir,: March 2011 counting administrative processes. Thus, the denial of request for exemption
backward. from real property tax by assessor may .be appealed to the LBAA
as it concerns classification of property. Parties cannot bypass the
Taxpayer's Remedies authority of the concerned administrative agencies and directly seek
redress from the courts even on the pretext of raising a supposedly
Where an assessment is,_ illegal or void, the remedy of the
pure question oflaw without violating the doctrine of administrative
taxpayer who has ~lready paid the tax under protest is to sue for
. remedies.
ret:Jm.!_in the competent CFv-Where the assessment is merely
~~oneous, his recourse is to file an appe~n the Provi~al Board of However, judic~view may be resorted to via an action for
Assessment Appeals within 60 clays from receipt of the assessment. ref}!!l..d.or reimbursement without exhausting administrative remedies
An assessment is illegal and · whe ower to before the LBAA, where-the plaintiff alleges that he is not.the--owner
act atall. tis erroneous when the·assessor-has the power but errs in or 1.!§!}Uf the property assessed. This is bec~se theTssue is not as
v.
theexercise of that power]Victorias Milling Co. Court of Tax to the amount of tax assessed, but the imposition of the tax assessed·
Appeals, ibid.). . and who should shoulder the burden of the tax (Estate of Concordia
T. Lim v. City ofManila, 182 SCRA 483 [19901) . As this provision
Any owner or person havi,ng ]ega) interest in the property, who was adopted from Section 30 of the RPTC, the case is still good law.
is not satisfied with the action-of-the provincial, city or municipal
assessor may, within sixty days from the date ofreceipt by him of the
written..!!.Otice of assessment, appeal tq the local Board of Assessment No Motion
r for Reconsideration is Allowed Before-the
Appeals of the province or city concerned by a petition under .oath, Assessor's
,,..- _ Office
together with copies of the tax declarations and such affidavits Under ~on 22 of the Real Property Tax Code (RPTC), there
or cfocument s iri. support·or-the appeal (Sec. 226, LGC; Chavez v. are only three (3) occasions~hen assessments of real properties may
Ongpin, 186 SCRA 331). The failure...til.i!ppeal within the statutory · be ni1;1.w bx the local .11ssessor~l) !!E_On discovery of the real property;
period renders the assessment final and unappealable (Victorias .(2) during th.!:_ general revision of property assessments as provided
Milling .Co. v. Court.of Tax Appeals; 22 SCRA 1008); · . in Section 21 of the RPTC; and (3) at anytime when requested by the
The B<la!:!!.of Assessment Appeais-shatl-~ethe appeal within person in whose name the property is declared. After an assessment
~ a y s ji:m;n_receipt of the appeal. The decision oft?e Bo_ard of has been corulucted; the assessor shall within 30 daysjssue a written
Assessment Appeals, which must be based 011_substantial evidence notice of such new or revised assessment to the on in whose name
presented at the hearing or at least contained in the records may be the property is declared. If the owner is ot satisfie with the action
appealed within 30 days from receipt tbereofby the taxpayer to the of the assessor in the assessment of his proper y, e fu.y anoeal)w_i1h
Central Boar d of Assessment Appeals, whose decision shall be final ~O davs'from receipt.PUhe notice of assessment to the Local Board
and executory (S ec. 229, LGC). ~ m e n t Appeals. .

ApAe al on assessments of real property made unde_r the Under Section 226 of R.A. 7160, the last action of the local
provisions of this Code shall, i~suspend the collection of assessor on a particular assessment shall be the notice of assessment;
the corresponding realty truces on the property iny_o!ved as assessed it is t1us1ast action which gives the owner of the property the right
by the provincial or city assessor, without prejudice to subsequent to appeal to the LBAA. The procedure does run permit the property
 802
REvl'EWER ON TAXATION
LocAL GoVERNMENT, Coo&
803
Real Property Tax
th
:w::ier e !emedy of filing a motion for reconsideration before the Caltex cases. When the issue, ho·w ever, is one that center~ wh~
oc assessor. T? allow this procedure would invite cor~ption in the should bear the burden oftbe tax between two priva~e p_a~ies, th
system ?f ap!'raisal and assessment. It conveniently courts a graft- re.:n;1ar co~rts not the assessment boards, have ~s*ctinp a_ver
prone situation_ where values of real property may be initially set 0

the case (Testate Estate of Concordia T. L"im v. c·t

~ '
i .Yo fMa nila•
unreasonably high, and then subsequently reduced upon the request 182SCRA 482).
of the prope~ o~er (Callanta v. Office ofOmbudsman, January
30, 1998, cited m FELS Energy v. Prov. of Batangas, 2007).
Bar Question (2006)
. The special civil action of certiorari would be proper to question Quezon City pubHshed on January 30, 2006 a list of delinquent
the 'decision of the Central Board of Assessment Appeals. The real property taxpayers in 2_newspapers of general circulation and
recognized rule is that the underlying power in courts to scrutinize posted this in the main lobby of the City Hall. The notice requires all
the acts of administrative agencies exercising quasi-judicial power owners of real properties in the list to pay the real property tax due
on qQstions of law and jurisdiction, even where no .review is given within 30 days from the date of publication; otherwise, the properties_
by statute, exists. When R.A. 1125 created the Tax Court in 1954, . listed shall be sold at public auction.
there was as yet no Central Board of Assessment Appeals. Section
7(3) ofR.A. 1125, in providing that the T~Court had jurisdiction to Joachin is.one of those named in the list. He purchased a real
review by appeal decisions .o f provincial or city boards.0(13,~_e ssment property in 1996 but failed to~ster the document of sale with the
appeals-ha.din m,ind the.local boards ofassessment appeals, (Q_ut no the Register of Deeds and secure a new real property tax declaration in
.iC'entral Board ofAssessment Appeals, wJ#cb_w;i,der. the Real Property · his name. He alleged that the auction sale of his property is void for
'Tax Code has ape._ell~te jurisdiction over decisions of said local boards lack of d~cess considering that the City Treasurer did not send
of assessment appe s and is, therefore, in the same category as the _him per~al notice. For his part, the City Treasurer maintains that
Tax Courtycaltex v. Central Board ofAssessment Appeals, 114 the publication and posting of notice are sufficient compliance with
SCRA.296). the requirements of the law.

Cerlior.ari was properly availed of in this case. The rule is that 1. If you were the judge, how will you resolve this issue?
as to administrative. agen.cies...exer-cising .quasi-judicial power there 2. Assuming Joachin is a registered owner; will your answer
is an underlying power in the courts to scrutinize. the aets of_sµch be the same?
agencies on questions oflaw and jurisdiction even though no ~g~t-of
review is gjven by the statute (73 CJS ,506). The purpose ofJudICial Suggested answer:
review is to keep the administrative -agency witq_i~}~s,jurtsdiction
and protect·substantial-rights· of parties affected by its decisions (73 1. I will resolve the issue in favor of tb&._S:ity Treasurer. For
CJS 507, Sec. 165). 'i'iie'i·eview·is ·i1part'c,fthe·systeiii of checks and purposes of the real property tax, the regi.§.kred owner of the
balances which isa·lim:itation on the separation of powers and which property is deemegJh_e taxpayer. H ence, only the registered
forestalls arbitrary and unjust adjudications (Meralco -Securities .owner is entitled to a notice of tax delinquency and other
Industrial Corjioration·v. :CBAA; supra).
.
a
proceedings relative to tax sale (Talusan v . Tayag
/
and Hernandez, 8568CRA 268 [20011) . Not being the
'the legislative intent on the Local Government Code appears to registered owner of the property/Joachin cannot claim to
be that any issue relating to real property taxation that a ~axpayer have been deprived ofsuch notice)In fact, he was not en.{itled
is minded to raise againsUhe government, whether it be a q.uestion JQ.j,t. He brought the misfortune upon himself, because he
on the validity of the assessment or of the imposition and collection
did not register the Deed of Sale with the R egister of Deeds
of the tax, should be resolved via the administrative route until
upon its execution or secure a tax d eclaration in his name.
it may ultimately reach by way of appeal, the Central ·Board of
He did not take the necessary steps to protect and legitimize
Assessment Appeal's. From the latter's decision, judicial'recourse his interest. The auction sale of his property is, therefore, .
should still be appropriate following the ruling iri the Meralco and valid.
 REVIEWER ON TAXATION
LocAL GoVERNMENT CODE 805
Real Property Tax
No, my answer will not be the same The l . . .
of the auction sale ust b . aw reqlJJIU...Q. notice B. The protest is devoid ofmerit. No p11,blic hearing is r~quir~d
er A mere m._ . 'L/IDlper--ly -sent.to_th£!::teg,,s@'lJJ;> before the enactment of a local tax ordinance _levying t e
· publu:ation of the notice of delinquency basic real_pro~ tax (Art. 234, LGC Regulations).
~ ou d not suffice con ·d ·
l . . • si ermg t h at the procedure · in tax •
Ye: th~re is merit in the protest provided that sufficient
:~ es is_ m per_sonam. An_au~tion sale, although preceded by
vertise7:1-ent and publication but without an actual notice proof cn~ld he in.t~oduced for the n.nn.-observa.n.ce nf public
to the delinquent taxpayer, is void (Tan v. Bantegui, 473 hearing. By implication, the Supreme Court recognized that
SCRA. 663 [2005]; Estate ofMercedes Jacob v. CA, 283 public hearings are . requi,:ed to be conducted rior to the
SCRA. 474 [1997]). enactment ofan or inance imposing real pro erty taxes. Alt ,ough
it was cone u e e ig es tri unal that<i!J-e'sumption of
validity ofa tax ordinance can not be overcome by bare assertions
Bar Question (2002) ifprocedural def~cts .on its enactment)it would seem that if the
A. Aside from the basic real estate tax, give three (3) other taxpayer had presented evidence to support the allegation that no
taxes which may be imposed by provincial and city public hearing was conducted, the Court uld have ruled that
governmen~ as well as by municipalities in the Metro the tax ordiTIJ!,nce is invalid (Figuerres v. Court o Appeals,
Manila Area. - G.R. No. L-119172, March 25, 1999).
B. An Ordin!,!lce was passed by the Provincial Board of a
Province in the North, increasing the rate of basic real
Bar Question (1991)
prope~tax from 0.006% to 1% of the assessed-value of the l . The Municipality"ofMalolos passed an ordinance imposing a tax
real property effective January 1, 2000. Residents of the on any sale or transfer of real property located within themunicipality
municipalities of the said province protested the Ordinance at a rate of one-fourth (1/4) of one percent (1 %) of the total consider-
on the ground that no public hearing was conducted and, ation of such transaction. X sold a parcel ofland in Malolos, which he
therefore, any increase in the rate of real property tax is inherited from his deceased parents and refused to pay the aforesaid
void. tax. He instead filed appropriate case asking that the ordinance be
declared null and void since such a tax can only be collected by the
Is there merit in the protest? Explain your answer.
national gov~ment, as in fact he has paid BIRthe required capital
gains tax. The Municipality countered that under the Constitution,
Suggested answer:
each local government is vested with the power to create its own
A. Th~ following real property taxes aside. from the basic sources ofrevenue and to levy taxes, and it imposed the subject t ax in
real properly tax may be imposed by provincial and city the exercise of said constitutional authority. Resolve the controversy.
governments as well as by municipalities in the Metro
Manila area: · · Suggested answer:

1. Additionci,J levy on real property for the Special . The ordinance passed by the Municipality of Malolos imposing
Education ~ 3 5 , LGC); a tax on the sale or trans er l roperty ~ d. The Local Tax
Code only allows rovinces and · · · o impose a tax on the transfer
2. Additio~lorem tax on idle lands (Sec. 236, of ownership of rea property (Secs. 7 and 23, LGCJ. Municipalities
LGCJ;and _ .. are prohibited from imposing said tax that provinces are ~r:ifically
3.
-
Special levy (Sec. 240, LGC).
[Note: Other taxes may comprise the enumeration
because many other laws have authorized them to be
auth.o!iE}d to levy (Sec. 22, LGC). ·
While it is true that the Constitution has given broad powers of
taxation to local government units, this delegation, however, is subject
imposed by LGUs.] to such limit~ as may be provided by _law (Sec. 5. Art. X, 1987
Constitution).
/-: RIMEWER ON TAXATION
L oCA.L GoVERNMENT
Real Property Tax
CooF:

. Assessor the City Treasu rer of

807

Payment of tax under protest

· No protest shall b t .
Wh en a taxpayer de · e en~ ertamed unless the tax is first paid
After assessment by the City
Manila required X to pay the re;i esta:e
years 1977 and 1978. X paid un er pro es . ~
:x;~
t ' due on the lot for the
September 5. 1979, X
fund The deman d
sires 1or any ·reason- to pay-his tax under sent a demand letter to the City Treasurer or re .
protest he shall· d . t h
·: m ica e t e amount or portion thereof which he is
contesting
b . . and such prot est sh all
. be annotated on the tax receipts
.
Y wntmg thereon the word "paid under protest." The protest shall
be c o n ~ ;~ ,__,.._,_ .
was refused.
X then filed with the Regional .Trial Court a comp~~int
the Cit of Manila for a "sum of money and/or reco~e~ o . r~a
·
~!:!:::
. - ~ g , with a statement of the ground therefor, taxes p~id under protest." The City questione~ t~e Junsdict10n of :he
~thin 30 days. The written prcilesf shall be filed with the provincial,
city 0rnnmtcip_~l treasurers within the Metropolitan Manila Area, Court. Decide.
who shall decide tlie protest within sixty (60) days from the receipt
_of the protest. . Suggested answer:
Section 62 of the Real Property Tax Code provides that:
In case of payments under protest, the amount or portion of the
tax contes~d shall-b e-held in trns~y the treasurer and the difference "Sec. 62. Payment under protest. -
shall be treated as revenue. When a taxpayer desires for any reason to pay hi~ tax under
"a)
In the event that the protest is finally decided in favor of the protest, he shall indicate the amo.unt or portion thereof
protestant, the amount or portion of the tax protested against may he is contesting and such protest shall be annotated on
either be refunded to the protestant or app_lied_as tax~ t to any t-he-tax receipts by writing thereon the words 'paid under
other t;xisting or future tax liability of tllesaicfprotestant. <It: the V protest.' Verba{protests shaU be confirmed in writing, with
protest is denied orupon the lapse of 60 days without the protest a statement of the ground therefor within thirty days . The
being finally decided, the taxpayer may avail of the remedies (i.e., tax may be paid under protest, and in such case it shall be
appeal may be taken·to the Board of Assessment Appeals))'Sec. 252, the duty of the Provincial, City or Municipal Treasurers to
LGC). . annotate the ground or grounds therefor on the receipt.
Protest is not a requirement in order that a taxpayer, who "b) In case of payments under protest, t_h e amount or portion
paid un~a 1~iistake1rbelief that it is required by l~~•- may cla_im of the-tax-contested shall be heljtin trust by the treasurer
for refund. Section 54 of C.A. 470 does not apply to petitioner which and the difference shall be treated as revenue.
could conceivably not have been expected to protest a payment it
honestly believed to be due. The same refers only to the case where the "c) In the event that the protest _is finally decided in favor ofthe
taxpayer, despite his knowledge of the erroneous or ill~gal assessment, _ ·government the amount or portion of the tax held in trust
still pays and fails to make the proper protest, for m such case, he by the treasurer shall accrue to the revenue account, but if
should manifest an unwillingness to pay, and failing so, the taxpayer · the protest shall be decided finally in favor ofthe protestant,
. is deemed_~ have waived his right to claim a refun~Ramie Textiles the amount or portion of the tax protested or applied as tax
v. Mathay, 89 .SCRA 586). credit to any other existing or future tax liability of the said
protestant."
Bar Question (1993) If the owner is not satisfied with the action of the
On -F-ebrnary 13, _1~?-~, .lC,S!h.t.?.ined a loan of~800,000.00 from provincial or city assessors in the assessment ofhis property,
the GSIS secured by the mortgage of a parcel of land including its he may.file an appeal to the Board ofAssessment Appeals of
improvements. X failed to pay the loan. The lot was foreclosed and the_province on city, within sixty (60) days from the receipt
sold at public auction to the GSIS as the highest bidder. X failed to of the decision (Sec. 30, RPfC).
redeem the lot and the GSIS consolidated its title to the lot in 1977. ·
In 1979, however, the GSIS allowed X to repurcha.se the .lot. If the owner. is .not. satis/ie,d_tuith 0... -411ecifton of the
Board of Assessment Appeala, 1'c ,,...,, wsal the ,aid
 REVIEWER ON TAXATION

decision to the Cer:z,tral Board ofAssessment Appeals within

thirty (30) days after the receipt of the decision (Secs. 34
and 36, RPTC).
As enunciated in the case of Victorias Milling Co. v. PART VII
Court of Tax Appeals, 22 SCRA 1008 (1968):.
"It is settled in our jurisdiction that where an TARIFF AND CUSTO
assessment is illegal and void, the remedy of a taxpayer,
who ~ already paid the realty tax under protest, is to ·CHAPTER XXX
sue or refund in the f:Ompetent court of first instazu:e. On
the other hand, 'where the assessment is merely erroneous, FUNDAMENTAL PRI
his recourse is to file an appeal in the Provincial Board
of Assessment Appeals within 60 days from receipt of the
assessment.":> - Customs Duties
In view of the foregoing, the legal recourse of X is to "Customs duties" is the name giver
appeal the decision of the City Treasurer to the Board of and exportation of commodities, the t:
Assess~peal, and not to file an actwn for sum ofmoney merch_andise imported from, or exported 1
and I o r ~ ofreal estate taxes. Hence, the...!l!.Qional Trial Phils .·v . Court of Appeals, supra).
Court has jurisdiction over the complaint filed by X.
_ Cust~s duty attaches when goo
Bar Question (2004) they are 'brought within custoI)J.S.j_uri
unlade, the general principle of law b
RC is a law-abiding citizen who pays his real estate taxes imports immediately on their arrival wi
promptly. Due to a series of typhoons and adverse economic conditions, regardless of any destruction that may c
an ordinance is passed by MM City, granting a 50% discount for MicroElectronics v. Republic of the 1
payment of unpaid real estate taxes for the preceding year and the 2012).
condonation of all penalties or fines resulting from the late payment.
Arguing that the ordinan~e rewards delinquent taxpayers and Imported Articles Subject to Out
discriminates against prompt ones, RC demands that he be refunded All articles, when imported from ~
an amount equivalent to one-half of the real estate taxes he paid. The Philippines, shall be subjectto duty u
municipal attorney rendered an opinion that RC cannot be reimbursed · though previously exported from the Phi
because the ordinance did not provide for such reimbursement. RC specifically provided for in this Code or i
files suit to declare the ordinance void on the ground that it is class
legislation. Will his suit prosper? Explain your answer briefly. Prohibited Importations
Suggested answer: The importation into the Philippin
The suit will not prosper. The remission or condo nation of taxes prohibited:
due and payable to the exclusion of tax~already collected does not a. Dynamite, gunpowder, amrm
constitute unfair discrimination. Each set of taxes isJ!:Sl_ass by itself firearm and weapons of war,
and the law would be open to attack as class legislation only if all except when authorized by h
taxpa rs belonging to one class were not treated aiike (Juna Luna
Subdivision, n . . il. 371 [19521).
809