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I. History
II. Nature
In the encomienda system during the
Taxes on property are taxes assessed on all
Spanish era, there was no real property tax
property, or all property of a certain class,
in the Philippines in the same sense in
located within a certain territory on a
which the term is used today. Taxes on land
specified date in proportion to its value or
were levied primarily on male tenant
in accordance with some other reasonable
farmers of military age (16-60) and as such
method of apportionment.
were personal taxes on tributes rather than
true land taxes. These taxes, generally in A property tax is ordinarily assessed at
the form of agricultural products, were paid stated periods determined in advance,
for the privilege of working the land of the and collected at appointed times and its
encomienderos. payment is usually enforced by sale of
the property taxed.
The true beginnings of real property
taxation in the Philippines came with the In the Philippines, the real property tax
advent of American Rule. Acts No. 82 and is an annual ad valorem tax imposed by
83 of the Philippine Commission, organizing local government units on real property
the municipal and provincial governments, within their jurisdiction, determined on
respectively, were enacted. These laws the basis of a fixed proportion of the
authorized municipal and provincial value of the property.
treasurers to levy taxes on real properties.
These taxes became the primary source of III. Purpose
locally-generated revenues.
The function of a property tax is to raise
American Rule (Acts No. 82/83) revenue. Such tax does not impose any
condition, nor does it place any restriction
1916 Jones Law upon the use of the property taxed.
1932 Act No. 3995 The real property tax is the main source of
revenue for local governments in the
1939 Assessment Law
Philippines.
1968 Special Education Law
Appeal to Local Board of Assessment The Power to levy tax is vested in the
Appeals Province or city or a municipality within
Metropolitan Manila Area(MMA).
- Any owner/person who is not satisfied
with the action of the provincial, city or Levy an annual ad valorem tax on real
municipal assesor.. property: Land, Building, Machinery, and other
improvements not specifically exempted.
- may appeal within 60 days from the
date of receipt of the written notice of See The Civil Code (Art. 415 thereof) For
assessment enumeration of the immovable/real
property.
- By filing a petition under oath in the
form prescribed for the purpose, XIX. Rates of Levy
together with copies of the tax
declarations and such affidavits or The province, city or municipality within
documents submitted in support of the MMA shall fix a UNIFORM rate of basic real
appeal. property tax:
- The owner/person who is not satisfied (2) City or Municipality: not exceeding
with the action of the provincial, city or 2% of the assessed value of real
municipal assesor.. property.
- * may appeal within 30 days from the XX. Exemptions from Real Property Tax
date of receipt of the decision of the (1) Owned by the Republic of the
board Philippines or any of its political
#The decision of the Central Board shall subdivisions. EXCEPT: when the beneficial
be final and executory. use thereof has been granted, for
consideration or otherwise, to a taxable
Appeal on the assessments of real person in which case, the latter shall be
property made under the provisions of liable
the Code,
(2) Charitable Institutions, Churches,
It will not suspend the collection of the Parsonages, or Convents appurtenant
realty taxes on the property involved thereto, Mosques, Non-profit or religious
without prejudice to subsequent cemeteries and all lands, buildings, and
adjustment depending upon the final improvements actually, directly, and
outcome of the appeal. exclusively used for religious, charitable, or
educational purposes.
(3) All machineries and equipment that are (b) After Accrual of the tax, from an
actually, directly, and exclusively used by local exempt person to a non-exempt
water districts and GOOCC engaged in the person, No liability to pay the tax
supply and distribution of water and/or because the exemption is vested.
generation and transmission of electric power.
(c) The purchaser is not liable for taxes
(4) ALL real properties Owned by duly due BEFORE his acquisition of the
registered Cooperatives as provided for under
property
R.A. No. 6938
2.) Property is held in Antichresis
(5) Machinery and equipment used for
pollution control and environmental protection. The creditor is obliged to pay the taxes
and charges upon the estate.
Any Exemption from payment of real
property tax previously granted to or BY the contract of antichresis, the
presently enjoyed by, all persons creditor acquires the right to
including Government Owned or receive the fruits of an immovable
Controlled Corporation (GOOCC) has of his debtor, with the obligation to
been withdrawn upon the effectivity of apply them to the payment of
the Code. interest, if owing, and thereafter to
the principal of the credit.
The law makes no distinction between
Property held in govt capacity and
those possessed in a proprietary 3 .) Property is subject to Usufruct
character
The taxes w/c during the
XXI. Persons liable to the TAX usufruct may be imposed
directly on the property to be
Generally, paid by the owner of the naked
Owner of the property with title.
respect to which the tax is levied. The realty tax being a burden upon
A tax on real estate ordinarily should be capital should be paid by the owner
assessed to the person appearing of of the land and not by the
record to be the owner or holder of the usufructuary.
LEGAL TITLE.
It attaches to the property and is (1) Additional levy on real property for the
chargeable against the taxable person Special Education Fund (SEF)
who had actual or beneficial use and
possession of it regardless of whether May levy an annual tax of 1% on the
or not he is the owner. assessed value of real property which
shall be in addition to the basic real
XXII. Special Levies on Real Property property tax.
Shall be properly bonded for the (1) No protest shall be entertained unless
purpose
the taxpayer first pays the tax.
The premium on the bond shall be Paid under protest annotated on
paid by the city or municipal govt. the Tax receipts
XXV. Installment Payment of Taxes > Protest must be in writing filed w/n
The owner may pay in 4 equal installments: 30 days from the payment of the tax to
the P/c/M treasurer.
On or before the End of each
Quarter in a Calendar Year. *w/n 60 days in the case of a
municipality w/n MMA. Who shall
1st.March 31 decide solely.
2nd June 30
3rd September 30
4th December 31
(2) The tax or a portion thereof paid under XXIX. Interest on Unpaid Taxes
protest shall be held in trust by the treasurer
concerned. Failure to pay the taxes upon the
expiration of the periods which they
(3) Protest is finally decided in favor of the
are due shall subject the taxpayer
taxpayer, the amount or portion of the tax to the payment of interest at the
protested shall be refunded to the protestant , rate of 2% per month on the unpaid
or applied as tax credit against his existing or amount or a fraction thereof, until
future tax liability. the delinquent tax shall be paid in
(4) If the protest is Denied, or upon lapse of the full.
60-day period prescribed in No.1. * Total interest computed shall not
> The taxpayer may appeal to the Local exceed 36 months.
Board of Assessment Appeals then, to Interest is Based on the Unpaid tax or
the Central Board of Assessment
a fraction thereof :
Appeals.
First was paid 2nd was not paid.
XXVIII. Notice of delinquency in the The taxpayer shall be held liable
payment of the tax for the penalty based on the 2nd
installment Not delinquent as
1.) When the tax becomes
against the first installment.
delinquent, the Province, City,
or Municipal treasurer shall XXX. Remedies for the collection of the
immediately cause a notice of Tax
the delinquency to be posted at
the main entrance of the For the collection of the tax and any
provincial capitol, or city or other special levy, The LGU
municipal hall and in a publicly concerned may avail of the
accessible and conspicuous remedies by administrative action
place in each brgy. Of the LGU through Levy on real property or by
concerned. judicial action.
3.) Specify the date upon which Owner has the right to redeem the
the tax became delinquent and property upon payment to the local
shall state that personal treasurer of the amount of the
property may be distrained to delinquent tax, plus interest and the
effect payment. expenses of sale from the date of
delinquency to the date of sale, plus
interest of not more than 2% per month XXXII. Periods within which to collect real
on the Purchase Price from the date of property Taxes
sale to the date of redemption.
Shall be collected within 5 years
Effect from the date they become due.
Payment shall invalidate the certificate
of sale issued to the purchaser and the No action for the collection of tax
owner of the delinquent real property shall be instituted after the
shall be entitled to a certificate of expiration of such period (
redemption w/c shall be issued by the administrative or judicial )
local treasurer or his deputy.
In case of fraud or intent to evade
Right of delinquent cases the tax,
From the date of sale until the *It shall be within 10 years from
expiration of the period of redemption, the discovery of such fraud or
the delinquent real property shall intent to evade.
remain in the possession of the owner
who shall be entitled to the income and If the collection is SUSPENDED:
other fruits thereof. (1) The local treasurer is legally
Right of Purchaser prevented from collecting the
tax.
The local treasurer or his deputy, upon
receipt from the purchaser of the (2) The owner requests for
certificate of sale, shall forthwith return reinvestigation and executes a
to the latter the entire amount paid by waiver in writing before the
him plus interest of not more than 2% expiration of the period within
per month. which to collect
Thereafter, the property shall be free (3) The owner is out of the country
from the lien of such delinquent tax, or cannot be located.
interest due, and expenses of sale.