STA.

LUCIA REALTY & DEVELOPMENT V CITY OF PASIG

G.R. No. 166838

Principle: 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.

Facts:

Petitioner Sta. Lucia Realty & Development, Inc. (Sta. Lucia) is the registered owner of several parcels of
land with Transfer Certificates of Title (TCT) Nos. 39112, 39110 and 38457, all of which indicated that the
lots were located in Barrio Municipality of Pasig (Pasig). Cainta filed a petition for the settlement of its
land boundary dispute with Pasig before the RTC, Branch 74 of Antipolo City (Antipolo RTC).

Pasig filed a Complaint, against Sta. Lucia for the collection of real estate taxes, including
penalties and interests, on the lots covered by TCT Nos. 532250, 598424, 599131, 92869, 92870 and
38457, including the improvements thereon (the subject properties).

Sta. Lucia, in its Answer, alleged that it had been religiously paying its real estate taxes to Cainta, just like
what its predecessors-in-interest did, by virtue of the demands and assessments made and the Tax
Declarations issued by Cainta on the claim that the subject properties were within its territorial jurisdiction.

Issue:

Whether Sta. Lucia should continue paying its real property taxes to Cainta, as it alleged to have always
done, or to Pasig, as the location stated in Sta. Lucias TCTs.

Ruling:

The court ruled that the resolution of the boundary dispute between Pasig and Cainta would
determine which local government unit is entitled to collect realty taxes from Sta. Lucia.

Under Local Government Code and Under Presidential Decree No. 464 or the Real Property Tax
Code, the authority to collect real property taxes is vested in the locality where the property is situated..
The only import of these provisions is that, while a 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.
Although it is true that Pasig is the locality stated in the TCTs of the subject properties, both Sta.
Lucia and Cainta aver that the metes and bounds of the subject properties, as they are described in the
TCTs, reveal that they are within Caintas boundaries. This only means that there may be a conflict
between the location as stated and the location as technically described in the TCTs.Mere reliance
therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject
properties locations if both the stated and described locations point to the same area.

The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending,
would be able to best determine once and for all the precise metes and bounds of both Pasigs and
Caintas respective territorial jurisdictions. The resolution of this dispute would necessarily ascertain the
extent and reach of each local governments authority, a prerequisite in the proper exercise of their
powers, one of which is the power of taxation.

GSIS V CITY TREASURER G.R. No. 186242 December 23, 2009

Facts:

Petitioner fileda suit to nullify the assessment of real property taxes on certain
properties. Petitioner GSIS owns or used to own two (2) parcels of land, one located at
Katigbak 25th St., Bonifacio Drive, Manila (Katigbak property), and the other, at
Concepcion cor. Arroceros Sts., also in Manila (Concepcion-Arroceros property). Both
the GSIS and the Metropolitan Trial Court (MeTC) of Manila occupy the Concepcion-
Arroceros property, while the Katigbak property was under lease.
The controversy started when the City Treasurer of Manila addressed a letter to
GSIS President and General Manager Winston F. Garcia informing him of the unpaid
real property taxes due on the aforementioned properties for years 1992 to 2002.
However, the GSIS argue that is entitled to the exemption from all kinds of taxes,
including realty taxes, under Republic Act No. (RA) 8291.

Issue:
1. whether GSIS under its charter is exempt from real property taxation?
2. Assuming that it is so exempt, whether GSIS is liable for real property taxes for
its properties leased to a taxable entity?

Ruling:
 1. Yes. GSIS Exempt from Real Property Tax. The SC ruled that Pursuant to Sec.
33 of PD 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.
However, the enactment of RA 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 to the City of Manila, it is, following City of Davao, only for
the interim period, or from 1992 to 1996, to be precise.

2. The leased Katigbak property shall be taxable pursuant to the beneficial use
principle under Sec. 234(a) of the LGC.

It is true that said Sec. 234(a), quoted below, exempts from real estate
taxes real property owned by the Republic, unless the beneficial use of the
property is, for consideration, transferred to a taxable person.

SEC. 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 usethereof has been granted, for
consideration or otherwise, to a taxable person.

The provisions allow the Republic to grant the beneficial use of its property
to an agency or instrumentality of the national government. Such grant does not
necessarily result in the loss of the tax exemption. The tax exemption the
property of the Republic or its instrumentality carries ceases only if, as stated in
Sec. 234(a) of the LGC of 1991, beneficial use thereof has been granted, for a
consideration or otherwise, to a taxable person. GSIS, as a government
instrumentality, is not a taxable juridical person under Sec. 133(o) of the LGC.
GSIS, however, lost in a sense that status with respect to the Katigbak property
when it contracted its beneficial use to MHC, doubtless a taxable person. Thus,
the real estate tax assessment of PhP 54,826,599.37 covering 1992 to 2002 over
the subject Katigbak property is valid insofar as said tax delinquency is concerned
as assessed over said property.