Real Property Taxation (Ateneo Blue Tips 2019)

Q147: What are the fundamental principles in real property taxation?

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 government unit;
4) The appraisal, assessment, levy and collection of real property tax shall not be let to any private person; and
5) The appraisal and assessment of real property shall be equitable. (LGC, Sec. 198)

Q148: What types of real property are exempt from RPT?

1) Property owned by the government, except for private commercial use;
2) Real properties owned by cooperatives duly registered with the CA;
3) Real property actually, directly and exclusively (A/D/E) used for religious, charitable or educational purposes, and non-profit or religious cemeteries;
4) Machinery and equipment used for pollution control and environmental protection;
5) Machinery and equipment A/D/E used by local water districts and GOCCs in the supply and distribution of water and electricity. (LGC, Sec. 234)

Q149: Will the Real Property Tax Exemption given to cooperatives apply even if the land owned by the cooperative is leased to a taxable entity?
Yes. The exemption is given without distinction as the law does not specify whether the property owned by the cooperative is used by the cooperative or not. (Assessor of Agusan Del Sur v. Filipinas Palm Oil, 2016)

Q150: A rented B's land for the operations of his gas station business. A installed certain machinery and equipment necessary to his business. He was assessed by the City of Laguna for Real Property Tax on the said improvements. A contended that since he does not own the land, the said improvements are not real property. Is A correct?

No. The said equipment and machineries are necessary to the operation of the gas station, for without them the gas station would be useless, and have been attached or fixed permanently to the gas station site or embedded therein. Thus, these are taxable improvements and machinery. (Caltex v. Central Board of Assessment Appeals, 1982)

Q151: Are government instrumentalities exempt from real property tax?
Yes. Government instrumentalities and their properties actually, solely and exclusively used for public purposes, are not subject to real property tax. Examples are BSP, LLDA, Fisheries Development Authority, BCDA, Philippine Port Authority, Philippine National Railways, Manila International Airport Authority, GSIS, PEZA. (Mactain Cebu International Airport v. City of Lapu-lapu, 2015)

Q152: May submarine communications cables be classified as taxable real property by the local governments?
Yes. Submarine or undersea communications cables may qualify as machinery subject to real property tax. (Capitol Wireless v. Provincial Treasurer of Batangas, 2016)

Q153: Are pipeline systems considered machinery, subject to real property tax?
Yes. A pipeline system is a construction adhering to the soil. It is attached to the land in such a way that it cannot be separated therefrom without dismantling the steel pipes which were welded to form the pipeline. (Meralco v. Central Board of Assessment Appeals, 1982)

Q154: How is location determined for purposes of identifying the LGU entitled to collect taxes?
The location stated in the certificate of title should be followed until amended through proper judicial proceedings. (Municipality of Cainta v. City of Pasig and Uniwide, 2017)

Q155: When are Idle Lands exempt from Tax?
Idle lands may be exempt from tax by reason of force majeure, civil disturbance, natural calamity, or any cause or circumstance which physically or legally prevents the owner of the property or person having legal interest therein from improving, utilizing, or cultivating the same. (Sect. 238, LGC)

Q156: When should a claim for refund be filed?
It may be filed within 2 years from the date the taxpayer is entitled to such reduction or adjustment. The counting from the time of entitlement is known as the supervening cause doctrine. (LGC, Sect. 253)

Q157: When are assessments appealable to the LBAA?
The notice of assessment gives the owner of the property the right to appeal to the LBAA. (Callanta v.. Office of the Ombudsman, 1998)

Q158: What is the effect of failure to appeal to the LBAA within the prescribed period?
The Provincial Assessor's assessment becomes final, executory, and demandable. Perfection of an appeal within the period is both mandatory and jurisdictional. (FELS Energy, Inc. Province of Batangas, 2007)

Q159: What is the effect of Appeal on the Payment of Real Property Tax?
It shall not suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal. (Sec. 231, LGC)