Question & AnswerQ&A (Commonwealth Act No. 470)
The title of Commonwealth Act No. 470 is the Assessment Law.
All real property including land, buildings, machinery, and other improvements not specifically exempted, except in chartered cities, are subject to real property tax.
Properties exempt include those owned by the government (US, Commonwealth, province, city, municipality), cemeteries, churches and properties used exclusively for religious, charitable, scientific, or educational purposes, properties valued below certain thresholds, homesteaded lands without improvements, machinery used for industrial, agricultural or manufacturing purposes during the first five years of operation, fruit trees and bamboo plants (under conditions), airports used for aeronautical purposes until Dec 31, 1939, among others specified in Section 3.
Real property is valued and assessed at its true and full value according to the schedule of values in force in the municipality or municipal district where the property is located. For property types not classified or valued in the schedule, valuation is assessed independently at true and full value.
The provincial assessor is appointed by the President of the Philippines with the consent of the Commission on Appointments of the National Assembly. The provincial assessor has powers to establish assessment methods, prepare maps, keep records, receive declarations, fix values, cancel or correct assessments, and issue certified copies related to assessments.
The tax becomes due and payable on January 1, may be paid in two installments as determined by the provincial board, partial payment is allowed, taxes may be paid under protest, and penalties apply for late payments. The provincial board and the President may extend or postpone payment terms under certain conditions.
A penalty of 1% per month on the amount of delinquent tax or fraction thereof is imposed until full payment, but the total penalty shall not exceed 12%.
The provincial treasurer may seize and sell personal property (subject to exemptions) for delinquent taxes, advertise and auction delinquent real property, and purchase the property in the name of the province if no bidder or insufficient bids are received.
The taxpayer or any person on his behalf has the right to repurchase the sold property within one year by paying all taxes, penalties, costs, and interest at 12% per annum. The property remains in the possession and usufruct of the taxpayer during that year.
The Board of Tax Appeals hears appeals by property owners dissatisfied with assessments, takes action on complaints within 90 days, and its decisions can be appealed to the Secretary of Finance. It also has power to review assessments on its own motion to determine if they are unjust, erroneous, or unlawful.
Municipal councils may levy special assessments on lands specially benefited by public works such as streets, parks, bridges, waterworks, sewers, etc., not exceeding 60% of the cost of the improvements. The assessment is apportioned and payable in installments with no interest.
Protests must be filed within 30 days after publication of the ordinance and list of affected owners, signed by a majority of landowners representing more than half of the assessed value. The municipal council holds hearings and publishes decisions. Appeals from the council’s decision go to the provincial board, which holds a de novo hearing and renders a final decision.
It is their duty to assist the provincial assessor by providing necessary information, including registers of deeds and notaries furnishing copies of conveyances, insurance companies providing contracts or policies, and municipal officials aiding in notifications and collections.
Officers who willfully fail to assess taxable property may be fined up to one thousand pesos or imprisoned up to two years or both. Government officials who intentionally delay filing declarations or appeals may be fined up to five hundred pesos or imprisoned up to one year or both.
Courts will not entertain cases against taxes unless paid under protest and won't declare taxes invalid for irregularities unless substantial rights were impaired. Sales can only be challenged if the taxpayer pays the taxes, penalties, and sale costs into court. Judgments favorable to taxpayers result in refunds or returns accordingly.