Law Summary
Property Exemptions
- Exemptions include properties owned by the U.S., Philippine Government, provinces, and municipalities.
- Cemeteries, religious, charitable, scientific, educational institutions, and their appurtenant properties.
- Properties below certain assessed values, homesteaders' land (excluding improvements), agricultural machinery, fruit trees, and bamboo plants under certain conditions.
Valuation and Assessment Principles
- Property is assessed at its true and full value based on municipal schedules.
- For properties not classified, value is determined independently.
Distribution of Tax Proceeds
- Proceeds are divided between provinces and municipalities based on a set percentage rate.
- Provinces levy between 0.125% to 0.375% (or 0.5% for special provinces).
- Municipalities levy between 0.25% to 0.5% (or 0.625% for special municipalities).
Special Allocations of Tax Revenue
- First 0.125% for provinces goes to road/bridge or public works funds.
- First 0.25% for municipalities accrues to the school fund.
- Remaining portions go to general funds.
Provincial Assessor: Appointment and Powers
- Provincial assessor appointed by the Department head upon provincial board nomination.
- Must be a provincial resident; salary fixed by provincial board and approved by the Department head.
- Powers include establishing assessment methods, preparing property maps, keeping records of transfers and improvements, fixing and revising assessments, canceling duplicate or improper declarations, and hearing appeals.
Preparation and Amendment of Valuation Schedules
- Assessor prepares schedules of property values before general revisions.
- Municipal councils approve or reject schedules; provincial boards review disputes.
- Appeals to Secretary of the Interior are final.
Assessment Revision and Certification
- General assessment revision mandated by provincial board, but not more than once every two years.
- Certification of revised assessments to provincial board makes assessment effective.
Property Declaration Requirements
- Property owners or representatives must declare real property values with detailed descriptions, verified under oath.
- New declarations required upon acquiring property or making improvements.
Procedures for Unreported Property and Evidence Gathering
- Assessors may declare property upon owner’s failure or refusal.
- May summon witnesses, administer oaths, and take depositions limited to municipal boundaries.
Notification and Appeal on Assessment
- Assessors must notify owners of increased assessments.
- Owners may appeal to municipal councils, which act within thirty days.
- Further appeals to provincial boards and Secretary of the Interior; decisions may be final.
Tax Payment and Lien
- Taxes due on January 1 annually, creating a lien superior to all other liens except possibly government claims.
- Notices of tax collection posted in government buildings and published.
- Option for payment in two installments with certain deadlines.
Partial and Protested Payments
- Payments may be made on parts or parcels.
- Payments under protest must be annotated and confirmed in writing.
Extensions and Postponements of Payment
- Provincial boards may extend payment deadlines up to three months with Governor-General’s approval.
- Governor-General may postpone payments within the same calendar year.
Delinquency and Penalties
- Penalty of 2% per month on original tax amount for late payments.
- Provincial treasurer issues certificates for distraint (seizure) of personal property for delinquent tax.
Exemptions from Seizure
- Tools necessary for occupation, one animal of burden, clothing, household furniture (up to value limit), provisions for family for four months, professional libraries (with value cap), fishing equipment (with value cap), and building materials.
Sale and Redemption of Distrained Personal Property
- After advertising, seized personal property sold at auction to satisfy taxes and costs; purchaser acquires indefeasible title.
- Owners may redeem property before sale by paying tax, penalty, and costs.
Forfeiture and Ownership Transfer of Real Property
- If taxes unpaid for one year after delinquency, ownership vests absolutely in provincial government, subject to redemption rights.
Redemption and Repurchase Rights
- Owner or interest holders can redeem delinquent property within ninety days from notice publication.
- Rights revert property title to the owner; repurchaser may pay in installments with conditions.
- Repurchase before sale possible upon payment of due taxes and penalties.
Notification and Sale of Real Property
- Public notice of property sale post-embargo via publication and posting.
- Sale held at municipal building or property site; payment may be in installments with conditions.
- Failure to complete payments results in cancellation of sale and forfeiture of payments.
Post-sale Redemption
- Within one year from sale, owner or authorized person may repurchase property by paying taxes, penalties, and interest on purchase price at 12% per annum.
- Repurchase invalidates sale certificate; purchaser refunded upon return of certificate.
Final Conveyance
- If no redemption within one year and full payment made, provincial treasurer issues deed conveying property free from encumbrances.
- Surplus sale proceeds returned to original owner.
Tax and Penalty Composition upon Redemption
- Redemption payment includes only original tax and penalties up to date of seizure.
Utilization of Delinquent Tax Proceeds
- Proceeds from delinquent taxes, penalties, and income from leased distrained land allocated to provincial and municipal governments as regular taxes.
Special Assessments by Municipal Councils
- Councils may levy special assessments up to 60% cost on real estate especially benefited by public works (roads, sidewalks, waterworks, sewers, etc.).
- Assessment based on property valuations; different rates may apply per zone.
Ordinance Procedure for Special Assessments
- Ordinance must describe work, cost estimate, percentage levied, district boundaries, and installment terms (5 to 10 years, no interest).
- Plans and estimates prepared by district engineer.
Publication and Protest of Special Assessment Ordinances
- Ordinance and list of affected owners published weekly for four weeks in available languages.
- Property owners may protest within 30 days if signed by majority by number and value.
- Municipal council holds hearings and renders decision; decisions subject to appeal to provincial board.
- Provincial board decision on appeal is final.
Implementation and Collection of Special Assessments
- Provincial assessor determines amounts and notifies owners.
- Adjustments made if actual cost varies.
- Collection enforced like regular taxes with same penalties and liens, except ordinary land tax lien takes precedence.
Judicial Enforcement
- Provincial treasurer may seek court enforcement against delinquent owners residing outside municipality who have lessees exempt from tax payment.
Refund of Excessive Assessments
- Taxpayers entitled to refund if assessment is reduced due to error or injustice.
- Notice of refund issued; taxpayer may pay reduced tax within 60 days without penalty.
Tax Remission
- Provincial boards may partially or wholly remit taxes or penalties for widespread disasters with Secretary of the Interior approval.
- Governor-General may remit or reduce taxes in the public interest.
Judicial Restrictions on Tax Challenges
- Courts may not entertain suits challenging tax validity unless taxpayer paid tax under protest.
- Courts to uphold tax unless substantial rights impaired; conditionally require taxpayer to pay just amount.
Judicial Restrictions on Forfeiture Challenges
- Courts may not hear suits challenging forfeiture validity without taxpayer paying delinquency amount into court.
- Money paid applied to taxes if successful; otherwise returned minus costs.
Officer Cooperation and Reporting Duties
- Municipal and provincial officers required to assist assessor.
- Register of deeds, notaries, and insurance companies must provide contract copies to the assessor.
Tax Payment Evidence for Notaries
- Notaries prohibited from acknowledging property conveyance documents without proof of current year tax payment.
Rulemaking by Department Head
- Department Head authorized to promulgate rules, forms, and procedure to implement the Act.
Penal Provisions
- Officers omitting property from assessment lists face fines and imprisonment.
- Government agents delaying declarations or appeals face fines or imprisonment.
- Unlawful reentry upon forfeited property punishable by fines and imprisonment.
Repeal Clause and Effective Date
- Certain Administrative Code sections and inconsistent laws repealed.
- Act effective upon approval on December 5, 1932.