Redemption rules on tax delinquent property

Section 214 of the NIRC establishes a one-year redemption right for a delinquent taxpayer (or someone acting for him) after a sale of property in a public auction.
Section 214 requires redemption to be made by paying to the Revenue District Officer specified amounts, including public taxes, penalties, and interests, plus a redemption interest on the purchase price.
The law provides that redemption—once properly made—entitles the payer to specified certificates and requires the Revenue District Officer to pay the redemption proceeds to the purchaser.
Section 214 provides that, after redemption, the property is free from the lien of the redeemed taxes and penalties.
Section 214 preserves the owner’s possession and entitlement to rents and other income until the redemption period expires.

The circular is issued for the guidance of the taxpaying public and revenue officials handling redemption cases.
The circular is directed to the national and regional committees that conduct public auctions of seized/forfeited properties from delinquent taxpayers.
The circular’s purpose is to ensure uniform application of the interpretation of Section 214 in redemption of properties sold in public auction.

A delinquent taxpayer, or any one for him, has the right of paying within one (1) year from the date of sale.
Redemption must be made by payment to the Revenue District Officer.
The payment must cover amounts computed under Section 214, including components tied to (a) the period from date of delinquency to date of sale, and (b) the period from date of purchase to date of redemption.
The law recognizes that redemption is effected through payment and the issuance of the required certificates to the redeemer.

For redemption to be valid, the delinquent taxpayer (or any one for him) must pay all public taxes, together with interests and penalties.
The redemption payment must include:
- public taxes;
- penalties prescribed under Section 248 of the NIRC;
- interest prescribed under Section 249 of the NIRC computed from the date of delinquency to the date of sale; and
- interest on purchase price at 15% per annum from the date of purchase to the date of redemption.
Failure to pay all public taxes including interest and penalties makes the redemption invalid.
The circular emphasizes that redemption requires payment of every required component; redemption is not valid if any required component is unpaid.

The redeemer must pay the required sums to the Revenue District Officer within one (1) year from the date of sale.
Payment must be accompanied by the issuance of:
- a certificate issued to the purchaser; and
- a certificate from the Revenue District Officer that the property has been redeemed.
After redemption, the Revenue District Officer must forthwith pay over to the purchaser the amount by which the property has been redeemed.
Upon redemption, the property thereafter becomes free from the lien of such taxes and penalties.

The owner must not be deprived of possession of the property during the redemption period.
The owner remains entitled to the rents and other income of the property until expiration of the time allowed for its redemption.

All internal revenue officers and employees are enjoined to give the circular as wide a publicity as possible.
National and regional committees designated to conduct public auctions of seized/forfeited properties must use the circular’s interpretation when handling redemption.

Improper or incomplete redemption—specifically, failure to pay all public taxes including interest and penalties—results in invalid redemption.