Property tax on trees | Atty. Rodel C. Unciano

With the approach of the accumulation of the annual property tax, I take this opportunity to address the question of the imposition of the RPT on trees. Is it sanctioned by our laws?

Currently, some Local Government Units (LGUs) have adopted their own scales on how to tax trees in their respective jurisdictions. In a municipal tax ordinance, it contains a provision on the imposition of PTR on land, buildings, machinery, including plants and trees. In another local tax ordinance, fruit trees over 10 in number are subject to RPT taxation. The same ordinance exempts trees from the imposition of the RPT, only if there are not more than 10 trees planted in the enclosure of a dwelling house which does not exceed half a hectare.

In 1974, Presidential Decree 464 was promulgated, expressly exempting trees and perennials of economic value from property tax. However, in 1991 PD 464 was expressly repealed by the Local Authorities Code. However, the provisions of the LGC on property taxation, in Title II, are silent on the taxation of trees.

Under Article 218 of the LGC, immovable property mentioned as subject to property tax includes land, buildings and other structures, as well as machinery and other improvements. Trees are not specifically mentioned in this provision.

Considering the definition of “improvement” in section 199 of the LGC, it can be said that trees are not covered. As defined there, improvement is an addition of value to a property or an improvement in its condition, amounting to more than a simple repair or replacement of parts involving capital and labor expenditure, which is intended to enhance its value, beauty or utility, or to adapt it for new or future purposes. Of course, trees could not have been covered by this definition.

Article 415 of the Civil Code qualifies trees, among other things, as real or immovable property. However, for the purposes of imposing property tax, the Supreme Court in one case ruled that this provision would not apply since the LGC of 1991 expressly defined what is to be considered as subject to property tax. . The Court said that between the Civil Code, a general law governing property and real estate relations, and the Local Government Code, a special law granting LGUs the power to impose property tax, the latter would prevail.

In another case (CTA EB 377), the Fiscal Court of Appeal ruled that for the purposes of the RPT, there was no need to have recourse to article 415 of the Civil Code, since article 199 of the Local authority code already defined what is subject to the imposition of property tax. In these cases, however, the problem is with the imposition of the machines, not the trees.

In view of the above considerations, the imposition of property tax should not be made with reference to the definition of immovable property, under article 415 of the Civil Code. The LGC does not expressly list trees among the properties subject to the imposition of property tax. As in the Latin maxim, what the law expressly excludes should not be included (Expressio Unius Est Exclusio Alterius). Since the trees are not part of those expressly mentioned in the provisions of the LGC, they will not be subject to the RPT.

If we submit the trees to the RPT, I am afraid that one day we will not see any more trees in this country.


The author is a partner of Du-Baladad and Associates Law Offices, a member firm of WTS Global.

The article is for general information only and is not intended, nor should it be construed as a substitute for tax, legal or financial advice on any specific matter. The applicability of this article to any real or particular tax or legal question must therefore be supported by a study or professional advice. If you have any comments or questions regarding the article, you can email the author at [email protected] or call 8403-2001 local 140.

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