Understanding Real Estate Taxation | Business Seeker


(First of two parts)

Local authorities (LGU) enjoy local autonomy, that is to say, according to the Supreme Court, to exercise certain functions and exercise certain powers so as not to depend excessively on the national government, subject to the limitations that the 1987 Constitution or Congress may impose.

Thus, LGUs are empowered to create their own sources of income and to levy taxes, fees and charges, including property tax (RPT).

For the purposes of the RPT, the LGUs will assess all real estate, whether taxable or exempt, at their current and fair market value (FMV) in effect in the localities where they are located.

In addition, real estate should be classified, valued and valued based on its actual use, no matter where it is located, who owns it and who uses it. The appraisal also extends to equipment, instruments and machinery located on the property, whether permanently or temporarily attached to it.

For valuation purposes, real estate should be classified as residential, agricultural, commercial, industrial, mineral, forestry or special.

In this regard, the special categories of immovable property refer to land, buildings and other improvements which are actually there, directly and exclusively used for hospital, cultural or scientific purposes, and those owned and used by local river basin districts, and government owned. or controlled companies providing essential public services in the supply and distribution of water and / or the production and transmission of electrical energy.

All persons owning or administering real estate, including improvements, must prepare and file with the provincial, municipal or municipal assessor their tax returns, which indicate:, who will be the current and its fair market value; (b) a description of the property in sufficient detail to enable the appraiser or his assistant to identify it for the purposes of the appraisal. Tax returns are filed with the relevant assessor once every three years during the period January 1 to June 30.

If the owner or administrator has failed or refused to file the tax return, the competent appraiser himself declares the property in the name of the first, if he is known, or against an unknown owner, as the case may be. , and assesses the building for taxation in accordance with the local authority code.

In the meantime, all persons acquiring real estate or making improvements to it must prepare and file with said assessors their tax returns within 60 days of the acquisition of such property or upon completion or occupation. improvement, whichever comes first.

A person claiming a tax exemption for their property must file with the relevant appraiser within 30 days of filing their tax return sufficient documentary evidence to support that claim, including the charters of the company, the title deeds, articles of association, bylaws, contracts, affidavits, certifications, mortgage deeds and similar documents.

If the required evidence has not been produced within 30 days, the property is entered as taxable on the assessment roll. But, if it turns out that the property is exempt from tax, it is removed from the assessment roll.

In this regard, the following are exempt from the payment of RPT: (a) immovable property belonging to the Republic of the Philippines or to one of its political subdivisions, except where beneficial use has been granted to a taxable person, with or without taking it into account; (b) charitable institutions, churches, parsonages, mosques, alliances and all land, buildings and improvements actually, directly and exclusively used for religious, charitable or educational purposes; (c) machines and equipment used directly and exclusively for the supply and distribution of water and / or the production and transmission of electrical energy; (d) real estate belonging to duly registered cooperatives; and (e) machinery and equipment used for pollution control and environmental protection.

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