3. Antígenos Tn y STn
2.3 TÉCNICAS BIOFÍSICAS DE ANÁLISIS ESTRUCTURAL
1. The fundamental principles of real property taxation are:
a. Appraisal at current and fair market value;
b. Classification for assessment on the basis of actual use;
c. Assessment on the basis of uniform classification;
d. Appraisal, assessment, levy and collection shall not be let to a private person;
e. Appraisal and assessment shall be equitable.
NOTES AND COMMENTS: Real properties shall be appraised at the current and fair market value prevailing in the locality where the property is situated and classified for assessment purposes on the basis of its actual use. (Allied Banking Corporation, etc., v. Quezon City Government, et al., G. R. No. 154126, October 11, 2005)
2. The reasonable market value is determined by the assessor in the form of a schedule of fair market values.
The schedule is then enacted by the local sanggunian.
3. Fair market value is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy, taking into consideration all uses to which the property is adopted and might in reason be applied.
The criterion established by the statute contemplates a hypothetical sale. Hence, the buyers need not be actual and existing purchasers. (Allied Banking Corporation, etc., v.
Quezon City Government, et al., G. R. No.
154126, October 11, 2005 )
NOTES AND COMMENTS: In fixing the value of real property, assessors have to consider all the circumstances and elements of value and
must exercise prudent discretion in reaching conclusions. (Allied Banking Corporation, etc., v.
Quezon City Government, et al., G. R. No.
154126, October 11, 2005)
Preparation of fair market values:
a. The city or municipal assessor shall prepare a schedule of fair market values for the different classes of real property situated in their respective Local Government Units for the enactment of an ordinance by the sanggunian concerned; and
b. The schedule of fair market values shall be published in a newspaper of general circulation in the province, city or municipality concerned or the posting in the provincial capitol or other places as required by law. (Lopez v. City of Manila, et al., G.R. No. 127139, February 19, 1999)
Proposed fair market values of real property in a local government unit as well as the ordinance containing the schedule must be published in full for three (3) consecutive days in a newspaper of local circulation, where available, within ten (10) days of its approval, and posted in at lease two (2) prominent places in the provincial capitol, city, municipal or barangay hall for a minimum of three (3) consecutive weeks.
(Figuerres v. Court of Appeals, et al,. G.R. No.
119172, March 25, 1999)
4. Approaches in estimating the fair market value of real property for real property tax purposes ?
a. Sales Analysis Approach. The sales price paid in actual market transactions is considered by taking into account valid sales data accumulated from among the Registrar of Deeds, notaries public, appraisers, brokers, dealers, bank officials, and various sources stated under the Local Government Code.
b. Income Capitalization Approach.
The value of an income-producing property is no more than the return derived from it. An analysis of the income produced is necessary in order to estimate the sum which might be invested in the purchase of the property.
c. Reproduction cost approach is a formal approach used exclusively n appraising man-made improvements such as buildings and other structures, based on such data as materials and labor costs to reproduce a new replica of the improvement.
The assessor uses any or all of these approaches in analyzing the data gathered to arrive at the estimated fair market value to be included in the ordinance containing the schedule
of fair market values. (Allied Banking Corporation, etc., v. Quezon City Government, et al., G. R. No. 154126, October 11, 2005 citing Local Assessment Regulations No. 1-92)
5. An ordinance whereby the
“parcels of land sold, ceded, transferred and conveyed for remuneratory consideration after the effectivity of this revision shall be subject to real estate tax based on the actual amount reflected in the deed of conveyance or the current approved zonal valuation of the Bureau of Internal Revenue prevailing at the time of sale, cession, transfer and conveyance, whichever is higher, as evidenced by the certificate of payment of the capital gains tax issued therefore” is INVALID being contrary to public policy and for restraining trade for the following reasons:
a. It mandates an exclusive rule in determining the fair market value and departs from the established procedures such as the sales analysis approach, the income capitalization approach and the reproduction approach provided under the rules implementing the statute. It unduly interferes with the duties statutorily placed upon the local assessor by completely dispensing with his analysis and discretion which the Local Government Code and the regulations require to be exercised. An ordinance that contravenes any statute is ultra vires and void.
b. The “consideration approach” in the ordinance is illegal since “the appraisal, assessment, levy and collection of real property tax shall not be let to any private person”, it will also completely destroy the fundamental principle in real property taxation – that real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. Allowing the parties to a private sale to dictate the fair market value of the property will dispense with the distinctions of actual use stated in the Local Government Code and in the regulations.
c. The invalidity is not cured by the prhase “whichever is higher” because an integral part of that system still permits valuing real property in disregard of its “actual use.”
d. The ordinance would result to real property assessments more than once every three (3) years and that is not the congressional intent as shown in the provisions of the Local Government Code and the regulations.
Consequently, the real property tax burden should not be interpreted to include those beyond what the Code or the regulations expressly clearly state.
e. The proviso would provide a chilling effect on real property owners or administrators to enter freely into contracts reflecting the increasing value of real properties in accordance with prevailing market conditions.
While the Local Government Code provides that the assessment of real property shall not be increased once every three (3) years, the questioned proviso subjects the property to a higher assessment every time a sales transaction is made. Real property owners would therefore postpone sales until after the lapse of the three (3) year period, or if they do so within the said period they shall be compelled to dispose of the property at a price not exceeding the last prior conveyance in order to avoid a higher tax assessment.
In the above two scenarios real property owners are effectively prevented from obtaining the best price possible for their properties and unduly hampers the equitable distribution of wealth. (Allied Banking Corporation, etc., v. Quezon City Government, et al., G. R. No. 154126, October 11, 2005)
6. Examples of personal property under the civil law that may be considered as real property for purposes of taxes. Personal property under the civil law may be considered as real property for purposes of taxes where the property is essential to the conduct of the business.
a. Underground tanks are essential to the conduct of the business of a gasoline station without which it would not be operational. (Caltex Phils., Inc. v. Central Board of Assessment Appeals, et al., 114 SCRA 296)
b. Light Rail Transit (LRT) improvements such as buildings, carriageways, passenger terminals stations, and similar structures do not form part of the public roads since the former are constructed over the latter in such a way that the flow of vehicular traffic would not be impaired.
The carriageways and terminals serve a function different from the public roads. Furthermore, they are not open to use by the general public hence not exempt from real property taxes. Even granting that the national government owns the carriageways and terminal stations, the property is not exempt because their beneficial use has been granted to LRTA a taxable entity. (Light Rail
Transit Authority v. Central Board of Assessment Appeals, et al., G. R. No. 127316, October 12, 2000)
c. Barges on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the barges were subject to real property taxes.
Moreover, Article 415(9) of the Civil Code provides that “[d]ocks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake or coast” are considered immovable property by destination being intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work. (FELS Energy, Inc., v. Province of Batangas, G.
R. No. 168557, February 16, 2007 and companion case)
7. Unpaid realty taxes attach to the property and is chargeable against the person who had actual or beneficial use and possession of it regardless of whether or not he is the owner. To impose the real property tax on the subsequent owner which was neither the owner not the beneficial user of the property during the designated periods would not only be contrary to law but also unjust.
Consequently, MERALCO the former owner/user of the property was required to pay the tax instead of the new owner NAPOCOR.
(Manila Electric Company v. Barlis, G.R. No. 114231, May 18, 2001)
NOTES AND COMMENTS: The above May 18, 2001 decision was set aside by the Supreme Court when it granted the petitioner’s second motion for reconsideration on June 29, 2004. The author submits that the above ruling in the May 18, 2001 decision is still valid, not on the basis of the May 18, 2001 decision but in the light of pronouncements of the Supreme Court in other cases. Thus, do not cite the doctrine as emanating from the May 18, 2001 decision.
8. Secretary of Justice can take cognizance of a case involving the constitutionality or legality of tax ordinances where there are factual issues involved. (Figuerres v. Court of Appeals, et al., G.R.
No. 119172, March 25, 1999)
Taxpayer files appeal to the Secretary of Justice, within 30 days from effectivity thereof. In case the Secretary
decides the appeal, a period also of 30 days is allowed for an aggrieved party to go to court. But if the Secretary does not act thereon, after the lapse of 60 days, a party could already seek relief in court within 30 days from the lapse of the 60 day period.
These three separate periods are clearly given for compliance as a prerequisite before seeking redress in a competent court. Such statutory periods are set to prevent delays as well as enhance the orderly and speedy discharge of judicial functions. For this reason the courts construe these provisions of statutes as mandatory. (Reyes, et al., v. Court of Appeals, et al., G.R. No. 118233, December 10, 1999)
9. Public hearings are mandatory prior to approval of tax ordinance, but this still requires the taxpayer to adduce evidence to show that no public hearings ever took place.
(Reyes, et al., v. Court of Appeals, et al., G.R. No.
118233, December 10, 1999) Public hearings are required to be conducted prior to the enactment of an ordinance imposing real property taxes.
(Figuerres v. Court of Appeals, et al., G.R. No. 119172, March 25, 1999)
10. The concurrent and
simultaneous remedies afforded local government units in enforcing collection of real property taxes:
a. Distraint of personal property;
b. Sale of delinquent real property, and c. Collection of real property tax through ordinary court action.
11. Notice and publication, as well as the legal requirements for a tax delinquency sale, are mandatory, and the failure to comply therewith can invalidate the sale.
The prescribed notices must be sent to comply with the requirements of due process. (De Knecht, et al,. v. Court of Appeals; De Knecht, et al., v.
Honorable Sayo, 290 SCRA 223,236)
12. The reason behind the notice requirement is that tax sales are administrative proceedings which are in personam in nature. (Puzon v. Abellera, 169 SCRA 789, 795; De Asis v. I.A.C., 169 SCRA 314)
13. FELS Energy, Inc., had a contract to supply NPC with the electricity generated by FELS’ power barges. The contract also stated that NPC shall be
responsible for all real estate taxes and assessments. FELS then received an assessment of real property taxes on its power barges from the Provincial Assessor of Batangas. If filed a motion for reconsideration with the Provincial Assessor.
a. Upon denial, FELS elevated the matter to the Local Board of Assessment Appeals (LBAA), where it raised the following issues:
1) Since NPC is tax-exempt then FEL’s should also be tax-exempt because of its contract with NPC.
2) The power barges are not real property subject to real property taxes.
b. Upon the other hand the Local Treasurer insists that the assessment has attained a state of finality hence the appeal to the LBAA should be dismissed.
Rule on the conflicting contentions.
SUGGESTED ANSWER:
a. All the contentions of FELS are without merit:
1) NPC is not the owner of the power barges nor the operator of the power barges. The tax exemption privilege granted to NPC cannot be extended to FELS. the covenant is between NPC and FELs and does not bind a third person not privy to the contract such as the Province of Batangas.
2) The Supreme Court of New York in Consolidated Edison Company of New York, Inc., et al., v. The City of New York, et al., 80 Misc. 2d 1065 (1975) cited in FELS Energy, Inc., v. Province of Batangas, G. R. No. 168557, February 16, 2007 and companion case, held that barges on which were mounted gas turbine power plants designated to generate electrical power, the fuel oil barges which supplied fuel oil to the power plant barges, and the accessory equipment mounted on the barges were subject to real property taxes.
Moreover, Article 415(9) of the Civil Code provides that “[d]ocks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake or coast” are considered immovable property by
destination being intended by the owner for an industry or work which may be carried on in a building or on a piece of land and which tend directly to meet the needs of said industry or work.
b. The Treasurer is correct. The procedure do not allow a motion for reconsideration to be filed with the Provincial Assessor.
To allow the procedure would indeed invite corruption in the system of appraisal and assessment. it conveniently courts a graft-prone situation where values of real property ay be initially set unreasonably high, and then subsequently reduced upon the request of a property owner. In the latter instance, allusions of possible cover, illicit trade-off cannot be avoided, and in fact can conveniently take place. Such occasion for mischief must be prevented and excised from our system. (FELS Energy, Inc., v.
Province of Batangas, G. R. No. 168557, February 16, 2007 and companion case)
14. A special levy or special assessment is an imposition by a province, a city, a municipality within the Metropolitan Manila Area, a municipality or a barangay upon real property specially benefited by a public works expenditure of the LGU to recover not more than 60% of such expenditure.
15. If the ground for the protest is validity of the real property tax ordinance and not the unreasonableness of the amount collected the tax must be paid under protest, and the issue of legality may be raised to the proper courts on certiorari without need of exhausting administrative remedies.
16. If the ground for the protest is unreasonableness of the amounts collected there is need to pay under protest and administrative remedies must be resorted to before recourse to the proper courts.
17. Procedure for refund of real
property taxes based on
unreasonableness or excessiveness of amounts collected.
a. Payment under protest at the time of payment or within thirty (30) days thereafter, protest being lodged to the provincial, city or in the case of a municipality within the Metro Manila Area the municipal treasurer.
b. The treasurer has a period of sixty (60) days from receipt of the protest within to decide.
c. Within thirty (30) days from receipt of treasurer’s decision or if the treasurer does not decide, within thirty (30) days from the expiration of the sixty (60) period for the treasurer to decide, the taxpayer should file an appeal with the Local Board of Assessment Appeals.
d. The Local Board of Assessment Appeals has 120 days from receipt of the appeal within which to decide.
e. The adverse decision of the Local Board of Assessment Appeals should be appealed within thirty (30) days from receipt to the Central Board of Assessment Appeals.
f. The adverse decision of the Central Board of Assessment Appeals shall be appealed to the Court of Tax Appeals (En Banc) by means of a petition for review within thirty (30) days from receipt of the adverse decision.
g. The decision of the CTA may be the subject of a motion for reconsideration or new trial after which an appeal may be interposed by means of a petition for review on certiorari directed to the Supreme Court on pure questions of law within a period of fifteen (15) days from receipt extendible for a period of thirty (30) days.
18. The entitlement to a tax refund does not necessarily call for the automatic payment of the sum claimed.
The amount of the claim being a factual matter, it must still be proven in the normal course and in accordance with the administrative procedure for obtaining a refund of real property taxes, as provided under the Local Government Code.
(Allied Banking Corporation, etc., v. Quezon City Government, et al., G. R. No. 154126, September 15, 2006)
NOTES AND COMMENTS: In the above Allied Banking case, the Supreme Court provided for the starting date of computing the two-year prescriptive period within which to file the claim with the Treasurer, which is from finality of the Decision. The procedure to be followed is that shown below.
19. Procedure for refund of real property taxes based on validity of the tax measure or solutio indebeti.
a. Payment under protest not required, claim must be directed to the local treasurer, within two (2) years from the date the taxpayer is entitled to such reduction or readjustment, who must decide within sixty (60) days from receipt.
b. The denial by the local treasurer of the protest would fall within the Regional Trial Court’s original jurisdiction, the review being the initial judicial cognizance of the matter. Despite the language of Section 195 of the Local Government Code which states that the remedy of the taxpayer whose protest is denied by the local treasurer is “to appeal with the court of competent jurisdiction,” labeling the said review as an exercise of appellate jurisdiction is inappropriate since the denial of the protest is not the judgment or order of a lower court, but of a local government official. (Yamane , etc. v. BA Lepanto Condominium Corporation, G. R. No.
154993, October 25, 2005)
c. The decision of the Regional Trial Court should be appealed by means of a petition
c. The decision of the Regional Trial Court should be appealed by means of a petition