RPT is an ad valorem tax
When you say an ad valorem tax, this is a tax which is
TAX REV FINALS
a fixed proportion of a definite or particular value. It is
an ad valorem tax because the tax is computed as a
fixed proportion of a particular value.
REAL PROPERTY TAXATION (RPT)
Fundamental Principles
1. Fundamental Principles
2. Specific kinds of RPT
3. Imposition
4. Exemptions
5. Appraisal and assessment process
6. Remedies of the Government
7. Remedies of the Taxpayer
REAL PROPERTY TAXATION
FUNDAMENTAL PRINCIPLES
Real property tax is a tax on property
Real property tax is a form of local tax, but as the term
suggests, these are taxes imposed on real properties.
The tax is imposed on the property such that if the
property is transferred to another person, the liability
will be transferred also to the transferee. The tax is not
attached to the owner, it is attached on the property.
The valuation of the real property is based on the
classification of the real property. The classification of
the property is based on the use of the property.
Liability for payment of RPT
In real estate taxation, the unpaid tax attaches to the
property. The personal liability for the tax delinquency
is generally on whoever is the owner of the real
property at the time the tax accrues. This is a
necessary consequence that proceeds from the fact of
ownership. Nonetheless, where the tax liability is
imposed on the beneficial use of the real property, such
as those owned but leased to private persons or
entities by the government, or when the assessment is
made on the basis of the actual use thereof, the
personal liability is on any person who has such
beneficial or actual use at the time of the accrual of the
tax.
Section 234 enumerates the persons and real property
exempt therefrom. The tax exemption of real property
owned by the Republic, its political subdivisions,
agencies or instrumentalities carries, however, ceases
if the beneficial use of the real property has been
granted, for a consideration or otherwise, to a taxable
person. In such case, the corresponding liability for the
payment of the RPT devolves on the taxable beneficial
user. (Herarc Realty Corp. v. The Provincial Treasurer
of Batangas, G.R. No. 210763, September 5, 2018)
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SEC. 198. Fundamental Principles. -
The appraisal, assessment, levy and
collection of real property tax shall be
guided by the following fundamental
principles:
(a) Real property shall be appraised
at its current and fair market value;
(b) Real property shall be classified
for assessment purposes on the
basis of its actual use;
(c) Real property shall be assessed
on the basis of a uniform
classification within each local
government unit;
(d) The appraisal, assessment, levy
and collection of real property tax
shall not be let to any private person;
and
(e) The appraisal and assessment of
real property shall be equitable.
KINDS OF RPT
BASIC RPT
SEC. 233. Rates of Levy. - A province
or city or a municipality within the
Metropolitan Manila Area shall fix a
uniform rate of basic real property tax
applicable to their respective
localities as follows:
(a) In the case of a province, at the
rate not exceeding one percent (1%)
of the assessed value of real
property; and
(b) In the case of a city or a
municipality within the Metropolitan
Manila Area, at the rate not
exceeding two percent (2%) of the
assessed value of real property.
ADDITIONAL LEVY ON REAL PROPERTY FOR
SPECIAL EDUCATION FUND
 SEC. 235. Additional Levy on Real
Property for the Special Education
Fund. - A province or city, or a
municipality within the Metropolitan
Manila Area, may levy and collect an
annual tax of one percent (1%) on the
assessed value of real property which
shall be in addition to the basic real
107 property tax. The proceeds
thereof shall exclusively accrue to the
Special Education Fund (SEF).
The difference between the SEF and the BRPT is that
the BRPT accrues to the general fund of the local
government unit but the SEF accrues to the SEF; it
must be used for educational purposes only.
Levying 0.5% as SEF
The operative phrase in Section 235’s grant to
municipalities in Metro Manila, cities, and provinces of
the power to impose an additional levy for the special
education fund is prefixed with "may," thus, "may levy
and collect an annual tax of one percent (1%)."
Section 235’s permissive language is unqualified.
Moreover, there is no limiting qualifier to the articulated
rate of 1% which unequivocally indicates that any and
all special education fund collections must be at such
rate.
Any ambiguity must be read in favor of local fiscal
autonomy. As in San Juan v. Civil Service
Commission, the scales must weigh in favor of the local
government unit.
Fiscal autonomy entails "the power to
create . . . own sources of revenue."
In turn, this power necessarily entails
enabling local government units with
the capacity to create revenue
sources in accordance with the
realities and contingencies present in
their specific contexts. The power to
create must mean the local
government units’ power to create
what is most appropriate and optimal
for them; otherwise, they would be
mere automatons that are turned on
and off to perform prearranged
operations.
Accordingly, it was well within the power of the
Sangguniang Panlalawigan of Palawan to enact an
ordinance providing for additional levy on real property
tax for the special education fund at the rate of 0.5%
rather than at 1%. (Demaala v. COA, G.R. No. 199752,
February 17, 2015)
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ADDITIONAL AD VALOREM TAX ON IDLE LANDS
SEC. 236. Additional Ad Valorem Tax
on Idle Lands. - A province or city, or
a municipality the Metropolitan Manila
Area, may levy an annual tax on idle
lands at the rate not exceeding five
percent (5%) of the assessed value of
the property which shall be in addition
to the basic real property tax.
What are considered Idle Lands?
a. Agricultural land that is:
1. More than 1 hectare and suitable for
agricultural uses; and
2. ½ of which remain uncultivated or unimproved.
The ff are not considered idle agricultural land:
 Agricultural lands planted with permanent
or perennial crops with at least 50 trees to
a hectare.
 Lands actually used for grazing purposes.
b. Lands, other than agricultural, that is:
1. Located in a city or municipality with more than
1,000 sqm in area
2. ½ of which remain unutilized or unimproved.
c. Residential lots in subdivisions duly approved by
the proper authorities regardless of the land area.
SEC. 238. Idle Lands Exempt from
Tax. - A province or city or a
municipality within the Metropolitan
Manila Area may exempt idle lands
from the additional levy by reason of
force majeure, civil disturbance,
natural calamity or any cause or
circumstance which physically or
legally prevents the owner of the
property or person having legal
interest therein from improving,
utilizing or cultivating the same.
SPECIAL LEVY
SEC. 240. Special Levy by Local
Government Units. - A province, city
or municipality may a special levy on
the lands comprised within its
territorial jurisdiction specially
benefited by public works projects or
improvements funded by the local
government unit concerned:
Provided, however, That the special
 levy shall not exceed sixty percent
(60%) of the actual cost of such
projects and improvements, including
the costs of acquiring land and such
other real property in connection
therewith: Provided, further, That the
special levy shall not apply to lands
exempt from basic real property tax
and the remainder of the land
portions of which have been donated
to the local government unit
concerned for the construction of
such projects or improvements.
The LGU that can impose this kind of real property tax
is a province, city, or any municipality. This kind of tax
is being assessed because the owner of the real
property benefited directly or indirectly from the public
works funded by the local government unit.
Remember that for special levy to be collected, there
must be a public hearing. It is required by the Local
Government Code that a public hearing must be called
and a notice must be sent to the owners who will be
specially levied.
IMPOSITION
Who can impose RPT?
1. Province
2. City
3. Municipality within the Metropolitan Manila
area
There must be a valid ordinance passed by the
Sanggunian.
What is the subject of RPT?
Land, building, and machinery. The building
contemplated here must be of permanent nature.
If the real property falls under the definition of the Civil
Code, then it is subject to RPT. However, we are not
confined to the said definition.
If it is a machinery, look at the definition provided under
par. (o), Sec. 199 of the Local Government Code.
SEC. 199. Definitions. –
(o) "Machinery" embraces machines,
equipment, mechanical contrivances,
instruments, appliances or apparatus
which may or may not be attached,
permanently or temporarily, to the
real property. It includes the physical
facilities for production, the
installations and appurtenant service
facilities, those which are mobile, self-
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powered or self-propelled, and those
not permanently attached to the real
property which are actually, directly,
and exclusively used to meet the
needs of the particular industry,
business or activity and which by their
very nature and purpose are
designed for, or necessary to its
manufacturing, mining, logging,
commercial, industrial or agricultural
purposes;
While the Local Government Code still does not
provide for a specific definition of "real property,"
Sections 199(o) and 232 of the said Code,
respectively, gives an extensive definition of what
constitutes "machinery" and unequivocally subjects
such machinery to real property tax. The Court
reiterates that the machinery subject to real property
tax under the Local Government Code "may or may not
be attached, permanently or temporarily to the real
property;" and the physical facilities for production,
installations, and appurtenant service facilities, those
which are mobile, self-powered or self-propelled, or are
not permanently attached must (a) be actually, directly,
and exclusively used to meet the needs of the
particular industry, business, or activity; and (2) by their
very nature and purpose, be designed for, or
necessary for manufacturing, mining, logging,
commercial, industrial, or agricultural purposes.
(MERALCO v. The City Assessor ad City Treasurer of
Lucena City. G.R. No. 166102, August 05, 2015)
Doctrine of Essentiality
Under the Doctrine of Essentiality of Properties,
properties considered as personal under the Civil Code
may nonetheless be considered real property for tax
purposes where said property is essential to the
conduct of the business.
The property to be considered immobalized for RPT
must be essential and a principal element of industry.
Without which, such industry will be unable to carry on
the principal purpose for which it was established.
The Supreme Court held that the said equipment and
machinery, as appurtenances to the gas station
building or shed owned by Caltex (as to which it is
subject to realty tax) and which fixtures are necessary
to the operation of the gas station, for without them
the gas station would be useless, and which have
been attached or affixed permanently to the gas station
site or embedded therein, are taxable improvements
and machinery within the meaning of the Assessment
Law and the Real Property Tax Code. (Caltex
(Philippines) Inc. v. Central Board of Assessment
Appeals, G.R. No. L-50466 May 31, 1982)
Submarine or undersea communications cables are
akin to electric transmission lines which this Court has
recently declared in Manila Electric Company v. City
Assessor and City Treasurer of Lucena City, as "no
longer exempted from real propety tax" and may qualify
as "machinery" subject to real property tax under the
Local Government Code. To the extent that the
equipment's location is determinable to be within the
taxing authority's jurisdiction, the Court sees no reason
to distinguish between submarine cables used for
communications and aerial or underground wires or
lines used for electric transmission, so that both pieces
of property do not merit a different treatment in the
aspect of real property taxation. Both electric lines and
communications cables, in the strictest sense, are not
directly adhered to the soil but pass through posts,
relays or landing stations, but both may be classified
under the term "machinery" as real property under
Article 415(5) of the Civil Code for the simple reason
that such pieces of equipment serve the owner's
business or tend to meet the needs of his industry or
works that are on real estate. (Capitol Wireless, Inc. v.
Provincial Treasurer of Batangas, G.R. No. 180110,
May 30, 2016)
EXEMPTIONS FROM RPT
In Mactan Cebu International Airport Authority v. Hon.
Marcos, this court classified the exemptions from real
property taxes into ownership, character, and usage
exemptions.
Ownership exemptions are exemptions based on the
ownership of the real property. The exemptions of real
property owned by the Republic of the Philippines,
provinces, cities, municipalities, barangays, and
registered cooperatives fall under this classification.
Character exemptions are exemptions based on the
character of the real property. Thus, no real property
taxes may be levied on charitable institutions, houses
and temples of prayer like churches, parsonages, or
convents appurtenant thereto, mosques, and non
profitor religious cemeteries.
Usage exemptions are exemptions based on the use
of the real property. Thus, no real property taxes may
be levied on real property such as: (1) lands and
buildings actually, directly, and exclusively used for
religious, charitable or educational purpose; (2)
machineries and equipment actually, directly and
exclusively used by local water districts or by
government-owned or controlled corporations
engaged in the supply and distribution of water and/or
generation and transmission of electric power; and (3)
machinery and equipment used for pollution control
and environmental protection.
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Persons may likewise be exempt from payment of real
properties if their charters, which were enacted or
reenacted after the effectivity of the Local Government
Code, exempt them payment of real property tax es.
(City of Lapu-Lapu v. PEZA, G.R. Nos. 184203 &
187583, November 26, 2014)
(a) Real property owned by the Republic of the
Philippines or any of its political subdivisions except
when the beneficial use thereof has been granted, for
consideration or otherwise, to a taxable person; (Sec.
234, LGC)
If the real property is owned by the Republic of the
Philippines or its political subdivisions, the general rule
is that it will be exempt from real property tax but the
beneficial use has been granted to a taxable person for
consideration or otherwise, it will be exempt from real
property tax.
Government Instrumentalities
1. Manila International Airport Authority
2. Mactan-Cebu International Airport Authority
3. Philippine Ports Authority
4. University of the Philippines
5. Bangko Sentral ng Pilipinas
6. Philippine Rice Research Institute
7. Laguna Lake Development Authority
8. Philippine Fisheries Development Authority
9. Bases Conversion Development Authority
10. Philippine National Railways
11. Cagayan de Oro Port Authority
12. San Fernando Port Authority
13. Cebu Port Authority
14. Philippine Reclamation Authority,
15. Philippine Economic Zone Authority
16. Government Service Insurance System
Can RPT be assessed and collected against PEZA?
PEZA is an instrumentality of the national government.
It is not integrated within the department framework but
is an agency attached to the Department of Trade and
Industry. Being an instrumentality of the national
government, the PEZA cannot be taxed by local
government units.
Although a body corporate vested with some corporate
powers, the PEZA is not a government-owned or
controlled corporation taxable for real property taxes.
Further, real properties under the PEZA’s title are
owned by the Republic of the Philippines. (City of Lapu-
Lapu v. PEZA, supra)
What if PEZA granted the beneficial use of its real
properties to other persons by way of lease, can
RPT be assessed against the lessee?
Even the PEZA’s lands and buildings whose beneficial
use have been granted to other persons may not be
taxed with real property taxes. The PEZA may only
lease its lands and buildings to PEZA-registered
economic zone enterprises and entities. These PEZA-
registered enterprises and entities, which operate
within economic zones, are not subject to real property
taxes. Under Section 24 of the Special Economic Zone
Act of 1995, no taxes, whether local or national, shall
be imposed on all business establishments operating
within the economic zones. (City of Lapu-Lapu v.
PEZA, supra)
(b) Charitable institutions, churches, parsonages or
convents appurtenant thereto, mosques, nonprofit or
religious cemeteries and all lands, buildings, and
improvements actually, directly, and exclusively used
for religious, charitable or educational purposes; (Sec.
234, LGC)
BAR Q: A group of Tibetan monks approach A an
offered to lease a building to use it as venue for their
rituals and ceremonies. A, the owner of the building
accepted the rental of 1M for the whole year, the
following year the city assessor issued and
assessment against A for non-payment of real property
tax, is the assessor justified in assessing A’s deficiency
real property taxes?
Suggested Answer: The assessment for real property
tax is not proper. The property is exempt from real
property tax by virtue of the use thereof by the Tibetan
Monks or rituals and ceremonies. A property that is
actually directly and exclusively used for religious
purpose should be exempt from real property tax under
the Constitution and Section 234 (b).
ALJ’s Answer: No, the property is exempt from RPT. A
property that is actually, directly, and exclusively used
for religious purposes is exempt from RPT.
(c) All machineries and equipment that are actually,
directly and exclusively used by local water districts
and government-owned or - controlled corporations
engaged in the supply and distribution of water and/or
generation and transmission of electric power; (Sec.
234, LGC)
If the GOCC is not engaged in this line of business,
applying Section 234, last paragraph, it will be subject
to real property tax.
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In the case of NAPOCOR v. Province of Pangasinan,
NPC is neither the owner nor the possessor or
beneficial user of the subject facilities. Thus, until the
transfer of the project to NPC, it does not have anything
to do with the use and operation of the power plant.
The direct, actual, exclusive, and beneficial owner and
user of the power station, machineries, and equipment
certainly pertains to Mirant. NPC, therefore, has no
legal personality to question on the assessment or
claim for exemption and privileges with regard to the
tax liability attached to the subject properties.
Similarly, having no such legal personality, NPC
cannot claim the exemption under Section 234(e) of
the same Act. While it may be true that ownership of
the machinery and equipment used for pollution control
and environmental protection, is not relevant to the
determination of entitlement to exemption, NPC still
has no basis to assert such privilege. The LBAA did not
err in ruling that it is Mirant, not NPC, which should
claim for such tax exemption, if at all. At any rate, a
claim for exemption under Section 234(e) of R.A. No.
7160, should be supported by evidence that the
property sought to be exempt is actually, directly, and
exclusively used for pollution control and
environmental protection during the period covered by
the assessment. (NAPOCOR v. Province of
Pangasinan, G.R. No. 210191, March 4, 2019)
(d) All real property owned by duly registered
cooperatives as provided for under R. A. No. 6938; and
(Sec. 234, LGC)
The exemption from real property taxes given to
cooperatives applies regardless of whether or not the
land owned is leased. This exemption benefits the
cooperative's lessee.
Respondent is engaged in palm oil plantation.94 Thus,
it harvests fruits from palm trees for oil conversion
through its milling plant. By the nature of respondent's
business, transportation is indispensable for its
operations. The indispensability of the road equipment
and mini haulers in transportation makes it actually,
directly, and exclusively used in the operation of
respondent's business. (Provincial Assessor of Agusan
Del Sur v. Filipinas Palm Oil Plantation, Inc., G.R. No.
183416, October 05, 2016)
(e) Machinery and equipment used for pollution control
and environmental protection. Except as provided
herein, any exemption from payment of real property
tax previously granted to, or presently enjoyed by, all
persons, whether natural or juridical, including all
government-owned or - controlled corporations are
hereby withdrawn upon the effectivity of this Code.
(Sec. 234, LGC)
APPRAISAL AND ASSESSMENT PROCESS
Appraisal
When we say appraisal of the property this is the
process by which the fair market value (FMV) of the
property is determined.
The FMV of the property is based on the zoning
ordinance of the LGU. This is determined by the
assessor and approved by the Sanggunian.
Assessed value
Once you have the FMV of the property, the assessed
value will be next determined and the assessed value
will be computed by multiplying the assessment level
by the FMV.
The assessment value depends on the use of the
property.
SEC. 217. Actual Use of Real
Property as Basis for Assessment. –
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.
From the assessed value you will have to multiply the
tax rate to get your real property tax.
FMV x Assessment Level = Assessed Value
Assessed Value x Tax Rate = Real Property Tax
Basis of Assessment
Under Sec. 215 of the LGC are the classes of real
property for assessment purposes.
SEC. 215. Classes of Real Property
for Assessment Purposes. – For
purposes of assessment, real
property shall be classified as
residential, agricultural,
commercial, industrial, mineral, or
special. The city or municipality
within the Metropolitan Manila Area,
through their respective Sanggunian,
have the power to classify lands as
residential, agricultural, commercial,
industrial, mineral, timberland, or
special in accordance with their
zoning ordinances.
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SEC. 216. Special Classes of Real
Property. – All lands, buildings, and
other improvements actually, directly
and exclusively used for hospitals,
cultural, or scientific purposes, and
those owned and used by local water
districts, and government-owned or -
controlled corporations rendering
essential public services in the supply
and distribution of water and/or
generation and transmission of
electric power shall be classified as
special.
REMEDIES AVAILABLE TO THE GOVERNMENT
For local taxation, the remedy of the LGU may be:
1. Administrative action (through levy on real
property)
2. Judicial action (for collection)
3. Constituting a superior lien on the property
subject to tax
- Binding with or without registration unlike in
national tax where the lien is inferior.
These remedies may proceed simultaneously; they are
not alternative.
Period to collect
The RPT can be collected within 5 years from the date
of the obligation or the due date.
The process s of collection of the real property tax must
completed within the 5 year intended period.
If there is fraud or intent to evade, the prescriptive
period for collection is 10 years from the date of
discovery.
Grounds for suspension of the prescriptive period
The period of prescription within which to collect shall
be suspended for the time during which:
1. The local treasurer is legally prevented from
collecting the tax;
2. The owner of the property or the person having
interest therein requests for a reinvestigation and
executes a waiver in writing before the expiration
of the period within which to collect;
3. The owner of the property or other persons having
legal interest therein is out of the country or
otherwise cannot be located.
REMEDIES AVAILABLE TO THE TAXPAYER
1. Taxpayer may question the act of the local assessor
(Contesting the valuation of real property)
2. Taxpayer may question the act of the local treasurer
(Contesting an assessment / Payment under protest)
3. Repayment of excessive collection (Refund)
Everything starts with declaration by the owner of the
value of the property. If you are the first owner of the
real property, you have to file a declaration of the value
of the property. If the property is transferred to a new
owner, within 60 days from the date of transfer, there
must be a declaration of the value of the property to the
local assessor.
Once it is declared, the assessor will include it in the
assessment roll and will evaluate the classification of
the property.
From the basis of the summary provided by the local
assessor, the local treasurer will compute for the real
property tax.
After computation of the real property tax, the treasurer
will now issue a demand for payment, or an invoice, or
billing against the owner or the declared property
owner of the real property.
CONTESTING THE VALUATION OF THE REAL
PROPERTY (60-120-30-30)
SEC. 223. Notification of New or
Revised Assessment. - When real
property is assessed for the first time
or when an existing assessment is
increased or decreased, the
provincial, city or municipal assessor
shall within thirty (30) days give
written notice of such new or revised
assessment to the person in whose
name the property is declared. The
notice may be delivered personally or
by registered mail or through the
assistance of the punong Barangay to
the last known address of the person
to be served.
Once the assessment process is done, the declared
owner of the property in the tax declaration must be
provided with a notice of assessment from the local
assessor. The notice of assessment contemplated
under Sec. 223 does not pertain yet to the collection or
to the demand for payment of the real property tax. It
only refers to the evaluation or the assessment process
made by the local assessor, so the classification of the
property, and the fair market value of the property.
If the taxpayer is not amenable to the assessment
by local assessor, what would be the remedy?
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Any owner or person having legal interest in the
property who is not satisfied with the action of the local
assessor in the assessment of his property may:
1. Within 60 days from the date of the receipt of the
written notice of assessment, appeal to the Local
Board of Assessment Appeals. (LBAA)
2. The LBAA shall decide the appeal within 120 days
from the date of the receipt of such appeal.
3. In case of unfavorable ruling by the LBAA, appeal
may be made to the Central Board of Assessment
Appeals (CBAA) within 30 days from the date of the
receipt of the decision of the LBAA.
4. The CBAA is not provided with a particular period to
decide on the matter. However, in case of unfavorable
ruling by the CBAA, appeal may be made to the CTA
En Banc within 30 days from the date of the receipt of
the decision of the CBAA.
SEC. 231. Effect of appeal on the
Payment of Real Property Tax. -
appeal on of real property made
under the provisions of this Code
shall, in no case, suspend the
collection of the corresponding realty
taxes on the property involved as
assessed by the provincial or city
assessor, without prejudice to
subsequent adjustment depending
upon the final outcome of the appeal.
CONTESTING AN ASSESSMENT
(30-60-60-120-30-30)
SEC. 252. Payment Under Protest. –
(a) No protest shall be entertained
unless the taxpayer first pays the tax.
There shall be annotated on the tax
receipts the words "paid under
protest". The protest in writing must
be filed within thirty (30) days from
payment of the tax to the provincial,
city treasurer or municipal treasurer,
in the case of a municipality within
Metropolitan Manila Area, who shall
decide the protest within sixty (60)
days from receipt.
(b) The tax or a portion thereof paid
under protest, shall be held in trust by
the treasurer concerned.
(c) In the event that the protest is
finally decided in favor of the
taxpayer, the amount or portion of the
tax protested shall be refunded to the
 protestant, or applied as tax credit
against his existing or future tax
liability.
(d) In the event that the protest is
denied or upon the lapse of the sixty
day period prescribed in
subparagraph (a), the taxpayer may
avail of the remedies as provided for
in Chapter 3, Title II, Book II of this
Code.
It would start with receipt of the notice of assessment
from the local treasurer. As a requirement, this is a
special requirement for real property taxation, before
you can protest against the notice of assessment by
the local treasurer, there must be a payment under
protest.
Procecure
1. Payment under protest must be made and a protest
in writing must be filed to the local treasurer within 30
days from payment of the tax.
2. The local treasurer shall decide the protest in writing
within 60 days from receipt of the said protest.
3. In the event that the protest is denied or from the
lapse of the 60-day period to decide (inaction), appeal
may be made to the LBAA within 60 days from receipt
of the denial of protest.
4. The LBAA shall decide on the appeal within 120
days from receipt of the said appeal.
5. In case of unfavorable ruling by the LBAA, appeal
may be made to the Central Board of Assessment
Appeals (CBAA) within 30 days from the date of the
receipt of the decision of the LBAA.
6. The CBAA is not provided with a particular period to
decide on the matter. However, in case of unfavorable
ruling by the CBAA, appeal may be made to the CTA
En Banc within 30 days from the date of the receipt of
the decision of the CBAA.
Decision of the CBAA
The decision of the CBAA is final and executory. Once
there is already a decision from the CBAA, the LGU
can already initiate the administrative action for levy of
the real property or judicial action for the collection of
sum of money because it is already final and executory.
It will be enjoined only if there would be a case for
injunction to be filed against the enforcement of the
decision of the CBAA.
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If there is no injunction against the enforcement of the
decision of the CBAA, that should be considered final
and executory.
Surety bond as substantial compliance
By posting the surety bond, MERALCO may be
considered to have substantially complied with Section
252 of the Local Government Code for the said bond
already guarantees the payment to the Office of the
City Treasurer of Lucena of the total amount of real
property taxes and penalties due on Tax Declaration
Nos. 019-6500 and 019-7394. This is not the first time
that the Court allowed a surety bond as an alternative
to cash payment of the real property tax before
protest/appeal as required by Section 252 of the Local
Government Code. (MERALCO v. City Assessor and
City Treasurer of Lucena City, G.R. No. 166102,
August 05, 2015)
When can direct judicial action be warranted?
Once an assessment has already been issued by the
assessor, the proper remedy of a taxpayer depends on
whether the assessment was erroneous or illegal.
An erroneous assessment “presupposes that the
taxpayer is subject to the tax but is disputing the
correctness of the amount assessed.” With an
erroneous assessment, the taxpayer claims that the
local assessor erred in determining any of the items for
computing the real property tax, i.e., the value of the
real property or the portion thereof subject to tax and
the proper assessment levels. In case of an erroneous
assessment, the taxpayer must exhaust the
administrative remedies provided under the Local
Government Code before resorting to judicial action.
The taxpayer must first pay the real property tax under
protest. Section 252 of the Local Government Code.
On the other hand, an assessment is illegal if it was
made without authority under the law. In case of an
illegal assessment, the taxpayer may directly resort to
judicial action without paying under protest the
assessed tax and filing an appeal with the Local and
Central Board of Assessment Appeals. (City of Lapu-
Lapu v. PEZA, supra)
Whether payment under protest is required to
assail the assessment for RPT if the taxpayer
claims exemption from RPT
SEC. 206. Proof of Exemption of Real
Property from Taxation. – Every
person by or for whom real property
is declared, who shall claim tax
exemption for such property under
this Title shall file with the provincial,
 city or municipal assessor within thirty
(30) days from the date of the
declaration of real property sufficient
documentary evidence in support of
such claim including corporate
charters, title of ownership, of
incorporation, bylaws, contracts,
affidavits, certifications and mortgage
deeds, and similar documents. If the
required evidence is not submitted
within the period herein prescribed,
the property shall be listed as taxable
in the assessment roll. However, if
the property shall be proven to be tax
exempt, the same shall be dropped
from the assessment roll.
If the required evidence is not submitted within the
period herein prescribed, the property shall be listed as
taxable in the assessment roll. However, if the property
shall be proven to be tax exempt, the same shall be
dropped from the assessment roll.
By providing that real property not declared and proved
as tax-exempt shall be included in the assessment roll,
the above quoted provision implies that the local
assessor has the authority to assess the property for
realty taxes, and any subsequent claim for exemption
shall be allowed only when sufficient proof has been
adduced supporting the claim. Thus, if the property
being taxed has not been dropped from the
assessment roll, taxes must be paid under protest
if the exemption from taxation is insisted upon.
basic real property tax, or any other
tax levied under this Title, is found
111 to be illegal or erroneous and the
tax is accordingly reduced or
adjusted, the taxpayer may file a
written claim for refund or credit for
taxes and interests with the provincial
or city treasurer within two (2) years
from the date the taxpayer is entitled
to such reduction or adjustment.
The provincial or city treasurer shall
decide the claim for tax refund or
credit within sixty (60) days from
receipt thereof. In case the claim for
tax refund or credit is denied, the
taxpayer may avail of the remedies as
provided in Chapter 3, II, Book II of
this Code.
The claim for refund or credit must be brought within
the 2-year prescriptive period but the city treasurer
must decide the claim within 60 days from receipt of
the written claim for refund or credit.

Records are bereft of evidence which proves that,

within 30 days from the filing of its Tax Declaration,
NPC filed with the Municipal Assessor of Itogon,
Benguet an application for exemption or any
documentary evidence of the exempt status of its
properties. (NAPOCOR v. Provincial Treasurer of
Benguet, G.R. No. 209303, November 14, 2016)
Thus, if there is failure to submit documents to support
the claim of exemption, payment under protest is
required.
ALJ: If there is no failure to submit the said documents
but the property is still considered as taxable, payment
under protest is no longer required. It is the choice of
taxpayer to either:
1. Appeal to the LBAA; or
2. Proceed with direct judicial action.

REFUND OR REPAYMENT OF EXCESSIVE RPT

SEC. 253. Repayment of Excessive

Collections. - When an assessment of

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