Taxation Law II

Atty. Loverhette Jeffrey P. Villaordon

REAL PROPERTY TAXATION
Assessment of Real Property
 Definition of Assessment

Assessment – is the act or process of

determining the value of a property
or proportion thereof subject to tax,
including the discovery, listing,
classification and appraisal of
properties.
 Definition of Assessment Level
Assessment Level – is the percentage
applied to the FMV of the real
property to determine the taxable
value of the property.
 Definition of Assessed Value
It is the FMV of the real property
multiplied by the assessment level. It
is synonymous with taxable value.
 Procedure in computing
Real Property Tax
1. Ascertain the assessment level of the
property
2. Multiply the market value by the applicable
assessment level of the property.
3. Find the tax rate which corresponds to the
class (use) of the property and multiply the
assessed value by the applicable tax rates.
Market Value x Assessment level (%)
= Assessed Value

Assessed Value x Tax Rate (%)

= Real Property Tax Payable
 Instances when there can be a
condonation or reduction of RPT
• General Failure of crops
• Substantial decrease in the price of agricultural or
agri-based products
• Calamity
• When public interest so requires
Nota bene = 1 – 3, condonation is done by the
sanggunian concerned by ordinance and upon
recommendation of the Local Disaster
Coordinating Council. In the case of 4, only the
president may exercise this power.
 Who may contest assessment of real
property
In order for a taxpayer to have legal standing to
contest an assessment to the Local Board of
Assessment Appeals (LBAA), he must be a
person having legal interest in the property.
 Process in contesting RPT Assessment
1. Pay the tax under protest and annotation of “paid under
protest” in receipt.
2. File written protest with local treasurer within 30 days from
payment of the tax.
3. Treasurer to decide within 60 days from receipt of the protest.
4. From treasurers decision or inaction, appeal to the LBAA
within 60 days
5. LBAA to decide within 120 days
6. Appeal LBAA decision to CBAA within 30 days from receipt of
adverse decision
7. CBAA appealable to CTA en banc within 30 days from receipt
of the adverse decision of the CBAA
8. Appeal to SC within 15 days from receipt of adverse decision
of CTA
 Is payment a pre-requisite to protest
an assessment of RPT?
YES. Section 252 of the LGC provides that no
protest shall be entertained unless the
taxpayer first pays the tax.

Exception: when the taxpayer is questioning the

very authority and power of the assessor to
impose the assessment and of the treasurer to
collect the tax as opposed to questioning the
increase/decrease in the tax to be paid.
PRESCRIPTIVE PERIODS
 Date of Effectivity of Assessment and
Reassessment
Section 221 of LGC – all assessments or reassessments
made after the first day of January of any year shall
take effect on the first day of January of the
succeeding year, Provided, however, that the
reassessment of real property due to its partial or total
destruction or to a major change in its actual use, or to
any great and sudden inflation or deflation of real
property values, or to the gross illegality of the
assessment when made or to any other abnormal
cause, shall be made within ninety days from the date
of any such cause or causes occurred, and shall take
effect at the beginning of the quarter next following
the assessment.
 Rule on assessment of RPT
General Rule: the assessment must be made
within 5 years from the date they become
due.

Exception: if there is fraud or intent to evade

taxes, assessment may be made within 10
years from discovery of fraud ort intent to
evade.
 Instances when the running of the
prescriptive period be suspended
• Treasurer is legally prevented from
assessing/collecting
• Taxpayer requests for reinvestigation and
executes waiver
• Taxpayer is out of the country or cannot be
located.
 Simplified
Assessment Collection
Ordinary 5 years 5 years

Fraudulent 10 years 5 years