Authority on real property tax

(First of two parts)

IN Sta. Lucia Realty and Development Corporation vs. City of Pasig, GR 166838, June 15, 2011, the Supreme Court ruled on the authority of the Local Government on the imposition of the real property tax.

Under Presidential Decree No. 464 or the “Real Property Tax Code,” the authority to collect real property taxes is vested in the locality where the property is situated:

“Sec. 5. Appraisal of Real Property — All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated.

Sec. 57. Collection of tax to be the responsibility of treasurers. — The collection of the real property tax and all penalties accruing thereto, and the enforcement of the remedies provided for in this Code or any applicable laws, shall be the responsibility of the treasurer of the province, city or municipality where the property is situated.”

This requisite was reiterated in Republic Act No. 7160, also known as the 1991 the Local Government Code, to wit:

Section 201. Appraisal of Real Property – All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code.

Section 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: x x x.

The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction, it is imperative to first show that these properties are unquestionably within its geographical boundaries. (To be continued)

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