COA: Makati real property market values outdated

COA says Makati is due for an upgrade. —INQUIRER PHOTO

Is a hike in real property taxes in Makati City in the offing?

The Commission on Audit (COA) has urged Makati Mayor Abigail Binay to take steps to update the city’s outdated real property valuations for taxation purposes.

In its recently released 2016 annual audit report, COA said the city’s schedule of fair market value (SFMV) had not been updated since 1997.

Thus, it “does not represent an appropriate and realistic basis for real property taxation” as mandated by the Local Government Code (LGC).

State auditors said this deprived the city government of the opportunity to collect higher real property taxes to fund its programs and services.

“Considering that the market values currently being used are those prevailing 19 years ago, the same are deemed inappropriate and unrealistic basis for real property taxation,” read the COA report.

It recommended that the city assessor be required to prepare an updated SFMV to serve as a basis for the general revision of real property assessments.

It also pushed for the drafting of an appropriate ordinance for the Makati City council’s consideration.

The report took note of Binay’s response that the city assessor had been directed to consult stakeholders and other government agencies for an in-depth study on fair market values.

To avoid undue burden to taxpayers, Binay requested the city assessor to coordinate with the four local treasury and assessment districts to establish an “effective fiscal management and progressive revenue raising program.”

The city government also told COA it would wait for the Bureau of Internal Revenue’s zonal valuation so that it could be considered in updating the SFMV.

Under Sections 198 (a) and 201 of the LGC, all real property, whether taxable or tax-exempt, are appraised at their current and fair market values.