ENACTING A REAL PROPERTY TAX CODE

• Number: Presidential Decree No. 464
• Sections: 105

Preamble

WHEREAS, this country cannot progress steadily if its local

governments are not potent political subdivisions contributing their

proportionate shares to national progress;

WHEREAS, the past decade saw the passage of the Local

Autonomy Act, the Barrio Charter, the Decentralization Act and other

pieces of legislation intended to make local governments financially

self-reliant and stable;

WHEREAS, it is very apparent that in spite of all these

laws, local governments still find difficulty in providing adequate

funds with which to underwrite basic and essential public services

within their respective areas of responsibility;

WHEREAS, studies show that one of the main reasons behind

this is the failure of local governments to fully tap the income

potentialities of the real property tax;

WHEREAS, to remedy the situation, there is an urgent and

compelling need to upgrade assessment services by updating assessment

techniques, procedures and practices and thereby bring about equitable

distribution of the realty tax burden among real property owners

throughout the country;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution do

hereby adopt, promulgate and decree, as it is hereby adopted,

promulgated and decreed, as part of the law of the land, this decree

entitled "The Real Property Tax Code", the context of which follows:

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.

Provisions

Section 1 Scope.

SECTION 1. Scope.—This Code shall govern the

appraisal and assessment of real property for purposes of taxation by

provinces, cities and municipalities, as well as the levy, collection

and administration of the real property tax.

Section 2 Fundamental Principles.

SEC. 2. Fundamental Principles.—The appraisal and

assessment of real property for taxation purposes shall be guided by the

following fundamental principles:

Real property shall be appraised at its current and fair

market value;

The appraisal of real property shall be uniform in each local

political subdivision;

Real property shall be classified for assessment purposes on

the basis of its actual use;

Real property shall be essessed on the basis of a uniform

standard of value within each local political subdivision;

In no case shall the appraisal and assessment of real property

for taxation purposes and the collection of the real property tax be let

to any private person; and

The goal of real property assessment shall be the equitable

distribution of the tax burden.

Section 3 Definition of Terms.

SEC. 3. Definition of Terms.—When used in this Code.

Actual use—shall refer to the purpose for which the

property is principally or predominantly utilized by the person in

possession of the property.

Ad Valorem tax—is a levy on real property determined on

the basis of a fixed proportion of the value of the property.

Agricultural land—land devoted principally to the raising

of crops such as rice, corn, sugar cane, tobacco, coconut, etc., or to

pasturing, dairying, inland fishery, salt-making, and other agricultural

uses, including timberlands and forest lands.

Appraisal—is the act or process of determining the value of

a property as of a specific date for a specific purpose.

Assessment—the act or process of determining the value of a

property, or proportion thereof, subject to tax, including the

discovery, listing and appraisal of properties.

Assessment level—is the percentage applied to the market

value to determine the taxable or assessed value of the property.

Assessed Value—the value placed on taxable property by the

assessor for ad valorem tax purposes. The assessed value when

multiplied by the tax rate will produce the amount of tax due. It is

synonymous to "taxable value."

Commercial land—land devoted principally to commercial

purposes, and generally for the object of profit.

Depreciated value—the value remaining after deducting

depreciation from either the replacement cost or the reproduction cost.

Economic life—the estimated period over which it is

anticipated that a machinery may profitably be utilized.

Improvements—is a valuable addition made to property or an

amelioration in its condition, amounting to more than mere repairs or

replacement of waste, costing labor or capital, and intended to enhance

its value, beauty or utility or to adapt it for new or further purposes.

Industrial land—land devoted principally to industry as

capital investment.

Machinery—shall embrace machines, mechanical contrivances,

instruments, appliances and apparatus attached to the real estate. It

includes the physical facilities available for production, as well as

the installations and appurtenant service facilities, together with all

other equipment designed for or essential to its manufacturing,

industrial or agricultural purposes.

Market value—is defined as "the highest price estimated in

terms of money which the property will buy if exposed for sale in the

open market allowing a reasonable time to find a purchaser who buys with

knowledge of all the uses to which it is adapted and for which it is

capable of being used." It is also referred to as "the price at which a

willing seller would sell and a willing buyer would buy, neither being

under abnormal pressure."

Mineral lands—are those lands in which minerals exist in

sufficient quantity or grade to justify the necessary expenditures to be

incurred in extracting and utilizing such minerals.

Original cost—for newly acquired machinery not yet

depreciated and appraised within the year of its purchase, refers to the

actual cost of the machinery to its present owner (plus the cost of

transportation, handling and installation at the present site).

Reassessment—the assigning of new assesed values to

property, particularly real estate, as the result of a general, partial

or individual reappraisal of the property.

Remaining economic life—the period of time (years) from

the date of appraisal to the date when the machinery becomes valueless.

Remaining value—the value corresponding to the remaining

useful life of the machinery.

Replacement or reproduction cost (new)—the cost that would

be incurred on the basis of current prices, in acquiring an equally

desirable substitute property, or the cost of reproducing a new replica

property on the basis of current prices with the same or closely similar

material.

Residential land—land principally devoted to habitation.

Section 4 Administration of the Real Property Tax.

SEC. 4. Administration of the Real Property Tax.—The

Department of Finance shall be primarily responsible for the proper,

efficient and effective administration of the real property tax and for

this purpose it shall:

Evolve a comprehensive system of real property appraisal that

will ensure fair and realistic property valuations for taxation

purposes;

Establish uniform assessment methods and procedures that will

equalize property values in each local political subdivision;

Ensure that the ad valorem tax on real property shall be

just uniform and equitable;

Adopt the necessary measures that will promote maximum tax

collection efficiency at the local level;

Provide for the optimum utilization by the local governments of

the proceeds from the real property tax; and

Formulate and adopt policies and procedures that will improve

technical skills and develop reasonable standards of performance in the

local assessment and treasury services.

In order to attain the foregoing objectives, the Secretary of

Finance shall exercise direct executive supervision over all assessment

and treasury officials and personnel in the local governments.

Section 6 Declaration of Real Property by Owner or Administrator.

SEC. 6. Declaration of Real Property by Owner or

Administrator.—It shall be the duty of all persons, natural or

juridical, owning or administering real property, including the

improvements therein, within a city or municipality, or their duly

authorized representative, to prepare, or cause to be prepared, and file

with the provincial or city assessor, a sworn statement declaring the

true value of their property, whether previously declared or undeclared,

taxable or exempt, which shall be the current and fair market value of

the property, as determined by the declarant. Such declaration shall

contain a description of the property sufficient in detail to enable the

assessor or his deputy to identify the same for assessment purposes.

The sworn declaration of real property herein referred to shall

be filed with the assessor concerned once every five years during the

period from January first to June thirtieth, commencing with the

calendar year 1977, unless required earlier by the Secretary of Finance.

Section 7 Declaration of Real Property by the Assessor.

SEC. 7. Declaration of Real Property by the Assessor.—

When any person, natural or juridical, by whom real property is required

to be declared under Section six hereof refuses or fails for any reason

to make such declaration within the time prescribed, the provincial or

city assessor shall himself declare the property in the name of the

defaulting owner, if known or against an unknown owner, as the case may

be, and shall assess the property for taxation in accordance with the

provisions of this Code. No oath shall be required of a declaration thus

made by the provincial or city assessor.

Section 8 Listing of Real Property in the Assessment Rolls.

SEC. 8. Listing of Real Property in the Assessment

Rolls.—In every province and city, there shall be prepared and

maintained by the provincial or city assessor an assessment roil wherein

shall be listed all real property, whether taxable or exempt, located

within the province or city. Real property shall be listed and valued in

the name of the owner or administrator, or anyone having legal interest

in the property.

The undivided real property of a deceased person may be listed

and valued in the name of the estate, or of the heirs and devisee

without designating them individually; an undivided real property other

than that owned by a deceased may be listed and valued in the name of

one or more co-owners: Provided, however, That such heir,

devisee or co-owner shall be liable severally for all obligations

imposed by this Code and for the payment of the real property tax with

respect to the undivided property.

The real property of a

corporation, partnership, or association shall be entered and assessed

in the same manner as that of an individual.

Real property owned

by the Republic of the Philippines, its political subdivisions and any

government-owned corporation so exempt by its charter, the beneficial

use of which has been granted, for consideration or otherwise, to a

taxable person, shall be listed for purposes of taxation in the name of

the grantee, or of the public entity if such property has been acquired

for resale or lease.

The assessment roll shall be prepared

in accordance with rules and regulations prescribed by the Secretary of

Finance.

Section 9 Proof of Exemption, of Real Property from Taxation.

SEC. 9. 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

Code shall file with the provincial or city assessor within thirty clays

from the date of the declaration of real property sufficient

documentary evidence in support of such claim, including corporate

charters, titles or ownership, articles of incorporation, by-laws,

contracts, affidavits and 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 it shall be proven to be tax exempt the

same shall be dropped from the roll of taxable properties.

SEC.

10. Real Property Identification System.—All declarations of

real property made under the provisions of this Code shall be kept and

filed under a uniform identification system to be established by the

provincial or city assessors in accordance with the rules and

regulations to be prescribed by the Secretary of Finance.

SEC.

11. Notification of Transfer of Real Property Ownership.—Any

person who shall transfer real property ownership to another shall

notify the assessor of the province or city wherein the property is

situated within sixty days from the date of such transfer. The

notification shall include the particulars of the transfer, the

description of the property alienated, and the name and address

of the transferee.

Section 12 Duty of Register of Deeds to Apprise Assessor of Real Property Listed in Registry.

SEC. 12. Duty of Register of Deeds

to Apprise Assessor of Real Property Listed in Registry.—To

ascertain whether or not any real property entered in the Registry of

Property has escaped discovery and listing for the purpose of taxation,

the Register of Deeds, shall prepare and submit to the provincial or

city assessor, within two years from the date of approval of this Code

an abstract of his registry, which shall include brief but sufficient

description of the real properties entered therein, their present owners

and the dates of their most recent transfer or alienations accompanied

by copies of corresponding deeds of sale, donation or partition or other

form of alienation.

It shall also be the duty of the Register of

Deeds to require every person who shall present for registration a

document of transfer, alienation or encumbrance of real property to

accompany the same with a certificate to the effect that the real

property subject of the transfer, alienation or encumbrance, as the case

may be, has been fully paid of all real property taxes due thereon.

Failure to provide such certificate shall be a valid cause for the

Register of Deeds to refuse the registration of the document.

SEC.

13. Duty of Official Issuing Building Permit or Certificates of

Registration of Machinery to Transmit Copy to Assessor.—Any public

official or employee who may now or hereafter be required by law or

regulation to issue to any person a permit for the construction,

addition, repair or renovation of a building or permanent improvement,

on land, or a certificate or registration for any machinery, including

machines, mechanical contrivances, and apparatus, attached or affixed on

land, or to another real property shall transmit a copy of such permit

or certificate, within thirty days of its issuance, to the assessor of

the province or city wherein the property is situated.

Section 14 Duty of Surveyors to Furnish Copy of Plans to Assessors.

SEC. 14. Duty of Surveyors to Furnish Copy of Plans to

Assessors.—It shall be the duty of all surveyors, public or private,

to furnish free of charge to the assessor of the province or city where

the land is located with a white or blue print copy of each of all

approved original or subdivision plans or maps of surveys executed by

them within thirty days from receipt of such plans from the Bureau of

Land or Land Registration Commission or the National Urban Planning

Commission, as the case may be.

Section 15 Preparation of Schedule of Values.

SEC. 15. Preparation of Schedule of Values.—Before

any general revision of property assessments is made, as provided in

this Code, there shall be prepared for the province or city a Schedule

of Market Values for the different classes of real property therein

situated in such form and detail as shall be prescribed by the Secretary

of Finance.

Said schedule, together with an abstract of the data on which it

is based, shall be submitted to the Secretary of Finance for review not

later than the thirty-first day of December immediately preceding the

calendar year the general revision of assessments shall be undertaken.

The Secretary of Finance shall have ninety days from the date or receipt

within which to review said schedule to determine whether it conforms

with the provisions of this Code.

Section 16 Authority of Assessor to Take Evidence.

SEC. 16. Authority of

Assessor to Take Evidence.—For the purpose of obtaining information

on which to base the market value of any real property, the provincial

or city assessor, or his deputy, may summon witnesses, administer oaths

and take deposition, concerning the property, its ownership, amount,

nature and value.

Section 17 Amendment of Schedule of Market Values.

SEC. 17. Amendment of Schedule of Market Values.—

For the correction of errors or inequalities in any schedule of market

values, the provincial or city assessor shall, on his own initiative or

upon the direction of the Secretary of Finance, prepare an amendment

designed to remedy such errors or inequalities. Such amendments shall

likewise be subject to review by the Secretary of Finance within ninety

days1 from the date of receipt thereof.

Section 18 Classes of Real Property for Assessment Purposes.

SEC. 18. Classes of Real

Property for Assessment Purposes.—For purposes of assessment, real

property shall be classified as residential, agricultural, commercial or

industrial and also as mineral in the case of lands.

Mineral

lands shall be further classified as follows:

Metallic mineral lands, which shall include:

Patented lode mining claims, producing or non-producing;

Unpatented producing lode mining claims which may be

patented;

Unpatented non-producing lode mining claims

which may be patented;

Patented placer mining claims, producing or

non-producing;

Unpatented producing placer mining claims which may be

patented; and

Unpatented non-producing placer mining claims which may

be patented.

Non-metallic mineral lands, which shall include:

Patented, producing or non-producing;

Unpatented, producing which may be patented; and

Unpatented, non-producing, which may be patented.

Definition of terms.—"Patented" mineral lands are those lands

covered by a duly issued mineral patent signed by the President of the

Philippines.

"Unpatented" mineral lands are those lands which

were located as mining claims under the provisions of the Philippine

Bill of 1902 but are not yet covered by a mineral patent.

"Producing patented mineral claims" are those claims producing minerals

for commercial purposes.

"Non-producing patented mineral claims"

are those claims which are only in the stage of exploration and

development and has not produced minerals for commercial production.

A "lode mineral claim" is a parcel of mineral lands containing a vein,

lode, ledge, lens, or mass of ore in place which has been located in

accordance with law.

A "placer claim" is that which does not come

under the definition of "lode mineral claim."

"Placer deposits"

are in loose, fragmentary or broken rocks, boulders, floats, beds or

deposits.

"Metallic" deposits are those which contain any of the

metallic elements or minerals, or their combinations, such as gold,

silver, platinum, tin, chromium, iron manganese, copper, nickel, lead,

zinc cinnabar, tungsten and the like.

"Non-metallic" deposits are

all other deposits not covered by the above metallic deposits.

In case of conflict between the above definitions and those appearing in

the Mining Act as amended, the latter shall prevail.

Special

Classes of Real Property—

All lands, buildings and other

improvements thereon, actually, directly and exclusively used for

educational, cultural, recreational or scientific purposes, as well as

hospitals not owned and operated by the government or by any of its

instrumentalities, shall be classified as special.

Section 19

SEC. 19.

Actual Use of Real Property as Basis for Assessment.—Real

property shall be assessed on the basis of its actual use regardless of

where located and whoever uses it.

The Secretary of Finance shall

issue guidelines for the proper implementation of the provisions of

this Section.

Section 20 Assessment Levels.

SEC. 20. Assessment Levels.—The

assessment levels to be applied to the current market values of real

property for taxation purposes shall be as follows:

On Lands—The assessment levels in the province or city

shall be maintained at the current levels of thirty per cent for

residential lands; forty per cent for agricultural lands; and fifty per

cent for commercial or industrial lands.

Mineral lands—For purposes of taxation, mineral lands not

covered by lease shall be appraised at fifty per cent of their

market value to be determined by the Secretary of Finance, upon

consultation with the Director of Mines: Provided, however,

That mineral lands covered by leases shall be declared for taxation

purposes either by the owner of the land or lessee and the assessment

level thereof shall be maintained at the current level of fifty per

cent.

On Buildings, Machineries and other improvements.— The

assessment levels now prevailing in the province or city shall be

maintained but which shall in no case be lower than the

assessment levels for lands hereinabove prescribed nor more than

eighty per cent of the market value, except buildings used

exclusively for residential purposes, the assessment levels for

which shall be as follows:

Assessment Value

Market Value

15%

More

than

P30,000.00

but

less

than

or less

20%

"

"

30,000.00

"

"

"

P50,000.00

25%

"

"

50,000.00

"

"

"

75,000.00

35%

"

"

75,000.00

"

"

"

100,000.00

45%

"

"

100,000.00

"

"

"

150,000.00

55%

"

"

150,000.00

"

"

"

250,000.00

65%

"

"

250,000.00

"

"

"

350,000.00

75%

"

"

350,000.00

"

"

"

500,000.00

80%

"

"

500,000.00

"

"

"

Special Classes—The assessment level for all lands,

buildings and other improvements thereon, actually, directly and

exclusively used for educational, cultural or scientific purposes, as

well as hospitals not owned and operated by the government or by any of

its instrumentalities shall be fifteen per cent of the market value of

such property and for those exclusively used for recreational purposes,

thirty per cent of their market value.

For the first general revision of assessments to be undertaken after

the approval of this Code and every five years thereafter, the

assessment levels hereinabove prescribed for the different classes of

real property may be increased at rates to be fixed by the Secretary of

Finance but in no case shall such increase in rates exceed ten per cent

of the assessment levels herein prescribed for each class of real

property.

Section 21 General Revision of Assessments.

SEC. 21. General Revision of Assessments.—Beginning

with the calendar year 1978, the provincial or city assessor shall make

a general revision of real property assessments in the province or city

to take effect January 1, 1979 and once every five years thereafter: Provided,

however. That if property values in a province or city, or in any

municipality, have greatly changed since the last general revision, the

provincial or city assessor may, with the approval of the Secretary of

Finance or upon his direction, undertake a general revision of

assessments in the province or city, or in any municipality before the

fifth year from the effectivity of the last general revision.

Section 22 Valuation of Real Property.

SEC. 22. Valuation of Real Property.—Upon the

discovery of real property or during the general revision of property

assessments as provided in Section twenty-one of this Code or at any

time when requested by the person in whose name the property is

declared, the provincial or city assessor or his authorized deputy shall

make an appraisal and assessment in accordance with Section five hereof

of the real property listed and described in the declaration

irrespective of any previous assessment or taxpayer's valuation thereon:

Provided, however, That the assessment of real property shall

not be increased oftener than once every five years in the absence of

new improvements increasing the value of said property or of any change

in its use, except as otherwise provided in this Code.

Section 23 Certification of Revised Values to the Secretary of Finance.

SEC. 23. Certification of Revised Values to the

Secretary of Finance.—When the provincial or city assessor shall

have finished a general revision of property assessments for any

province, municipality or city, he shall so certify to the Secretary of

Finance and the assessments shall become effective and taxes shall

accrue and be payable thereunder in accordance with the provisions of

this Code.

Section 24 Date of Effectivity of Assessment of Reassessment.

SEC. 24. Date of Effectivity of Assessment of

Reassessment.—All assessment 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

assessments when made or to any other abnormal cause, shall be made

within ninety days from the date any such cause or causes occurred, the

same to take effect at the beginning of the quarter next following the

reassessment.

Section 25 Assessment of Property Subject to Back Taxes.

SEC. 25. Assessment of Property Subject to Back Taxes.

—Real property declared for the first time shall have back taxes

assessed against it for the period during which it would have been

liable if assessed from the first in proper course but in no case for

more than ten years prior to the year of initial assessment; Provided,

however, That the back taxes shall be computed on the basis of the

applicable schedule of values in force during the corresponding period.

If said taxes are paid before the expiration of the tax

collection period next ensuing, no penalty for delinquency shall be

imposed, otherwise the taxes shall be subject to all the penalties to

which they would have been liable had they originally become deliquent

after assessment of the property in the usual course.

Section 26

SEC. 26.

Binding effect of Assessment or Reassessment. —All assessments

and reassessments made under the provisions of this Code shall be valid

and binding on all persons having legal interest on the property.

Section 27 Notification of New or Revised Assessments.

SEC. 27. Notification of New or Revised Assessments.—

When real property is assessed for the first time or when an existing

assessment is increased or decreased, the provincial or city shall

within thirty 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 to such person or to the occupant in possession,

if any, or by mail to the last known address of the person to be served,

or through the assistance of the barrio captain.

Section 28 Appraising Machinery.

SEC. 28. Appraising Machinery.—The current market

value of machinery shall be determined on the basis of the basis of the

original cost in the case of newly acquired machinery not yet

depreciated and is appraised within the year of its purchase. In the

case of all others, the current market value shall be determined by

dividing the remaining economic life of the machinery by its economic

life and multiplied by the replacement or reproduction cost

(new) of said machinery.

If the machinery is imported, replacement or reproduction

cost (new) shall be the original acquisition cost which would

normally include such costs as freight and insurance charges, brokerage,

arrastre and handling, customs duties and taxes plus cost of inland

transportation and handling, and significant installation charges at the

present site. The cost in foreign currency of imported machinery shall

be converted to peso cost on the basis of foreign currency exchange

rates as fixed by the Central Bank of the Philippines.

Section 29 Depreciation Allowance for Machinery.

SEC. 29. Depreciation Allowance for Machinery.—For

purposes of assessment, a depreciation allowance shall be made for

machinery at a rate not exceeding ten per cent of its original cost or

its replacement or reproduction cost (new), as the case may be, for each

year of use: Provided, That the remaining value for all kinds

of machinery shall be fixed at not less than twenty per cent of such

original or replacement cost for so long as the machinery is useful and

in operation.

Section 30 Local Board of Assessment Appeals.

SEC. 30. Local Board of Assessment Appeals.—Any owner

who is not satisfied with the action of the provincial or city assessor

in the assessment of his property may, within sixty days from the date

of receipt by him of the written notice of assessment as provided in

this Code, appeal to the Board of Assessment Appeals of the province or

city, by filing with it a petition under oath using the form prescribed

for the purpose, together with copies of the tax declarations and such

affidavit or documents submitted in support of the appeal.

Section 31 Organization, Powers and Functions of the Local Board of Assessment Appeals.

SEC. 31. Organization, Powers and Functions of the Local

Board of Assessment Appeals.—The Local Board of Assessment Appeals

shall be composed of three members: the Register of Deeds, as Chairman,

the Provincial or City Auditor and the Provincial or City Engineer, as

Members, who shall serve as such in an ex-officio capacity without

additional compensation. In provinces or cities without Provincial or

City Engineers, the Highway District Engineer shall serve as member of

the Board, likewise in an ex-officio capacity without additional

compensation. In the absence of a regular appointee, the officer

performing the duties of the Register of Deeds, or the Provincial or

City Auditor, or the Provincial, City or Highway District Engineer

whether in an acting capacity or as a duly-designated officer-in-charge

shall automatically become the Chairman or member of the said Board, as

the case may be.

The Chairman of the Board shall have the power to designate any

government employee of the province or city to serve as Secretary of the

Board also without additional compensation.

The Chairman and

members of the Local Board shall enter into the duties of their

respective positions without need of further appointment or special

designation immediately upon approval of this Code. The members of the

Board shall each take the following oath, copy of which shall be

furnished the Secretary of Finance:

"I ______________________________, having been appointed to the

position of ______________________________, hereby solemnly swear that I

will well and faithfully discharge to the best of my ability and duties

of my present position and of all others I may hereafter hold under the

Republic of the Philippines, and that I will support and defend the

Constitution of the Philippines; and that I will obey the laws, legal

orders, and decrees promulgated by the duly constituted authorities of

the Republic of the Philippines; and that I will well and truly hear and

determine all matters and issues between taxpayers and the provincial

or city assessor submitted for any decision, and that impose this

obligation upon myself voluntarily without mental reservation or purpose

of evasion.

So help me God.

______________________________

Signature

Subscribed and Sworn to before me this ________ day of

____________________ A.D. at ______________________Philippines.

_____________________________________

Signature of Officer

Administering Oath

Section 32 Meetings.

SEC. 32. Meetings.—The Local Board shall hold sessions

at least once a month, and as often as may be necessary for the prompt

disposition of the appealed cases pending before it. No member of the

Board shall be entitled to per-diems or traveling expenses for his

attendance in Board sessions, except when conducting an ocular

inspection in connection with a case under appeal.

Section 33 Expenses of the Board.

SEC. 33. Expenses of the Board.—All expenses of the

Local Board of Assessment Appeals shall be charged against the general

fund of the province or city, as the case may be. Local boards and

councils shall appropriate the necessary funds to enable the Board of

Assessment Appeals in their respective localities to operate

effectively.

Section 34

SEC. 34. Action by the Local Board of Assessment Appeals.-The

Local Board of Assessment Appeals shall decide the appeal within one

hundred and twenty days from the date of receipt of such appeal. The

decision rendered must be based on substantial evidence presented at the

hearing or at least contained in the record and disclosed to the

parties or such relevant evidence as a reasonable mind might accept as

adequate to support the conclusion.

In the exercise of its appellate jurisdiction, the Board shall have

the power to summon witnesses, administer oaths, conduct ocular

inspection, take depositions, and issue subpoena and subpoena

duces tecum. The proceedings of the Board shall be conducted

solely for the purpose of ascertaining the truth without necessarily

adhering to technical rules applicable in judicial proceedings.

The Secretary of the Board shall furnish the property owner and

the Provincial or City Assessor with a copy each of the decision of the

Board. In case the provincial or city assessor concurs in the revision

of the assessment, it shall be his duty to notify the property owner of

such fact using the form prescribed for the purpose. The owner or

administrator of the property or the assessor who is not satisfied with

the decision of the Board of Assessment Appeals, may, within thirty days

after receipt of the decision of the local Board, appeal to the Central

Board of Assessment Appeals by filing his appeal under oath with the

Secretary of the proper provincial or city Board of Assessment Appeals

using the prescribed form stating therein the grounds and the reasons

for the appeal, and attaching thereto any evidence pertinent to the

case. A copy of the appeal should be also furnished the Central Board of

Assessment Appeals, through its Chairman, by the appellant.

Within ten (10) days from receipt of the appeal, the Secretary of the

Board of Assessment Appeals concerned shall forward the same and all

papers related thereto, to the Central Board of Assessment Appeals

through the Chairman thereof.

Section 35 Central Board of Assessment Appeals, its Organization.

SEC. 35. Central Board of

Assessment Appeals, its Organization.—The Central Board of

Assessment Appeals shall be composed of the Secretary of Finance, as

Chairman, the Secretary of Justice and the Secretary of Local Government

and Community Development, as Members, who shall serve without

additional compensation.

The Central Board of Assessment Appeals

shall be assisted by a Board of Hearing Commissioners and a staff, which

shall be initially composed of the following positions with

compensation at the minimum rates indicated hereunder:

Position

Annual Salary

1.

One Central Board Chief Hearing Commissioner

P17,400.00

2.

Four Central Board Hearing Commissioners.

16,200.00

each

3.

One Central Board Secretary

9,600.00

4.

Four Central Board Stenographers

6,600.00

each

5.

Three Central Board Docket and Filing Clerks

4,800.00

each

The annual appropriations for the salaries of the above-mentioned

positions and for such other positions as the Central Board may deem

necessary to create hereafter, as well as sufficient appropriations for

other operational requirements of the Board of Hearing Commissioners

shall its staff, shall henceforth be included in the annual budgets of

the Department of Finance in the corresponding General Appropriations

Decree or laws.

Any provision of law to the contrary notwithstanding, appointment to

the positions of Central Board Chief Hearing Commissioner, Central

Board Hearing Commissioners and Central Board Secretary shall be exempt

from the requirements and restrictions of the Civil Service Law, rules

and regulations as well as those pertaining to position-item

classifications and salary standardization. Any government retiree may

be appointed to the Board of Hearing Commissioners and upon his

appointment, he shall not be required to reimburse or refund any

gratuity received from the government nor shall any pension or annuity

to which he is entitled be suspended or reduced on account of his

employment. A member of the Board of Hearing Commissioners shall serve

until he reaches the age of seventy unless he chooses to retire from the

service or sooner removed for cause, as provided by law. The members of

the Board of Hearing Commissioners shall be members of the bar, civil

or mechanical engineers, or certified public accountants with at least

five years supervisory and/or field experience in real property

assessment work.

The Secretary of Finance, as Chairman of the

Central Board of Assessment Appeals, shall appoint the members of the

Board of Hearing Commissioners and its staff.

The initial sum of

one hundred twenty-five thousand pesos is hereby appropriated from the

General Fund in the National Treasury, not otherwise appropriated, to

finance the operations of the Central Board of Assessment Appeals. For

every fiscal year thereafter, such sums as may be necessary for the

operations of the said Board shall be included in the appropriations of

the Department of Finance in the corresponding General Appropriations

Decree or laws.

The Chairman and Members of the Central Board

shall enter into the duties of their respective positions, without need

of further appointment or special designation, immediately upon approval

of this Code.

Section 36 Scope of Powers and Functions.

SEC. 36. Scope of Powers and Functions.—The

Central Board of Assessment Appeals shall have jurisdiction over

appealed assessment cases decided by the Local Board of Assessment

Appeals. The said Board shall decide cases brought on appeal within

twelve (12) months from the date of receipt, which decision shall become

final and executory after the lapse of fifteen (15) days from the date

of receipt of a copy of the decision by the appellant.

In the

exercise of its appellate jurisdiction, the Central Board of Assessment

Appeals, or upon express authority, the Hearing Commissioners, shall

have the power to summon witnessess, administer oaths, take depositions,

and issue subpoenas and subpoenas duces tecum.

The Central Board of Assessment Appeals shall adopt and

promulgate rules of procedure relative to the conduct of its business.

Section 37 Effect of Appeals on the Payment of the Real Property Tax.

SEC. 37. Effect of Appeals on the Payment of the Real

Property Tax.—Appeals on assessments 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.

Section 38 Incidence of Real Property Tax.

SEC. 38. Incidence of Real Property Tax.—There shall be

levied, assessed and collected in all provinces, cities and

municipalities an annual ad valorem tax on real property, such

as land, buildings, machinery and other improvements affixed or attached

to real property not hereinafter specifically exempted.

Section 39 Rates of Levy.

SEC. 39. Rates of Levy.—The provincial,

city or municipal board or council shall fix a uniform rate of real

property tax applicable to their respective localities as follows:

In the case of a province, the tax shall be fixed by ordinance

of the provincial board at the rate of not less than one fourth of one

percent but not more than one-half of one percent of the assessed

value of real property;

In the case of a city, the tax shall be fixed by ordinance of

the municipal board or city council at the rate of not less than

one-half of one percent but not more than two percent of the assessed

value of real property.

The ordinance fixing the rate of real property tax shall be enacted

by the local board or council not later than the fifteenth day of

September of the year next preceding the year the tax shall begin to

accrue. Within five days after enactment, the board or council secretary

shall forward the ordinance to the local chief executive for his

approval and signature. If he considers any such ordinance prejudicial

to the public welfare, he may veto it by signifying to the local board

or council concerned his disapproval thereof in writing. The local board

or council may, by a two-thirds (2/3) vote of all its members and

within fifteen days from the date of receipt of a copy of the vetoed

ordinance, repass the same over the veto, in which case it shall be

deemed approved without the local chief executive's approval or

signature. If the local chief executive fails to approve or veto the

ordinance within ten days after receipt of a copy thereof, it shall

likewise be deemed approved.

The ordinance fixing the rate of

real property tax shall remain in full force and effect unless amended

on or before September fifteenth of the year next preceding the one in

which the amendment is to take effect. Any ordinance reducing the

existing rates of real property tax shall be subject review by the

Secretary of Finance who shall act thereon within sixty days upon

receipt of a copy thereof; otherwise, the reduced rates shall be deemed

effective on the first day of January of the succeeding year.

SEC.

40. Exemptions from Real Property Tax.—The exemption shall

be as follows:

Real property owned by the Republic of the Philippines or any

of its political subdivisions and any government-owned corporation

so exempt by its charter: Provided; however, That this

exemption shall not apply to real property of the abovenamed entities

the beneficial use of which has been granted, for consideration or

otherwise, to a taxable person.

Non-profit cemeteries or burial grounds.

Charitable institutions, churches, personages or convents

appurtenant thereto, mosques, and all land, buildings, and improvements

actually, directly and exclusively used for religious or charitable

purposes.

Real property in any one city or municipality belonging to a

single owner the entire assessed valuation of which is not in excess of

five hundred pesos: Provided, however, That the property so

exempt shall be assessed and records thereof kept as in other cases.

Land acquired by grant, purchase or lease from the public

domain for conversion into dairy farms for a period of five years

from the time of such conversion; and machinery of a new and preferred

industry as certified by the Board of Investments used or operated for

industrial, agricultural, manufacturing; or mining purposes, during the

first three years of the operation of the machinery.

Perennial trees and plants of economic value, except where the

land upon which they grow is planted principally to such growth. (g)

Real property exempt under other laws.

Section 41 An additional one per cent tax on real property for the Special Education Fund.

SEC. 41. An additional one per cent tax on real

property for the Special Education Fund.—There is hereby imposed an

annual tax of one per cent on real property to accrue to the Special

Education Fund created under Republic Act No. 5447, which shall be in

addition to the real property tax which local governments are authorized

to levy, assess and collect under this Code; Provided, however,

That when the entire total assessed valuation of real property situated

in a province or city assessable to any one person does not exceed three

thousand pesos, the additional one per cent tax herein imposed shall

not be collected.

Section 42 Additional ad valorem tax on idle lands.

SEC. 42. Additional ad valorem tax on idle lands.—The

President of the Philippines, at his discretion or upon recommendation

of the Secretary of Finance, may authorize provinces, cities and

municipalities to levy, assess and collect an additional real property

tax on idle private lands at a rate of not exceeding two per cent per

annum based on the prevailing assessed value of the property.

Section 43 Idle lands, coverage.

SEC. 43. Idle lands, coverage.—For purposes of this

Code, idle lands shall include the following:

Agricultural lands more than five hectares in area suitable

for cultivation, dairying, inland fishery and other agricultural uses,

three-fourths of which remain uncultivated or unimproved as

certified to by the provincial agriculturist. In the case of

agricultural lands planted a permanent or perennial crop with at least

one hundred trees to a hectare shall not be considered idle land.

Lands actually used for grazing purposes shall not also be considered

idle land.

Urban lands in chartered cities and municipalities exceeding

five thousand square meters in area, two-thirds of which remain

unutilized or unimproved as certified to by the provincial or city

assessor. This section shall likewise apply to residential lots or

subdivisions duly approved by proper authorities, the ownership of which

has been transferred to individual owners. If the acquired

lots, however, remain, because the subdivision itself is not developed

in accordance with its subdivision plans, the imposable under Section

forty-two of this Code on the individual lots shall be assessed on

the subdivision and paid for by the subdivision owner.

Individual lots of such subdivisions, the ownership of which has not

been transferred to the buyer shall be considered as forming part of the

subdivision.

Section 44 Idle lands exempt from tax.

SEC. 44. Idle lands exempt from tax.—The special

levy on idle lands shall not apply to landowners who are unable to

improve, utilize or cultivate their lands due to any of the following

causes:

Adverse peace and order conditions as certified to by the

provincial commander, unless, upon restoration of the peace and order in

any locality duly certified by the said provincial commander and if

within one year from the date of such certification the idle land has

not been improved, utilized or cultivated, a tax may be imposed thereon

pursuant to Section forty-two hereof.

Financial loss of the landowner due to fire, flood, typhoon,

earthquake and other causes of similar nature duly attested by the

owner in an affidavit to be submitted to the provincial or city assessor

stating the ground or grounds therein, unless the idle land is not

improved to the extent prescribe in the next preceding Section within

two years from the date of the occurrence of the loss, in which case,

the tax imposable under Section forty-two hereof may be levied.

Existing court litigations involving the land subject to tax

mentioned in this chapter as certified by the Court under which the case

is pending unless said land is not improved within one year after the

final adjudication of the case, to the extent provided in the

next preceding Section, in which case, the tax imposable under Section

forty-two hereof may be levied.

Necessity to leave the land in a follow state as

certified to by the provincial agriculturist stating, among others, the

length or time which that land shall be considered any for product,

unless the idle land is not improved to the extent prescribed in the

next preceding Section within one year after the termination of the

period, in which case, the tax imposable under Section forty-two

hereof may be levied.

Unfavorable physical factors, such as rocky nature of ground

and uneven topography the case of agricultural land, which render

the land unsuitable for cultivation, as certified to by the

provincial agriculturist.

In all cases the landowner shall be duly notified by the

provincial or city assesor, as the case may be, of the imposition of the

tax.

Section 45 Application for exemption.

SEC. 45. Application for exemption.—Within

two years from the approval of this Code, any person having legal

interest on the land, desiring to avail of the exemption under Section

44 hereof, shall file the corresponding application therefor with the

assessor of the province or city where the land is situated. The

application shall state the ground or grounds under which the exemption

is being claimed.

The Secretary of Finance shall promulgate rules

and regulations for the proper implementation of the provisions of this

Section.

Section 46 Listing of idle kinds by the assessor.

SEC. 46. Listing of idle kinds by the

assessor.—The provincial or city assessor shall make and keep an

updated record of all idle lands within one year after the approval of

this Code and every year thereafter. For purposes of collection, the

provincial or city assessor shall furnish a copy thereof to the

provincial, city or municipal treasurer, as the case may be, who shall

notify on the basis of such record the person having legal interest on

the lands of the imposition of the additional tax.

Section 47 Special levy by local governments.

SEC. 47. Special levy by local governments.—The

provincial, city, municipal boards or councils may, by ordinance,

provide for the imposition and collection of a special levy on the lands

comprised within the province, city or municipality or parts thereof

especially benefited by the laying out, opening, construction,

straightening, widening, grading, paving, curbing, walling, deepening or

otherwise establishing, repairing, enlarging, or improving public

avenues, roads, streets, alleys, sidewalks, parks, plazas, bridges,

landing places, wharves, piers, decks, levees, reservoirs, waterworks,

water courses, esteros, canals, drains, and sewers: Provided,

however, That the special levy herein authorized shall correspond

only to a part not exceeding sixty per cent of the costs of said

improvements or infrastructures financed by the province, city or

municipality, as the case may be, including the costs of acquiring-land

and such other real property in connection therewith. Within the meaning

of this Section, all lands comprised within the district benefited,

except lands exempt from the real property tax under Section forty

hereof, shall be subject to the payment of the special levy.

Section 48 Ordinance imposing a special levy.

SEC. 48. Ordinance imposing a special levy.—Tax

ordinance providing for the levying and collection of a special levy

shall describe with reasonable accuracy the nature, extent and location

of the work to be undertaken; the probable cost of the proposed work so

established, the limits whereof shall be stated by monuments and lines,

and the number of annual installments, which shall not be less than five

nor more than ten, in which said special levy shall be payable. The

provincial board, municipal board or city council, or municipal council

shall not be obliged, in the apportionment and computation of the

special levy, to establish a uniform percentage of all lands subject to

the payment of the tax for the entire district, but it may fix different

rates for different parts or sections thereof, depending on whether

such land is more or less benefited by the proposed work; nor shall the

provincial board, the municipal board or city council, or municipal

council be required to follow the percentage limitations imposed by

Section thirty-nine of this Code.

The provincial, city or municipal engineer shall make the

plans, specifications and estimate of the proposed work.

SEC.

49. Publication of proposed ordinance imposing a special levy.—The

proposed special levy ordinance shall be published, with the list of

the owners of the land affected thereby, once a week for four

consecutive weeks in any newspaper published in the locality, one in

English, and one in the local dialect, if there be any, and in default

of local papers, in any newspaper of general circulation in the

province, city or municipality. The said ordinance in English, and in

the local dialect, shall also be posted in places where public notices

are generally posted in the city or municipality and places affected by

said improvement, and shall also be published once a week during four

consecutive weeks by crier.

The provincial, city or municipal

secretary, shall, on application, furnish a copy of the proposed

ordinance to each landowner affected, or his agent, and shall if

possible, send to all a copy of said proposed ordinance by mail or

messenger.

Section 50 Protest against special levy.

SEC. 50. Protest against special levy.—Not

later than thirty days after the last publication of the ordinance and

list of landowners included in the zone subject to special levy, a

protest may be submitted to the provincial, municipal, or city board or

council, signed by a majority of the landowners affected by the proposed

work, setting forth the addresses of the signers and arguments in

support of their objection or project against the improvement to be made

or against the special levy imposed by ordinance. If no protest is

filed within the time and under the conditions above specified, the

provincial, city or municipal ordinance shall become final and effective

in all points after its approval by the corresponding board or council.

Section 51 Hearing a protest.

SEC. 51. Hearing a protest.—The board or council,

shall designate a date and place for the hearing of the protest nice in

accordance with the next preceding Section and shall give reasonable

time to all protestants who have given their address and to all

landowners affected by any protest, and shall order the publication once

a week, during two consecutive weeks in any newspaper of the locality,

if there be one, of general circulation in the province, city or

municipality, or a notice in English or in the local dialect, of the

place and date of the hearing to be held. Said notice shall likewise be

posted in the places where public notices are usually posted in the

province, city or municipality and places affected by the improvement.

After the proper hearing, the board or city council, shall render its

final decision confirming, modifying or revoking its ordinance, and

shall send notice of its decision, to all interested parties who have

given their addresses, and shall order the publication of such decision,

together with a list of the parcels of land affected by the special

levy, three times weekly, for two consecutive weeks, in the manner

hereinabove specified. The decision of the municipal council shall

become final, if, before expiration of thirty days from the date of its

last publication, no appeal is filed with the provincial board

against the proposed improvement or against the special levy, signed by

at least a majority of the landowners affected. The appellant or

appellants shall immediately give the municipal council a written notice

of the appeal. In the case of the province or city, the decision of the

provincial board or city council is not appealable but shall become

final after the expiration of thirty days from its last publication.

Section 52 Decision of the appeal.

SEC. 52. Decision of the appeal.—If an appeal is

taken from the decision of the municipal council in the manner provider

for in the next preceding Section, the said council shall forward to

the provincial board an except from the minutes of said council relative

to the proposed improvement and all other documents in connection

therewith, within ten days after receipt of the notice of appeal. The

provincial board shall designate the place and set a date which shall be

within thirty days following receipt of the board of the documents from

the municipal council, for the hearing of the appeal, giving both

parties notice thereof. During the hearing of the appeal, the municipal

council shall be represented and heard, and the provincial board shall

examine de nove all points involved in the protest filed, and

its decision thereon shall be final.

Section 53 Fixing the amount of special levy.

SEC. 53. Fixing the amount of special levy.—The

special levy authorized under Section forty-seven hereof shall be

apportioned, computed, and assessed according to the assessed valuation

of such lands, as shown by the books of the assessor, or its current

assessed value as fixed by said officer in the first instance if the

property does not appear of record in his books. Upon the approval of

the ordinance, the provincial or city assessor shall forthwith proceed

to determine the annual amount of special tax assessed against each

parcel of land comprised within the district especially benefited and

shall send to each landowner a written notice thereof by ordinary mail.

If upon completion of work it should appear that the cost thereof is

smaller or greater than the estimated cost of the work, the provincial

or city assessor shall without delay proceed to correct the assessment

by increasing or decreasing, as the case may be, the special tax on each

parcel of land affected, for the balance of the unpaid annual

installments. If all annual installments have already been paid, the

provincial or city treasurer shall fix the amount of credit to be

allowed to, or the additional special tax to be levied upon the land, as

the case may be. In all cases, he shall give notice of such

rectifications to the parties interested.

Section 54 Payment of special levy.

SEC. 54. Payment of special levy.—All sums due

from any landowner or owners as payment of special levy shall be payable

to the provincial or city treasurer or his deputy in the same manner as

the annual ordinary tax levied upon real property, in accordance with

the provisions of the preceding sections, shall be subject to the same

penalties for delinquency and be enforced by the same means as said

annual ordinary tax; and all said sums together with any of said

penalties shall, from the dates on which they were assessed, constitute

special liens upon the land concerned and shall have preference over

other liens there may be on said lands with the sole exception of the

lien for non-payment of the ordinary real property tax.

Section 55 Special levy by the National Government.

SEC. 55. Special levy by the National Government.—The

Secretary of Finance may, by Department Order issued for the purpose,

provide for the imposition and collection of a special levy on lands

especially benefited by public works projects financed by the National

Government corresponding to a part not exceeding sixty percent of the

costs thereof as certified by the Secretary of Public Works,

Transportation and Communications, the proceeds of which shall accrue to

the general fund of the National Government. The special levy shall be

apportioned, computed, and assessed according to the assessed valuation

of such lands as shown by the books of the assessor, or its current

assessed value as fixed by said officer if the property does not appear

of record in his books. The tax shall be collected by the local

treasurers who shall remit their collections to the National Treasurer

in accordance with the rules and regulations issued by the Secretary of

Finance for the purpose of implementing this Section.

The Special levy herein authorized may within sixty days from

the date of publication of the Department Order in the Official Gazette

be protested with the Secretary of Finance and if not reconsidered or

rescinded may thereafter be appealed to the proper court for decision.