What is Real Property Tax?
According to the Lifeblood Doctrine, taxation is the lifeblood of the government. Without taxation, there is no government ; that the government cannot exist without tax.
Real Property Tax, also known as the financial backbone of local governments, are revenues collected to significantly finance the country’s public amenities and property assets that affect community development, e.g. city parks, police stations, hospitals, local housing markets, and etc. To simply put, property taxes are the money received by the government through taxing its citizens, and is spent towards the production of safety, health, employment and other fundamental needs of the people.
According to Article 415 of the Civil Code of the Philippines, real property is defined as immovable property falling under:
(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object;
(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has placed them or preserves them with the intention to have them permanently attached to the land, and forming a permanent part of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or stagnant;
(9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over immovable property.
“AMILYAR” – Are you familiar with it?
“Amilyar” or millarmiento in Spanish, is a term commonly used in the Philippines for Real Property Tax – a colloquial term used when describing property taxes.
Under Republic Act No. 7160, also known as the Local Government Code of 1991, specifies the power of local government units to collect ad valorem tax from properties within its population. Revenues summoned become part of the expenses for public use. Citizens who deny their obligation to pay taxes are subject to penalties and criminal liability. Fines imposed due to failure to pay real property tax are stated under Section 255 of R.A. 7160.
Are there any Exemptions to the General Rule?
Yes. Provided under Section 234 of R.A. No. 7160, the following properties are exempted from real property tax:
(1) 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;
(2) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, non-profit or religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes;
(3) 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;
(4) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938; and
(5) 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.
Document Preparations as the Owner of the Property
As the owner of the property, it is but vital to bring the following documents as a taxpayer before the city or municipal treasurer to secure your yearly real property tax assessment:
- Tax Declaration or if not available, the Original Certificate of Title or Transfer Certificate of Title/Condominium of Title
The aforementioned documents are to be submitted for assessment – by contrast, when you have already paid your real property tax before, it is best to secure and show your Tax Receipt from your previous transaction.
Real Property Tax is paid quarterly, however you may secure a discount if you pay one year in advance. City or Municipal treasurer usually begins the releasing of real property tax assessment as early as November of the current year for the following year’s real property tax assessment. The discount can be as much as 10 to 20% depending on the city or municipal treasurer.
Should you need help or assistance in the payment of the Real Property Tax, you may contact us at info@filedocsphil.com or +63.977.241.5709.