Bureau of Local Government Finance Opinion

February 15, 2005 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred, thru the OIC-Regional Director for Local Government Finance, Department of Finance, Region IV-A, People's Mansion Compound, Batangas City, to the Provincial Assessor and the Provincial Treasurer, both of Sta. Cruz, Laguna, for full comment and/or appropriate action, the within letter dated October 15, 2004 of Mr. Mario Assedillo, et al., San Isidro Settler Homeowner's Association, Sitio San Isidro, Barangay Kapatalan, Siniloan, that province, in effect requesting assistance for the correct computation of back taxes over a parcel of land (subdivision) covered by CSD-04-003682. The request was made in view of their allegation that the Municipal Assessor of Siniloan subjected them to a 24-year back taxes (from 1980-2004), in the total amount of P1,920,861.60. 2005cdtai In this connection, attention is invited to Sec. 222 of R.A. No. 7160 of the Local Government Code of 1991, which provides hereunder: "SEC. 222. Assessment of Property Subject to Back Taxes . Real property declared for the first time shall be assessed for the taxes for the period during which it would have been liable but in no case for more than ten (10) years prior to the date of initial assessment : Provided, however, That such taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period. (Emphasis supplied) cCaDSA "If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid." Clearly, real properties declared for the first time shall be subject to a maximum of 10 years back taxes only, the appraisal and assessment of which shall be based on the applicable Schedule of Market Values corresponding to the period covered. Further, no interest for the delinquency shall be imposed if the real property tax due thereon is paid on or before the quarter following the date the Notice of Assessment is received by the real property owner concerned. In view hereof, and in order that appropriate action can be taken hereon, information is requested on the following: 1. Whether the subject property is indeed being declared for the first time, in which case Sec. 222 would apply; and 2. Whether there was a previous assessment made on the same property, and when it was made, in which case non-payment of real property taxes from the time it was originally declared would have rendered the property delinquent of taxes due the local government unit. Report of action taken hereon is requested soonest. CaSAcH (SGD.) MA. PRESENTACION R. MONTESA Executive Director