Bureau of Local Government Finance Opinion

October 9, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr . Eucherio F. Banares President, Gubat United Labor and Arrastre Service Cooperative (GULASCO) Diaz Street, Gubat, Sorsogon S i r : This refers to your letter dated June 20, 2000 in effect, requesting legal opinion regarding the propriety of the assessment made by the Municipal Assessor of Gubat, Sorsogon, on the house and lot allegedly owned by GULASCO. It is submitted that GULASCO was registered with the Cooperative Development Authority (CDA) on March 12, 1991, as evidenced by Confirmation of Registration No. NG - 002, but the same was allegedly organized and already existing sixteen (16) years ago (that is, as early as 1984). In a letter dated August 29, 2000, the Provincial Assessor of Sorsogon, submitted that per records in their Office, the subject real properties covered by ARP Nos. 1999-09-019-0178 MO and 1999-09-019-0179 BO, respectively, were declared in the name of Union Obrero de Gubat since 1940 up to the present. The said Provincial Assessor also added that the Municipal Assessor of the said municipality informed that a representative from that cooperative (GULASCO) has previously attempted to have the tax declaration on the said real properties transferred in their favor. However, when informed of their arrears/delinquency prior to its CDA registration, the Cooperative elevated its request before this Bureau. In this connection, please be informed that the subject real properties will only be considered exempt from payment of real property taxes when the ownership thereof is transferred from Union Obrero de Gubat to GULASCO, in pursuance of Section 234(d) of R.A. No. 7160, otherwise known as the Local Government Code of 1991, which reads: "SEC. 234. Exemptions from Real Property Tax . The following are exempted from payment of real property tax: "xxx xxx xxx "(d) All real property owned by duly registered cooperatives as provided for under R . A . No . 6938 ." (emphasis ours) Moreover, intention is invited to Section 135 of the same Code, which provides: "Section 135. Tax on transfer of Real Property Ownership . "(a) The province may impose a tax on the sale, donation, barter, or any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. The sale, transfer or other disposition of real property pursuant to R.A. No. 6657 shall be exempt from this tax. DCIEac "(b) For this purpose, the Register of Deeds of the province concerned shall, before registering any deed, require the presentation of the evidence of payment of this tax . The provincial assessor shall likewise make the same requirement before cancelling an old tax declaration and issuing a new one in place thereof. Notaries public shall furnish the provincial treasurer with a copy of any deed transferring ownership or title to any real property within thirty (30) days from the date of notarization." (Emphasis supplied) It is evident from the abovequoted provision of the said Code that the Provincial Assessor should require the presentation of the evidence of payment of the transfer tax before cancelling an old tax declaration and subsequently issuing a new one in its stead. In view of the foregoing, this Bureau finds the action of the Provincial Assessor of Sorsogon on your subject request, well taken. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director