Bureau of Local Government Finance Opinion

March 21, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 5th Indorsement Respectfully returned, thru the Regional Director for Local Government Finance, Department of Finance, Region IV, People's Mansion Compound, Batangas City, to the City Assessor, San Pablo City, the within preceding 4th Indorsement dated October 18, 1998, relative to the letter dated August 17, 1998 of Mr. Aristeo A. Lat, Jr., Vice President and General Manager, San Pablo Memorial Park, requesting assistance concerning the alleged increase in the assessment covering the real property (land) owned by said San Pablo Memorial Park (private cemetery), located at Barangay San Gabriel, that city. CSEHcT Mr. Lat contends that the reassessment made by that Office on the subject real property was arbitrary, whereupon they are being made to pay real property taxes amounting to P215,095.28 as against the 1997 realty tax of P6,018.00. On the other hand, in a 3rd Indorsement dated October 15, 1998, that Office informed that the reclassification of the subject property was made on the basis of its actual use (commercial) wherein half of the total area was classified and appraised as third class residential land with a unit value of P300.00 per square meter with a 50% assessment level and the other half was classified as rural-urban with a unit value of thirty pesos (P30.00) per square meter. In this connection, and in order that appropriate action could be taken on the matter, this Bureau directed the conduct of an investigation/ocular inspection of the subject real property of San Pablo Memorial Park, which revealed, among others, that: 1. The subject land has been declared by the City Assessor's Office of San Pablo City in the name of Leonardo Millares, as follows: HCEcaT Area Actual Assessed ARPN (Sq.m.) Class Use Value Effectivity 97-052-0051 45,535 R-3 Com. P6,830,250.00 1997 same 45,535 R-U Res. P273,210.00 1997 same 3,960 Res. Com. P902,790.00 1992 same 87,110 R-U Res. 2. The Unit Value of lands located in that area per attached Schedule of Market Values are as follows: 1990 1994 1997 Rural Urban 30 30 50 Residential 100 100 300 3. Per ocular inspection conducted, it was found that one-half of the subject property covering an area of 45,035 square meters, more or less, is already developed or ready for sale and the other half is still undeveloped. 4. That the lots located surrounding the subject land have been declared by the City Assessor of San Pablo City based on the unit values of P300.00 per square meter (for residential) and P35,380.00 to P40,480.00 per hectare (for coconut land), with effectivity from 1994 to 1996. 5. Per inventory of lots submitted by the Cardinal Management Realty Corporation, the subject lot owned by San Pablo Memorial Park are as follows: ICAcTa xxx xxx xxx 7.2. Common Areas Developed Portion 45,321 sq.m. Saleable Area 24,586 sq.m. Common Area 20,735 sq.m. 7.3 Saleable Areas Lawn Area (5,552 lots x 2.44 sq.m.) 13,547 sq.m. Garden Area (347 lots x. 9.76 sq.m.) 3,387 sq.m. Memorial Court (167 lots x. 19.52 sq.m.) 3,260 sq.m. Junior Estate (1 lot x 39.94 sq.m.) (15 lots x 34.16 sq.m.) (2 lots x. 29.28 sq.m.) (2 lots x 17.08 sq.m.) 644 sq.m. Family Estate (48 lots x 78.08 sq.m.) 3.748 sq.m. 7.4 Details on Saleable Areas Total No. Unsold Sold Lots with of Lots Lots Lots Interments Lawn Area 5,552 856 4,696 1,965 Garden Area 347 94 253 269 Memorial Court 167 82 85 94 Junior Estate 20 3 17 24 Family Estate 48 26 22 55 Total 6,134 1,061 5,073 2,407 7.5 Total Area of Unsold Lots Lawn Area (856 lots x 2.44 sq.m.) 2,096 sq.m. Garden Area (94 lots x 9.76 sq.m.) 917 sq.m. Memorial Court (82 lots x. 19.52 sq.m.) 1,601 sq.m. Junior Estate (2 lots x 34.16 sq.m.) (1 lot x 78.08 sq.m.) 85 sq.m. Family Estate (26 lots x 78.08 sq.m.) 2,030 sq.m. Total 6,722 sq.m. 6. The City Assessor of San Pablo City assessed the developed portion of the said Memorial Park as commercial and the undeveloped portion (rural urban) as residential. 7. Both the unsold and sold lots were declared by the said City Assessor as "taxable". As stated in the report, both the unsold and sold lots were declared by that Office as taxable. In this connection, attention is invited to the Decision of the Central Board of Assessment Appeals (CBAA) on CBAA Case No. 259 dated October 28, 1991, copy enclosed, entitled Rolling Hills Memorial Park, Inc., Petitioner Appellant, vs. Board of Assessment Appeals of Bacolod City, which ruled that "once the ownership of the burial lots has been conveyed to the purchases by means of a Deed of Sale, said burial lots fall within the scope of the term non-profit burial grounds which are exempt from real property tax, since the factor of profitability is not present as regards the purchaser, and unsold burial lots should be classified as commercial as they form part of the developed portion of the cemetery and are still under the category of profit burial grounds." TCIDSa In view of the foregoing, the City Assessor is hereby instructed to make the necessary rectification of the assessment covering the subject real property, where the unsold lots including the undeveloped portion of the said San Pablo Memorial Park should be assessed as taxable; and the lots which were already sold, and/or already with interment, as exempt. The unit values therefore, applied by the said City Assessor are found in order. The City Treasurer thereat, for his part, is hereby instructed to rectify the real property tax collection records of the real property of San Pablo Memorial Park in accordance with the action that the City Assessor is hereby instructed to undertake. ITHADC A consolidated report of actions taken hereon is requested within fifteen (15) days from receipt hereof. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge