Bureau of Local Government Finance Opinion

February 7, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the Regional Director for Local Government Finance, Department of Finance, Region IV, People's Mansion Compound, Batangas City. This refers to the request of the City Assessor of Lipa City for opinion as to whether the real properties (land and building), known as Casa de Segunda and located at 198 Rizal St., Lipa City, Batangas may be granted real property tax exemption. It appears that the abovementioned request is being made in view of the appeal filed by Hortencia D. Bello and Manolita D. Malabanan, in behalf of the property owners of Casa de Segunda, it being "granted a historical marker by the National Historical Institute in recognition of its historical and cultural values and has been accredited as Museum by the Department of Tourism in 1997. The attached Accreditation (No. R-IV-TRE-02897) issued by the Department or Tourism, reveals that Casa de Segunda has been accredited as "Segunda Katigbak Museum," on August 20, 1997. It may be emphasized, however, that a mere accreditation from the Department of Tourism does not automatically entitle any real property to tax exemption, particularly that which appears to be a private museum, like in this case, Casa de Segunda. In this connection, please be informed that R.A. No. 7160, also known as the Local Government Code of 1991, is very specific regarding real properties that should be granted exemption from real property taxation. Section 234 thereof, provides as follows: 'SEC. 234. Exemptions from Real Property Tax . The following are exempted from payment of the real property tax: "(a) 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; "(b) All charitable institutions, churches, parsonages or convents appurtenant thereto including mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements which are actually, directly and exclusively used for religious, charitable or educational purposes; "(c) 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; "(d) All real property owned by duly registered cooperatives as provided under R.A. No. 6938; and "(e) Machinery and equipment exclusively 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." Evidently, real properties which have been accredited as museum by the Department of Tourism, are not among those included in the exemptions specifically provided under the Code. STcHDC In view hereof, this Bureau believes that Segunda Katigbak Museum falls under the category of "Cultural' properties and is, therefore, subject to real property tax with an Assessment Level of not more than fifteen percent (15%), pursuant to Section 218(d) of the Local Government Code of 1991, providing for the Assessment Levels for "Special Classes" of real properties. (SGD.) MA. PRESENTACION R. MONTESA Executive Director