Bureau of Local Government Finance Opinion

March 2, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 4th Indorsement Respectfully returned to the Regional Director for Local Government Finance, Region I, 2nd Floor, Mabanag Justice Hall Building Governor Luna Street, San Fernando, La Union, her within 1st Indorsement dated April 4, 2000, requesting a ruling or opinion on whether or not residential buildings with market value of P175,000 and below are subject to the payment of real property tax or if the Province of Pangasinan is exempted from the provisions of Section 218 of R. A. No. 7160, otherwise known as the Local Government Code of 1991. It appears that the subject matter was prompted by the report submitted by the evaluators of that Office that, although the new Schedule of Base Unit Construction Cost for buildings and other improvements of the Province of Pangasinan was already approved under Resolution No. 414-96, the Provincial Assessor's Office, same province, still applies the assessment level provided for under P. D. No. 464, hence, all residential buildings in said province with market value of P175,000 and below are still subject to real property taxes. Simply stated, the 0% assessment level for residential buildings with market values of P175,000 and below, as provided for under Section 218(b)(1) of R. A. No. 7160, is not being applied in Pangasinan. Section 1(c) of the Local Assessment Regulations No. 1-92 dated October 6, 1992 of the Department of Finance, provides that provinces and cities are allowed to undertake partial general revision of real property assessments. The Provincial Assessor of Pangasinan, in his 3rd Indorsement dated January 23, 2001 submitted the information that:. 1. The members of the Sangguniang Panlalawigan of said province conducted a series of hearings which were attended by local officials of the different municipalities of the province wherein they were convinced that "there is a compelling need not to revise the assessment of buildings." 2. That under Resolution No. 113-96, series of 1996, the Sangguniang Panlalawigan opted to conduct partial general revision of real property assessments, that is, "the province first revised (assessments for) lands and did not undertake revision (of assessments) of buildings." 3. That the revision of real property assessments on buildings and improvements was excluded for reason that they fear the real property tax collection will decrease. CcaDHT 4. The said Provincial Assessor also added that it is his contention that unless and until the said Sangguniang Panlalawigan will pass an Ordinance or Resolution directing the implementation of the new assessment levels pursuant to R. A. No. 7160, the province cannot implement it because the previous resolution is still in force. It is also reported that the Provincial Assessor's Office still use the old Base Unit Construction Cost for buildings. It is worthwhile to note hereon that Section 17(e) of said Local Assessment Regulations No. 1-92 dated October 6, 1992 of the Department of Finance provides as follows: "Section 17. Assessment Level. . . . "(e) Assessment levels above shall be applied initially during the first general revision of real property assessments to be undertaken pursuant to Section 219 of the Code. Thus, the assessment levels applied in the 1981-1984 general revision of real property assessments that took effect on July, shall be maintained until after the first general revision of real property assessments under the provision of said Section 219 of the Code, shall have taken effect ." Emphasis supplied) It is evident, therefore, that the assessment levels prescribed under R.A. No. 7160 shall be applied only during the first general revision of real property assessments undertaken under Section 219 of the said Code. Hence, for provinces and cities that did not conduct the said general revision of assessments, or failed to undertake a complete general revision of real property assessments on account of the abovecited provision of the said Regulations, the assessment levels applied during the 1981-84 general revision of assessments, have to be maintained for assessments covering properties that were not revised. In view of the foregoing, and considering that in the first general revision of real property assessments in Pangasinan in effect excluded buildings and other improvements, the non-application of the 0% assessment level for residential buildings with market value of P175,000 and below, is deemed to be in compliance with the abovecited provisions of the said Regulations, and therefore the same is hereby considered tenable. EIAScH (SGD.) BENJAMIN A. GERONIMO Executive Director