Bureau of Local Government Finance Opinion

August 1, 2006 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Ignacio S. Gaddi, Sr. Property Manager Burgundy Realty Corporation (BRC) 18th Floor, Burgundy Corporate Tower 252 Sen. Gil Puyat Avenue Makati City S i r : This pertains to your letter dated February 9, 2006, requesting to hold in abeyance the final foreclosure proceedings over the property (common area of Burgundy Plaza) owned by BRC, declared under Tax Declaration No. D-056-06299, located along Katipunan Avenue, Loyola Heights, Diliman, Quezon City, until such time that the final resolution has been handed down by the Local Board of Assessment Appeals (LBAA) of said city. Representations are made that the non-payment of taxes was due to the fact that the tax assessment is being contested and is currently the subject of a pending case before the LBAA of Quezon City under LBAA Case No. 202, S. 2005. As such, the said property was auctioned by the Quezon City Government on April 8, 2005 for non-payment of real property tax. Sound principles dictate that inasmuch as the matter has already been brought before the LBAA, it would be more prudent to await until the matter has been finally resolved therein. However, by way of information, the following are the applicable provisions of law relevant to the issue at hand: HTacDS "SEC. 252. Payment under Protest . "(a) No protest shall be entertained unless the taxpayer first pays the tax. There shall be annotated on the tax receipts the words 'paid under protest'. The protest in writing must be filed within thirty (30) days from payment of the tax to the provincial or city treasurer, or municipal treasurer, in the case of a municipality within Metropolitan Manila Area , who shall decide the protest within sixty (60) days from receipt. (Emphasis supplied) "(b) The tax or a portion thereof paid under protest shall be held in trust by the treasurer concerned. DcaECT "(c) In the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against his existing or future tax liability. "(d) In the event that the protest is denied or upon the lapse of the sixty-day period prescribed in subparagraph (a), the taxpayer may avail of the remedies provided for in Chapter 3, Title II, Book II of the Code." "SEC. 231. Effect of Appeal on the Payment of Real Property Tax. Appeal on assessments of real property made under the provisions of this Code shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without prejudice to subsequent adjustment depending upon the final outcome of the appeal. " (Emphasis ours) It is emphasized that Section 246 of the same code provides that "real property tax accrues on the first day of January and from that date it shall constitute a lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind, and shall be extinguished only upon the payment of the delinquent tax." It is emphasized further that real property tax payment to be made shall be subject to adjustment depending upon the final outcome of the appeal. It is hoped that we have adequately addressed your concern. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director