Bureau of Local Government Finance Opinion

November 25, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Provincial Assessor Baler, Aurora S i r : This refers to your letter dated July 8, 2003, requesting opinion on the following queries, to wit: 1. Inasmuch as the general revision of real property assessments for the Province of Aurora, has allegedly been completed and in full force and effect for the year 2003, can the Sangguniang Panlalawigan thereat lower/decrease the assessment levels provided under the ordinance which has been previously approved by the same Sanggunian; and direct the Provincial Assessor's Office to change all tax declarations in accordance with the promulgated ordinance; 2. Does the Sangguniang Panlalawigan violate the Provisions of Section 219 of the Local Government Code (LGC) of 1991 and Section 17(f) of Assessment Regulation No. 1-92 of the Department of Finance (DOF); 3. Is it lawful to conduct general revision of real property assessments in successive years in case Provincial Ordinance No. 2003-08 is considered valid. It is represented herein that the Province of Aurora conducted an initial general revision of real property assessments after the enactment of the Local Government Code (LGC) of 1991 for the year 1993, which took effect in 1994. Thereafter, the second general revision was conducted in the year 1996, and took effect 1997. Supposedly, a third general revision should have been undertaken in 1999 to take effect 2000, but, because of financial difficulties experienced by the Province of Aurora, the said revision was not at all implemented. CADHcI For year 2002 a general revision of real property assessments was allegedly completed in 2002, to take effect the year 2003. The proposed Schedule of Market Values was allegedly submitted to the Sangguniang Panlalawigan of Aurora on January 11, 2001, for review, evaluation and approval. The Sangguniang Panlalawigan, under Provincial Ordinance No. 2001-82 dated September 25, 2001 approved en toto , the said Schedule of Market Values, to take effect in the year 2003. However, on May 27, 2003, the Sangguniang Panlalawigan of Aurora allegedly enacted Provincial Ordinance No. 2003-08 by reducing the assessment levels provided under Section 2 of Provincial Ordinance No. 2001-82, as follows: Provincial Ordinance No. 2003-08 : "Section 2. The Assessment Levels to be specifically applied to the fair market value of real property shall be 20% for agricultural lands; 10% for residential lands; 25% for commercial lands. For all classes of lands, buildings and other structure/improvements, the assessment levels fixed and provided in Section 218 of RA 7160 shall be applied to determine their assessed value for taxation purposes." The Honorable Governor of Aurora vetoed the subject ordinance for being not in conformity with Section 201 of R.A. No. 7160, otherwise known as the Local Government Code (LGC) of 1991, and Section 17(f) of Assessment Regulations No. 1-92 dated October 6, 1992 of the Department of Finance (DOF), which we quote as follows: "SEC. 201. Appraisal of Real Property . All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code." "SEC. 17. Assessment Levels . The assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the Sangguniang Panlalawigan, Sangguniang Panlungsod or Sangguniang Bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following: xxx xxx xxx "(f) Increase/decrease of assessment levels. The assessment levels for the different classes of real property may be increased or decreased at rates to be fixed by ordinance of the Sangguniang Panlalawigan, Sangguniang Panlungsod, or Sangguniang Bayan of a municipality within the Metropolitan Manila Area, provided, however, that in no case shall such increase or decrease of the assessment levels be made effective in between general revision of assessment periods ." (Emphasis ours) Anent query Nos. 1 and 2, this Bureau believes that although the Sangguniang Panlalawigan thereat reduced the assessment levels provided under Provincial Ordinance 2003-08, it did not, in any way, affect the provision with regard to assessment levels as originally provided under Provincial Ordinance No. 2001-82 because of the prohibition of reducing the assessment levels provided under Section 17(f) of Assessment Regulation No. 1-92. Apparently, Ordinance No. 2003-08 was enacted within the prohibitive period mandated under the law, as such the local Sanggunians can not either, increase or decrease, as the case may be, the assessment levels in between general revision of real property assessments. This is precisely to safeguard the taxpayers' interest as well as the local government unit concerned from any political intervention. In addition, we would like to emphasize that any amendment/readjustment in the Schedule of Market Values, should have been made within ninety (90) days from receipt of the Ordinance pursuant to Section 214 of the Code, which obviously had not been properly observed by the said Sanggunian. The Regional Director under the attached 1st Indorsement dated July 21, 2003, shares the same opinion. As reported, the general revision for CY 2002 has been completed and is now "in full force and effect for the year 2003." That Office, however, did not make mention whether the tax declarations which the Sangguniang Panlalawigan directed the Provincial Office of Aurora to change, have already been sent out to taxpayers concerned. If it did, then the following pronouncements of the Supreme Court, in its Decision dated January 30, 1998 under G.R. Nos. 115253-74, in the case of Antonio Callanta vs. the Office of the Ombudsman and the City Government of Cebu , are worth mentioning: "Indeed, the long-standing practice adverted to by petitioners does not justify a continuance of their acts. We cannot sanction such compromising situations. Henceforth, whenever the local assessor sends a notice to the owner or lawful possessor of real property of its revised assessed value, the former shall thereafter no longer have any jurisdiction to entertain any request for a review or readjustment. The appropriate forum where the aggrieved party may bring his appeal is the LBAA, as provided by law. "The assessment is deemed made when the notice to this effect is released, mailed or sent to the taxpayer for the purpose of giving effect to said assessment." "With respect to real property taxes, the obligation to pay arises on the first day of January of the year following the assessment. Corollarily, on the same date, the right of the local government to collect said taxes also arises. And where the taxpayer fails to question such assessment within the reglementary period provided by law, the local government's right becomes absolute upon the expiration of such period with respect to the taxpayer's property." Corollarily, Section 219 of the Local Government Code provides for the conduct of the general revision of real property assessments within two (2) years from the effectivity of the code and every three (3) years thereafter. For this purpose, BLGF Memorandum Circular No. 04-95 dated March 22, 1995 (copy attached) was issued by the Bureau of Local Government Finance for strict compliance of all concerned, pertinent portions of which provide as follows: "xxx xxx xxx "As regards the application of assessment levels, attention is invited to the provisions of Article 309 (b) and (c) of the Implementing Rules and Regulations (IRR) of the Local Government Code of 1991, which read as follows: 'Article 309. Assessment Levels. '(a) . . . 'xxx xxx xxx '(b) However, said assessment levels shall be applied initially during the first general revision of real property assessments to be undertaken pursuant to Article 310 of this Rule. '(c) Pending the enactment of a Schedule of Fair Market Values under Articles 303 and 310 (b) of this Rule and the effectivity of the revised new assessment levels, the prevailing schedules of market values and the levels currently used by the provincial, city and municipal assessors shall continue to be applied.' "It is evident from the abovequoted provision of law that the new assessment levels shall be initially applied during the first general revision of real property assessments to be undertaken pursuant to Article 310 of the IRR. However, pending the enactment of a schedule of market values and the revised new assessment levels, the prevailing schedule of market values and assessment levels currently used, or that which are prescribed under PD No. 464, shall be applied." As regards query No. 3, it is reiterated that the conduct of the general revision of real property assessments within two (2) years after the of effectivity of the Code is "mandatory." Hence, if the general revision work was completed in CY 2002, the new revised values should take effect beginning 2003 with the next general revision in 2005, to take effect 2006, and every three (3) years thereafter. It is worth mentioning that the conduct of general revision of real property assessment once every three (3) years, has been correctly observed by that office. We hope to have enlightened you on the matter. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director