Part One
A doctor almost went into shock.
It was just past 17 days of a new year and the physician sat upright from his chair after seeing the assessed value of his property in Quezon City at P5 million. It was only P500,000 the last time he checked.
The doctor wasn’t the only one complaining—some Quezon City residents did on online social-networking platforms, saying their property taxes recently went to the roof.
For Quezon City Administrator Aldrin Cuña, the adjustment was long expected.
Some Quezon City residents who own prime lots along Edsa have land assessed values of only P5,000 per square meter, while their counterparts in Caloocan and Makati cities have their properties assessed from P55,000 up to P80,000 per square meter.
Cuña said unbelievable as it may seem this is simply a result of fair market values on properties not being adjusted in the city for the last 21 years.
According to Cuña, as the P5,000-per-square-meter land value is unrealistic, and no property owner in that area will transact at this rate, any purchase of land in the area would have been amounting from P50,000 per square meter to P80,000 per square meter. But the tax from these transactions would have been very minimal because the legal basis would be the old P5,000 value, resulting to a the huge loss of revenue for the local government, he explained.
Early last year, the Commission on Audit, the Department of Finance (DOF) and the Department of Interior and Local Government (DILG) informed Quezon City that the adjustment is long overdue.
In its Joint Memorandum Circular 2010-01, the DOF and DILG have enjoined local chief executives to adhere to the provisions of the Local Government Code (LGC). Section 219 of the LGC provides that the provincial, city or municipal assessors of the municipalities within Metro Manila shall undertake a general revision of real-property assessments within
two years after the effectivity of the LGC (which was 1991) and every three years thereafter.
However, the implementation for the ordinance approving the revised schedule of fair market value for land, buildings and other structures situated in Quezon City were put on hold in April, after the Supreme Court issued a temporary restraining order.
Zonal value of land
UNDER Title 2 of Republic Act (RA) 7160, otherwise known as the LGC, real-property tax (RPT) refers to the tax on real-property imposed by the local government unit.
The code explains that the RPT for any given year “shall accrue on the first day of January, and the date after shall constitute as lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any kind and shall be extinguished only upon payment of the delinquent tax.”
The phrase simply means that the local government is given legal claim to the real property of a delinquent taxpayer and which when remained unpaid for a certain time is subject to foreclosure and will be sold in the market for the government to get its tax due.
A zonal value refers to the value of land per square meter depending on its classification and which is imposed by the city. The value is fixed and adjusted from time to time by the Bureau of Internal Revenue (BIR).
RA 8424, otherwise known as the Tax Reform Act of 1997, authorized the BIR to divide the country into different zones or area and determine for internal revenue-tax purposes the fair market value of properties in a given area. The BIR determines the value upon consultation both from private and public sectors.
First attempts
IN the case of Quezon City, the first attempt to fix zonal values via the DOF, prior to the enactment of RA 8424, was Department Order (DO) 43-90, or a three-year period from 1990 to 1993. This was followed by DO 29-93, which took effect in June 1993 to August 1996. Another adjustment schedule was implemented in 1998 and 2014.
However, the schedule of adjustment does not necessarily mean an automatic price adjustment for zonal value. For instance, when former Finance Secretary Cesar V. Purisima adjusted the zonal value in Quezon City last year, he said “[it] remained unchanged for the last 14 years,” which would mean that the last actual adjustment of value was in 2002.
With or without zonal value adjustments, however, the value of land in Quezon City has been increasing unrestrained for the last several decades.
A case in point for instance can be made with a quick look at the data from the BIR.
The data, available online, reveals that the zonal value of lots in Tierra Bella, a prime residential subdivision in Barangay Culiat along Tandang Sora Avenue, was only at P1,750 per square meter in 1990. In 1993 it went up to P2,700, and again in 1998 to P7,500. From 2012 to 2014, up to the year before Purisima’s order, a lot in Tierra Bella is valued at P10,000 per square meter.
Barangay Culiat
INTERESTINGLY, in 1987 Tierra Bella was still nonexistent. Likewise, the land classification in the area is only two: residential and commercial residential. The most expensive lot per square meter at that time is only at P1,500, along the Don Mariano Marcos Avenue.
The land in Teachers’ Village was the cheapest at P500 per square meter. All the remaining land is classified as government property.
After 30 years, the cheapest lot in Barangay Culiat is now at P7,500 per square meter, in Saint Dominic IV Subdivision along Tandang Sora Avenue. The most expensive, classified as condominium commercial, is P45,000 per square meter, also along Tandang Sora Avenue.
The cheapest lot in Quezon City in terms of valuation can be found in the most interior streets of Barangay San Bartolome, Novaliches, valued at P3,250 per square meter.
To be continued
Image credits: Nonie Reyes