Part Two
DIFFERENCES in zonal values in a given area vary and can have the widest margin depending on its classification.
San Bartolome,Novaliches, Quezon City, for example, has all the four classification of land or lot in a typical city. These classifications are industrial and commercial regular with an P18,000-per-square-meter (sq m) value; residential commercial and residential condominium with a P16,250- per-sq-m value; residential regular with a high of P15,000 and a low of P5,000 per sq m; and commercial condominium with a P35,000-per-sq-m value.
Pamela Lucas, a resident of Villareal Street, Barangay Gulod, Novaliches, is paying a little more than P5,000 annually in real- property tax for their 200-sqm residential lot and a bungalow-type house covering a floor area of 85 sq m.
Lucas said she believes the prices of lots in her area have been increasing for the last few years. Originally from the Ilocos region, Lucas’s family moved to Quezon City in the early-1970s. A single parent to a college student, Lucas is 44-years old and is currently worki ng in a brokerage company based in Manila.
Lucas’s reckoning
LUCAS told the BusinessMirror, “Three years ago the average price per sq m in my area was only P5,000. But, just last year, my elder sister bought a 400-sq-m lot priced at P6,500 per sq m.”
She added that when they inquired last month, the selling price is already between P8,000 per sq m and P10,000 per sq m.
Lucas’s reckoning with the market value in their area a year ago matches the P6,500-per-sq-m zonal value, which was supposed to be scheduled in 2015.
But based on Finance Secretary Cesar V. Purisima’s announcement that the last actual zonal-value adjustment was made in 2002, the pertinent zonal pricing is P4,000 per sq-m based on the zonal value of the area in 1996. At that time, lots in Villareal Street do not even have a separate zonal value. The zonal-value appraisal was only for Novaliches proper and along the stretch of Quirino Avenue.
The sudden spike of available lots in Villareal, therefore, cannot be attributed to the adjustment last year of zonal values.
FMV
UNDER Section 199(l) of the Local Government Code (LGC), “fair market value” refers to the price at which a property may be voluntarily sold by a seller and may be bought by a buyer.
It is an approved schedule of unit- base market values for different classes of real property (except machinery) prepared by local assessors as basis for computing real-property tax (RPT) assessments, which provinces and cities are authorized to impose under the Local Government Code.
The assessment of real-estate value is fixed through ordinances of the Sangguniang Panlalawigan (provincial council), Sangguniang Pambayan (municipal council) or, in the case of Quezon City, Sangguniang Panlunsod or (city council).
Late last year the Quezon City Council approved an ordinance that revises fair market values in the city. Under Ordinance 141, land values in Quezon City can go up by as high as 300 percent, relative to its location within the city.
During deliberations of the Quezon City Council, Allan Benedict Reyes, member of the council and the author of Ordinance 141, eased taxpayers’ fears and clarified as baseless speculations that a rate of increase in land values will also be applied when computing the tax.
Deliberations
ACCORDING to Quezon City Administrator Aldrin C. Cuña, the fair market value ordinance was supposed to be implemented this year “but we were restrained by the court to revise the schedule of [the] fair market value”.
In April the Supreme Court issued a temporary restraining order for the implementation of the increase in property taxes.
“We’ve waited for 21 years before we scheduled or reappraise all of our property tax,” Cuña told the BusinessMirror, adding that “1995 was our last adjustment of the fair market value”.
Data from the Quezon City assessor’s office showed that, while property
values may increase five times, taxpayers will only have to pay around 39 percent to 131 percent more than what they presently pay in taxes.
Assessment levels were, however, lowered from 18 percent to 5 percent for residential lands. For commercial properties, the payment saw an increase from 45 percent to 14 percent.
These adjustments were made to soften the impact of the increase in property values after the local government conducted consultations with its residents and different stakeholders, according to Cuña.
Revenues
CUÑA said it is not true that higher taxes are being paid by property holders now.
“If you look at it at the market value, the real-property market, they [real estate] sell properties in Quezon City higher than what is indicated in our fair market schedule so we feel that everybody is in the losing end if properties are being sold at a higher rate and ours is still pegged at 1995 rates compared to the 2016 or 2017 rates,” he explained. “The city is losing a lot of revenues, which could have funded several big-ticket projects.”
Cuña said to cushion the burden of citizens while the fair market valuation is being applied, the city council also passed two ordinances designed to alleviate the burden of real-estate taxpayers. The first measure grants an additional 10-percent discount for senior citizens. The second measure provides for an additional 5-percent discount for single parents.
Reyes cited as example a 100-sq- m residential lot, which, under current rates, would have a P900 tax at an 18-percent assessment level with the land valued at P200,000. With the new measure, the value of the land will increase to P1.2 million and the owner will have to pay P1,500 at the new 5-percent assessment level, which is a 60-percent increase.
Both Cuña and Reyes said that, even with the measure, Quezon City remains the only city in the country with a single-digit assessment level.
Cuña said that prior to the implementation of Ordinance 141, the local government had received a memo from the Department of Finance and the Department of the Interior and Local Government “on the matter”, noting the local government code’s general revision in real-property assessment, which must be done every three years. To be concluded
Image credits: Nonie Reyes