The city government of Manila is set to auction a 22-hectare property in Parola Compound, Tondo, after its owner failed to settle his tax arrears amounting to more than P1 billion, Mayor Joseph E. Estrada announced on Monday.
Estrada said the city was constrained to initiate the move in order to recover the unpaid real-estate taxes totaling P1,096,661,596.73, or at least make use of the lot to house informal settlers.
“Either way, the city will have to take possession of the property as mandated under the law,” the Manila mayor pointed out.
“May this also serve as a warning to delinquent taxpayers,” Estrada added. Classified as a commercial lot under Transfer Certificate of Title 117677, the property is located at the corner of R-10 and Zaragoza Street in Barangay 20, Zone 2, Parola Compound. It is owned by one Felix Sajot, according to the Office of the city assessor.
City Assessor Jose de Juan said Sajot’s real-property tax (RPT) dues, including surcharges and interests, have accumulated to P1.09 billion over the years because he only submitted it for assessment about two or three years ago.
Titled properties without assessment for more than 10 years shall be subjected to 10 years of back taxes plus for the current year, de Juan explained.
“Apparently, he [Sajot] wants to sell it so he had it assessed only a few years ago so he needs a tax declaration,” de Juan added.
Since the probability of the city recovering the P1-billion tax debt is nil, de Juan said the city government has no option but to auction it off.
“We can no longer recover the P1 billion. Our only purpose here is for the city to still benefit from the lot somehow,” de Juan pointed out.
The lot is considered a prime property, with a market value of P7.7 billion, but its big portion is now occupied by informal settlers, according to the city assessor.
Estrada, de Juan added, wants to convert the lot to a vehicle and equipment depot, or sell it to the present occupants through the city’s Land-for-the-Landless Program.
“That is, if there’s no buyer,” he said, adding that no bidder would want to purchase a property with an outstanding tax arrears, especially if it amounts to more than P1 billion.
Once the property is auctioned, de Juan explained the original owner still have one year to redeem it by paying the bid price plus 2-percent interest per month and the expenses incurred by the Office of the City Treasurer in conducting the auction.
Sajot is one of the remaining 45,000 delinquent taxpayers the city government is pursuing this year. So far, he is the property owner that has the highest unsettled tax arrears, according to de Juan.
To avoid Sajot’s fate, de Juan called on the property owners to religiously pay their RPT dues in time.
“If they are ‘early bird’ payers, they can get up to 20-percent discount and avoid the penalties,” he said.
To ease the burden of the property owners, Estrada signed in January City Ordinance 8516 cancelling the 40-percent increase in RPT rates that was supposed to take effect this 2017.
The 40-percent RPT increase set for implementation this January is supposed to be the continuation of the 60-percent increase that had been collected starting January 1, 2014, but Estrada said it is no longer necessary because of the improved financial status of the city government.