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FINALS: REAL PROPERTY TAX, ESSENTIAL TO BUSINESS REGARDLESS OF: a.…

- - - - "ACTUAL USE = PREDOMINANT USE"
        ● The term "actual use" refers to the purpose for which the property is principally or predominantly utilized by the person in possession thereof. Sec. 199(b) , LGC ○ Take note of the bolded words.
  - - - ONCE EVERY
        3 YRS
        JAN 1-JUNE 30
        Such sworn declaration is filed with the local assessor concerned once every three (3) years during the period from January 1 to June 30. Ibid. ○ In relation to this, sometimes the munisipyo issues a new tax declaration reflecting the current market value of a given property. But this role can sometimes be neglected.
      - OWNERS & ADMINS
    - - ACQUIRED RP/IMPROVEMENT
        SWORN STATEMENT -> LOCAL ASSESSOR
        
        TRUE VALUE
        ● Any person who acquires at any time real property or makes any improvement thereon must prepare and file with the local assessor of the province, city or municipality where the real property is located a sworn statement declaring the true value of the said property. Sec. 203, LGC
        
        60D-NOTARIZATION OF DEED
        ● Such sworn statement must be filed within 60 days from the acquisition of such property or from completion or occupancy of the improvement, whichever comes earlier. Ibid.
        ● The 60-day period commences on the date of execution (notarization) of the deed of conveyance. Art. 294, IRR
        
        SAMPLE IMPROVEMENTS
        
        ANOTHER FLOOR
        
        ANNEX
      - CLAIM FOR EXEMPTION
        
        EXEMPTION
        
        30D-DECLARATION
        
        DOC EVID
        Any person who shall claim exemption from real property tax under the LGC shall file with the provincial, city or municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary evidence in support of such claim, including corporate charters, title of ownership, articles of incorporation, by-laws, contracts, affidavits, certifications and mortgage deeds, and similar documents. Sec. 206, LGC
        
        LAPSE -> INCLUDE IN ASSESSMENT ROLL
        PROVE EXEMPT -> DROPPED
        If the required evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in the assessment roll. However, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll. Ibid.
        
        MEANING OF REAL PROPERTY
        
        IMMOVABLES
        ● Land, buildings, and improvements thereon and immovables by destination, including machineries and equipment. ○ The classic definition of real property.
        
        MOVABLES DEEMED IMMOVABLE
        
        PERMANENCE
        OR
        ● See Manila Electric Company v. Central Board of Assessment Appeals, 114 SCRA 273 (1982), involving oil storage tanks placed on leased land, and installed with some degree of permanence as receptacles for the considerable quantities of oil needed by Meralco for its operations.
        
        LGC 119 SPECIAL LAW
        NCC 415 NOT APPLICABLE
        In short, they were indispensable to the business of the respondent. The SC rejected the definition of “immovable” under Article 415 of the Civil Code since the LGC is a special law that prevails over a general law such as the Civil Code.
        
        IMPROVEMENT
        
        "IMPROVEMENT"
        
        VALUABLE ADDITION
        
        ABOVE REPAIR
        
        CAPEX
        
        INTENDED TO ENHANCE
        a. VALUE
        b. BEAUTY
        c. UTILITY
        ● "Improvement" is defined as a valuable addition made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of parts involving capital expenditures and labor, which is intended to enhance its value, beauty or utility or to adapt it for new or further purposes. Sec. 199(m), LGC . E.g., adding an additional floor to an existing house, annex, major renovation of an office, etc.
        
        ● Consequently, the SC held that a tailings dam of a mining company constitutes an “improvement” because it is permanent in character and it enhances the value and utility of the mine. Benguet Corporation v. Central Board of Assessment Appeals, G.R. No. 106041, January 29, 1993, 218 SCRA 271
        
        W/N IMPROVEMENT DEPENDS ON PERMANENCE
        The SC stated that whether a structure constitutes an improvement so as to partake of the status of realty would depend upon the degree of permanence intended in its construction and use.
        
        NOT PERPETUAL, ONLY UNTIL
        PURPOSE IS SERVED :!:
        The term “improvement” does not imply that the improvement must be used perpetually but only until the purpose to which the principal realty is devoted has been accomplished. It is sufficient that the improvement is intended to remain as long as the land to which it is annexed is still being used for the said purpose. Id.
        
        CLASSIFICATION OF REAL PROPERTY
        
        CLASSIFICATIONS (RACISTM)
        
        RESI
        
        AGRI
        
        COMMERCIAL
        
        INDUSTRIAL
        
        SPECIAL
        
        TIMBERLAND
        
        MINERAL
        ● For assessment purposes, real property shall be classified into residential, agricultural, commercial, industrial, mineral, timberland, or special. Sec. 215, LGC
        
        CLASS -> ASSESSMENT LEVEL
        Why are these classifications important? The assessment level that will apply will depend on these classifications of property.
        
        HOSPITAL - MED ARTS BUILDING
        ● The SC added that the mere fact that the doctors hold office in a separate building and that the hospital charges them rent do not transform the medical arts center building into a commercial building or commercial venture that would thereby render it subject to the 35% assessment level applicable to commercial buildings. The fact remains, according to the Court, that the doctors’ services are essential to the overall operation of the hospital and benefit the hospital’s patients. Ibid., citing Herrera v. Quezon City Board of Assessment Appeals, 3 SCRA 186 (1961) and Abra Valley College, Inc. v. Aquino, 162 SCRA 106 (1988)
        
        ASSESSMENT OF REAL PROPERTY
        
        3-STEP
        
        "ASSESSMENT" -> DETERMINE VALUE
        ● The term "assessment" is the act or process of determining the value of a property, or proportion thereof subject to tax, including the discovery, listing, classification, and appraisal of properties. Sec. 199(f), LGC
        
        "ASSESSMENT LEVEL" = %
        a. CLASSIFICATION
        ● "Assessment level" refers to the percentage applied to the fair market value to determine the taxable value of the property. Sec. 199(g), LGC
        -The assessor determines the value of the property and then proceeds to classify it into residential, commercial, industrial, agricultural, mineral, or special, and then, after determining such classification, the assessor proceeds to apply the so-called assessment level.
        
        "ASSESSED VALUE"
        ● "Assessed Value" means the FMV of the real property multiplied by the assessment level. It is synonymous to taxable value. Sec. 199(h), LGC
        
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        EFFECTIVITY OF ASSESSMENTS
        
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