Top Story

By Kristine Joy V. Patag

Supreme Court stops QC from collecting higher realty tax

Posted on April 19, 2017

BAGUIO CITY -- The Supreme Court on Tuesday halted Quezon City’s realty tax hike that took effect in January, but the order may be of little help for property owners who have already settled this annual obligation partly or in full.

Real property tax was the Quezon City’s second-biggest revenue source after business tax in 2015.
Property owners have the option of settling this tax in whole by March 31 if they want to avail of a 20% discount, or quarterly with a 10% discount if done within the set deadlines of March 31, June 30, Sept. 30 and Dec. 31.

“The Court issued a temporary restraining order (TRO), effective immediately and until further orders from the Court, enjoining respondents from implementing, collecting upon, or enforcing Quezon City Ordinance No. 2256 (series of 2016) which approved fair market value of lands and basic unit construction costs for buildings and other structures for the revision of real property assessments in Quezon City,” the media brief released by the court’s Public Information Office read.

The case stemmed from a petition which the Alliance of Quezon City Homeowners Association, Inc. (AQCHAI) filed against the Quezon City government, represented by Mayor Herbert M. Bautista.

“Respondents are... directed to comment on the petition within 10 days from notice,” the brief further reads, referring to fellow respondents Quezon City Assessor’s and Treasurer’s offices.

The local law raised fair market values of residential, commercial and industrial real properties by 400-733.33% -- consequently raising tax payable by property owners by 39-131% -- after the Commission on Audit reminded Mr. Bautista in an Oct. 7 letter that such values were last adjusted in December 1995, even if Republic Act No. 7160, or the Local Government Code of 1991, requires adjustment every three years.

Asked on the TRO’s effect, if any, on those who have already settled the tax completely or in part, SC Spokesperson Theodore O. Te replied in a mobile phone message: “None as far as the QC ordinance is concerned; [this is] just a TRO.”

Sought separately for comment, Mr. Bautista said in a phone interview yesterday that while he has yet to see a copy of the SC order, “‘Yung iba na nagbabayad ng quarterly, I will ask the City Legal and City Treasurer if we can still collect (from those who have chosen to pay quarterly).”

“Of course, kung hindi kami magko-collect (if we do not collect the bigger tax due), that significant amount that will hamper city services.”

Mr. Bautista said that tax collected will be the “basis of special education fund which takes care of the needs of the K-to-12 Program like school buildings and science laboratories” and will also support law-and-order programs for the city’s 142 barangays.

The city expects to rake in an additional P600-700 million this year as a result of the tax hike. Real property tax was the city’s second-biggest revenue source after business tax, accounting for about a fifth of some P17.919-billion gross collections in 2015 that, in turn, were 9.43% in excess of a P16.374-billion goal for that year and 15.52% more than 2014’s P15.512-billion take.

The ordinance was opposed by other groups besides AQCHAI: SM Group; the Association of Filipino Franchisers, Inc.; Philippines Retailers Association; Quezon City Association of Filipino-Chinese Businessmen, Inc.; Loyola Grand Villas Homeowners Association, Inc. and La Vista Association Inc.