Quezon City Gov’t Mulls Realty Tax Hike, Residents Air Concern

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QUEZON CITY Mayor Herbert Bautista with Vice Mayor Joy Belmonte and former Speaker Feliciano Belmonte Jr. A proposed realty tax increase is under study by the officials as residents air concern over additional burden.

By CLAIRE MORALES TRUE

QUEZON CITY (PhilAmPress) – The Quezon City government is already the richest city and local government unit in the country with an annual revenue of P16 billion collected last year.
But City Hall officials want to increase the revenues further by increasing the current rate of real property tax (RPT) to up to 500 percent.

The plan, contained in proposed ordinance No. 20 CC-141 which is being considered by the City Council and still is subject to public hearings and consultations, immediately sparked fears of high realty taxes from property owners in the city.
City Assessor Rodolfo Ordanes, however, allayed the fears of residents on the proposed tax measure saying it does not set “a colossal increase” in RPT which residents said is “incredibly unjustifiable and simply does not conform to the principles of taxation.
The draft legislation sets the revised schedule of fair market values (FMV) of lands and basic construction cost for buildings in the city as mandated by Section 219 of Republic Act 7160 or the 1991 Local Government Code (LGC), he said.
“We want to clarify that there is no such thing as 500 percent increase in RPT in Quezon City. That is not true,” Ordanes assured local business organizations and property owners that were alarmed by the reports.
What the city government has proposed to be adjusted to up to 500 percent is the FMV of lands and properties in the city that was last adjusted 21 years ago, Ordanes said.
He said the average FMV of residential properties in QC is P5,000 per square meter which the Commission on Audit and the Department of Finance said is already outdated and needs revision as mandated by the LGC.
“While the FMV has indeed increased to up to 500 percent, based on the draft ordinance, we have lowered the current assessment level of 18 percent to only five percent for residential properties, and from 45 percent to only 15 percent for commercial properties,” he explained.
To dispel apprehensions that the proposed revision of the fair market value of lands and properties in Quezon City will be an added financial burden to property owners, the city government assured the public that the planned average increase in real property tax (RPT) is minimal.
“We spend around P200 to P300 a month for texting and phone calls and that’s the average rate every property owner has to pay when we implement the new schedule of fair market values,” said Sherry Gonzalvo, chief legal officer of the Office of the City Assessor.
She said the city government took pains to cushion the impact of the tax adjustments on the city residents, particularly owners of residential properties.
As an example, Gonzalvo said a property owner who has a 100-square meter residential lot classified as Residential 4 (RA4) used to pay P675 annual RPT based on an 18 percent assessment level and a fair market value of P150,000.
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Under the proposed revision, the land’s fair market value will be increased to P800,000 but the assessment level will be reduced to only five percent; thus, the property owner’s new annual RPT rate will be adjusted to only P1,000, or a difference of mere P325.
She said the additional revenue the city government will be able to collect will fund more socio-development programs and projects for the three million residents of Quezon City.

Under the proposed ordinance, the 100-sqm lot’s FMV will be increased to P800,000 but the assessment level will be reduced to only five percent; thus, the property owner’s new annual RPT rate will be adjusted to only P1,000, or a difference of mere P325.
According to Ordanes,  Section 219 of LGC requires city assessors to revise the local government units’ property values every three years.
“Actually, Quezon City has the lowest FMV and RPT compared to highly urbanized cities in Metro Manila, so we have to make the necessary adjustments because clearly we’ve been left behind by our neighboring cities,” Ordanes said.
Moreover, he added, the city’s three million population is fast increasing and the city government needs fresh funds to improve the delivery of basic services and socio-development programs to the people.

“We are just complying with the law. The city government has no intention to make life difficult for city residents when it comes to taxes,” Ordanes said.
As required by the Local Government Code, the Office of the City Assessor and the City Council committee on ways and meansl have been conducting public consultations in the barangays to discuss to the residents the proposed general revision of property values in the city.

Earlier, the Commission on Audit, through state auditor Rose dela Cruz, urged the city government to revise the city’s land and property values, which the agency noted have not been revised over the years, “thus, invariably affecting the real property administration system.”
It said Quezon City last revised its fair market value in Nov. 29, 1995 through Ordinance SP-348, which underwent several amendments until May 26, 2005 through the passage of Ordinance SP-1032.
In addition, the Department of Finance also issued Joint Memorandum Circular 2010-01 enjoining all local government units to implement Section 219 (General Revision of Assessments and Property Classification) of RA 7160 concerning the revision of property assessments and classification every three years.

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