City Assessor Eyes Increase in Real Property Tax

The Cebu City Assessor’s Office says that there is a need to increase the existing tax rates for the real properties. The office added that the increase should have been implemented years before.

City Assessor Eustaquio Cesa explained that the latest general revision of real property tax rates in Cebu City was in 2006 even if the law allows general revision every three years.

Cesa said there should have been a general revision of tax rates in 2009 but nobody from the previous City Council had the courage to do it because the 2010 local and national elections were approaching.

The next revision of tax rates for real properties was supposed to be done last year but again, nobody from the council sponsored the ordinance for it.

Section 218 of Republic Act 7160 or the Local Government Code provides that the assessment levels to be applied to the fair market value of real property to determine its assessed value shall be fixed by ordinances of the City Council, although there is a limitation of the rate.

The law allows a local government unit to collect up to 20 percent tax rate of the assessed market value of lots that are used for residential, 20 percent for agricultural, 50 percent for commercial and industrial.

But at present, the city is still implementing the two (2) percent tax rates to be computed to the assessed market value of the lands, buildings and machineries.

For residential houses or buildings, no taxes shall be collected if the cost of such house or building is below P175,000 but will require 10 percent tax rate for those that cost over P175,000 up to P300,000 and 20 percent from those that cost over P300,000 to P500,000.

Tax rates goes higher as the cost of a structure gets bigger.

Meanwhile, the tax mapping operation of the City Assessor’s Office resulted in the discovery of several properties registered under residential category but are actually utilized for commercial purposes.

Assistant City Assessor Liezel Gonzaga explained that during their three weeks of tax mapping operation conducted in 12 barangays, they have discovered 26 buildings and 27 lots that were only registered as residential but were actually used for business.

They also discovered 97 undeclared buildings, which means the owners have not paid anything to the city for the past years of operation.

Gonzaga explained that for the 26 buildings that were declared as residential, the supposed tax due to the city is only P606.60.

But after it was discovered that these are being used for commercial purposes, the amount of tax will go up to P20,220.

The city was supposed to collect P29,589 taxes from the owners of 27 lots declared as residential but because it was found that these are being used for business, the tax due will also go up to P150,546.

Gonzaga added that the city will also earn P289,732 new taxes from the owners of the 97 newly-discovered undeclared buildings.

She believed that once the tax mapping operations will be completed, more undeclared real properties will be discovered and the city will earn additional revenues.