Review on RPT ordinances pushed

CEBU, Philippines — The Cebu City Legal Office (CLO) is now urging the Cebu City Council to revisit existing ordinances relative to real property payments that would be affected by the implementation of the Real Property Valuation and Assessment Reform Act (RPVARA).

In a response to a council resolution, the legal opinion signed by handling city attorney Lawyer Luigine Christi Chan, noted that several properties in the city showed delinquency in payments, and further recommended making collection remedies.

Chan’s position follows the order of the council for the CLO to render a legal opinion on the salient provisions of the RPVARA and submit it within 15 days.

This after the Cebu City Council last June 20, 2024 urged the revisitation of the city’s proposed ordinance on the revised Real Property Tax (RPT) and deferred its discussions following the signing of national law on the RPVARA last month that has overtaken the RPT provisions.

In his privilege speech, Councilor Rey Gealon, chairman of the Committee on Laws of the City Council, raised concerns on the proposed revised RPT ordinance authored by Councilor Noel Wenceslao due to the RPVARA.

As such, Gealon raised a motion directing the CLO to submit a legal opinion on the matter.

In their legal opinion, the CLO emphasized that despite having the Bureau of Local Government Finance (BLGF) primarily establish the Real Property Valuation Service instead of leaving the matter to the local assessors and local legislators, the local government will also have a real property valuation unit (RPVU) under the City Assessor.

The city legal also said that the preparation of the Schedule of Market Values (SMV) requires an added requirement of a report on the impact on the city's revenue and impact on the taxpayers.

“This ensures that the local assessors and local treasurers have thoroughly studied the impact of the values on the revenue of the city before it is transmitted to the local chief executive,” their opinion reads.

The office added that there was no impact report prepared when the proposed ordinance of Wenceslao was laid down for scrutiny by the council.

Aside from these, the same legal opinion further laid down the LGU’s responsibility once the RPVARA came into law. Among these responsibilities is that the LGU shall conduct a general revision of property assessments and classifications, and send new assessment notices to the property owners.

“This is what is lacking in the proposed city ordinance of Honorable Wenceslao. What the latter seeks to amend is only the schedule of base unit market values,” the CLO further said.

“It leaves the assessment values and tax rates as it is that is why the public sentiment is negative because this will surely result to a major increase in taxes which may be imposed upon them,” the CLO added.

The City Legal Office also clarified that with the enactment of the RPVARA, these updated values do not necessarily mean higher taxes adding that local governments can adjust assessment levels and tax rates to mitigate the impact on the people.

Further, the CLO also underscored that LGUs shall update the SMVs and conduct a general revision of property assessments and classifications every three years as mandated in the Local Government Code of 1991.

According to the office, this is not properly implemented mainly because of “political reasons”.

“The updating of the values of real estate, which usually appreciates, can cause a negative sentiment on the constituents and political supporters,” the CLO added.

Cebu City last updated the RPT rates in 2003, which was implemented only in 2006 because of several deferment ordinances.

The City Legal emphasized that non-compliance with the said provisions may already subject the concerned government officials to a fine equivalent from one month to six months of the official or employee's basic salary, or by suspension from government service for not more than one year.

They added the enactment of the RPVARA imposes greater responsibilities on the part of the concerned local government departments, such as the City Assessor and the City Treasurer.

“Since this ordinance will ultimately be superseded when the law will be fully implemented, this Office recommends that the city council revisits related ordinances, such as Cebu City Ordinance No. 2483 and City Ordinance No. 2363 on the redemption of properties,” they said.

According to the office, at the current schedule of market values, assessment levels, and tax rates, there are already several properties forfeited in favor of the City Government but its documentation and registration procedure have not been completed.

This resulted in further losses on the part of the city government.

The city legal also cited that there are also instances when the lot has updated real property payments, but the improvements on the lot became delinquent and eventually forfeited in favor of the city.

This also resulted to lots being privately-owned, but the buildings are owned by the City.

“The council, while already in the process of revisiting the ordinances and regulations affecting real property taxation, should also consider revisiting the city's collection remedies, as well as those of the taxpayers,” CLO stressed. –/ATO (FREEMAN)