The Baguio City Council will study the possibility of amending an ordinance passed in 2020 revising the schedule of market values in the city which, in turn, consequently increased the taxes of real property owners.
Pursuant to the ordinance, the increase in real property taxes will be implemented on a staggered basis. Seventy percent of the increase was applied in the first year of implementation of the ordinance (2021) while the remaining 30 percent will be applied in the second year (2022).
The assessment level for residential and agricultural land is fixed at two percent while the assessment level of commercial, industrial, mineral and special classes of lands is at seven percent.
During the regular session last Monday, the council discussed the plight of taxpayers regarding the implementation of the ordinance.
Representing the Baguio Country Club, Atty. Christine Angelica Elveña appealed to the city officials to find ways to mitigate the impact of the increased market value of real properties to taxpayers.
In her presentation of samples of fair market valuation of properties in the city, Elvena claimed that 2,300% would be the highest possible increase in the fair market value for residential properties while 4,778% for commercial properties.
Jeanine Chan, owner of Mountain Lodge, described the real property tax increase as “exhorbitant” and “inequitable.”
To give a concrete example, Chan said the real property tax paid by Mountain Lodge went up from P65,000 to P259,000 per annum.
For Baguio Country Club, the real property tax paid before the revision of the fair market values was about P4 million per annum. For 2022, the company will pay an approximate amount of P11 million.
Almaya Addawe, the city assessor, said the drastic increase in real property taxes in the city was the result of the wide gap in time between the last revision of the fair market value and the current one.
It can be recalled that after the implementation of Ordinance Numbered 101, Series of 1995 (Approving and Adopting the Schedule of Fair Market Values for Lands, Buildings, Machinery, Plants and Trees in the City of Baguio), no general revision has been undertaken since then until recently.
Addawe explained that, aside from the increase in the fair market value, there are also other factors contributing to the sudden increase in real property taxes such as the change in the actual use of properties. Over the years, some residential properties in the city have been converted to commercial properties, increasing their assessed values.
Some erroneous records were also corrected during the general revision of the schedule of fair market value. One sample of a property shown in the record was incorrectly assessed at P18.48 but now has an assessment value at P18,000.00 with an increase rate of 973,926%.
Based on the report of the city assessor, of the 62,398 taxable properties in the city, there are 5,767 properties with no tax increase. The rest had a tax increase at varying rates due to the increase in the fair market value, change of land use, and/or correction of erroneous assessments. The rate of tax increase ranges from one percent to 973,926%. The bulk of the properties with tax increase falls within the range of one percent to 300%.
Addawe asserted that the tax increase reflected in the revised fair market value is “just and reasonable.”
As to the question of Councilor Betty Lourdes Tabanda whether it is possible to lower the assessment level of real properties and to review their classification or use for reassessment, the city assessor said it will be discussed with the Local Finance Committee.
Councilor Benny Bomogao stressed that the burden is lesser on the part of those with smaller lots. However, those with large parcels of land are the ones greatly affected by the tax increase brought about by this new property valuation.
Vice Mayor Faustino Olowan stated that the concerns brought up by the private individuals and companies were “legitimate” and should be addressed by the city.
The city council’s Committee on Laws, Human Rights, And Justice chaired by Tabanda was tasked to revisit the ordinance to find out whether it is necessary and feasible to amend it in order to cushion the financial burden placed on taxpayers. **Jordan G. Habbiling
