The Baguio City Council has passed a resolution requesting Mayor Benjamin Magalong to suspend the implementation of the staggered increase of real property taxes as mandated by the Schedule of Market Values for Land in the City of Baguio (Ordinance 16-2020).
Under Section 4 of the ordinance, the implementation of the increase in real property taxes shall be “staggered over a period of two years such that 70% shall be applied during the first year and 30% shall be applied during the second year.”
Councilors Joel Alangsab and Fred Bagbagen, authors of the resolution, argued that the implementation of the increase of real property taxes is untimely, taking into consideration the impact of the COVID-19 pandemic to real property owners.
The councilors stated the real property tax increase is an additional burden not only to real property owners but also to lessees since the former would consequently increase the latter’s rentals.
“With the gathering restrictions imposed by the city due to the pandemic and scarce business opportunity, some small business and religious congregations have opted to close considering the increase in rent brought by the new schedule of market values which is killing small businesses and is contrary to the battle cry ‘We Heal As One’,” the resolution read.
Under the schedule of market values for land (Ordinance 16-2020), 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 January 17, 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, Elveña 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 101-1995 (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.”
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. **Jordan G. Habbiling
