I was informed by my parents that due to financial problems, my parents failed to pay the real property tax due for our properties. Will there be interests to be paid if I will pay the said taxes in full?
Taxation is the lifeblood of the government. It is from this power that the government derives money for its expenditures. It is the duty of every real property owner to declare his/her property for taxation purposes and to pay the required taxes as mandated by the 1991 Local Government Code and/or the ordinances promulgated by the local legislative bodies. One of the taxes that every citizen who has real properties must pay is the real property tax.
Real property taxation covers the levy, assessment and collection of an annual ad valorem tax that may be levied by a province or city or a municipality within the Metro–politan Area on real property such as land, building, machinery and other improvements affixed or attached to real property and special levies such as the special educational fund, idle land tax or special levy or assessment tax. For purposes of assessment, real property shall be classified as residential, agricultural, commercial, industrial, mineral, timberland or special. 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 concerned local legislative bodies (Jose C. Vitug and Ernesto D. Acosta, Tax Law and Jurisprudence, page 491).
Under the law, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year. However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates. Payment of all local taxes, fees, and charges shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be. The Sanggunian (local legislative body) concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months (Sections 165-167, Local Government Code of 1991).
The local legislative body concerned may impose a surcharge not exceeding twenty-five percent (25%) of the amount of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent (2%) per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid. However, the total interest on the unpaid amount or portion thereof shall not exceed thirty-six (36) months (Section 168, Local Government Code of 1991).
Failure on the part of a taxpayer to pay the required taxes on the said real properties will make him liable to pay the corresponding penalties and interests. However, charges or penalties may not be higher than 25% of the unpaid amount of taxes and the interest shall not be higher than 2% per month. To prevent payment of higher rates of interest and penalties, you may pay the required real property taxes the soonest possible time. You can go to the local government unit concerned to make your payments.
We hope that we were able to address your query. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to firstname.lastname@example.org