Google Pampanga Real Estate Guide, Trend and Review: NEWS: Proposed Increase in Real Estate Tax in City of San Fernando opposed

Tuesday, January 29, 2008

NEWS: Proposed Increase in Real Estate Tax in City of San Fernando opposed

San Fernando real property tax hike opposed
By Albert B. Lacanlale
CITY OF SAN FERNANDO -- The proposal to increase the fair market values (FMV) of real properties in the city encountered minimal opposition on its way to becoming a local ordinance.
Councilor Alex Patio, chairman of the Provincial Board committee on ways and means, heaved a sigh of relief moments after a public hearing he called to pulse stakeholders on his sponsored ordinance revising the FMV of lands in the city wrapped with negligible opposition among those who attended the affair.
"It is encouraging for officials that our constituency recognizes the benefits of such ordinance for the majority of Fernandinos," he said.

He admitted that his concern prior to the hearing was that stakeholders might take the proposed ordinance negatively against the Provincial Board members.

He has a basis to feel nervous. The ordinance, if implemented, would raise by about 70 percent the FMV of agricultural lands in the city and by 35 percent that of residential lots.

Since FMVs are used to compute real property tax (RPT), bills for RPT of lands within the territories of the component city would also increase.

Due to the City Government's thrust to remain "business-friendly" FMVs of industrial and commercial lands would remain the same.

"There would always be resistance to changes, but the Provincial Board thought it's about time we update the land valuation to enable the City Government to collect additional revenues and deliver the much needed basic services," Patio said.

Jose de Leon, city assessor, said the last time FMV in the city was increased was in 1996 when Provincial Board Ordinance 17, which was approved in 1994, took effect.

The succeeding revision of FMVs, if approved this year, would still be considered a long wait since the Local Government Code of 1991 allows local government units (LGUs) to update the land valuation in their respective jurisdictions once every three years.

The 1996 valuations were retained in 1999 to help the municipality bounce back from lahar devastation.

Three years later in 2001, the town was converted into a component city and a six-year moratorium on any tax increase was implemented.

In July 2007, however, the city officials in Legislative-Executive Development Advisory Council (Ledac) passed a resolution, which includes among other plans, the conduct of a general revision of real property assessments and classifications in 2008.

De Leon said the revision of FMVs is timely considering the following factors: present economic conditions; the needs of the city government to maintain its continuous progress; valuations being used by the different banks in the city and as well as licensed real estate brokers in the locality; the recommended zonal values as agreed by the different stakeholders of the city; and the Bureau of Internal Revenue (BIR) zonal valuation.

At a maximum of 70 percent increase in the land valuation, the proposal is still lower compared to the recent zonal valuations proposed by the BIR, which were adamantly opposed businessmen in Pampanga and values proposed by realtors.

Under the proposed valuation, residential lots in first class subdivisions will have an FMV of P950 per square-meter from the present value of P710 per square meter.

This will still be much lower compared to the BIR unit valuation of P1,500 and realtors' proposal of P1,200 per square meter.

To get the tax base or RPT due for a residential lot without building, the total area of the land is multiplied by the FMV, then by the assessment level of 20 percent, then again by one percent.

The final amount will be multiplied by two. Half of which will go to the General Fund, and the other half to the Special Education Fund (SEF).

Thus, a 400 square meter lot in a first class subdivision will be charged P1,136 as its RPT bill for the year.

Myrna Tapnio, vice president of the Federation of Homeowners Association (Fedhoa), said subdivision property owners are supporting the proposed ordinance.

She believed that the taxes being generated from the RPT are coursed back to the residents via services like infrastructures and other assistance.

Records obtained from the City Treasurer's Office here revealed that of the total income of P526 million the city had in 2007, more than P41 million was from net share -- after the deduction for the share of source barangays and SEF -- of the city from RPT taxes collected from the whole year.
(January 12, 2008 issue) – Sun Star Pampanga

Post a Comment