Power to levy and Collect Real Property Tax
Provinces, cities, and municipalities within the Metropolitan Manila Area have the power to levy and collect real property tax. This power is, of course, confined within their respective territorial jurisdictions. In the event that a boundary dispute arises between 2 local government units, which local government unit has the authority to collect the tax during the pendency of the boundary dispute case?
The Local Government Unit Entitled To Collect Real Property Taxes
The Supreme Court has been consistent in holding that the authority to collect real property taxes lies with the local government unit where the real property is located.
Sta. Lucia v. City of Pasig
Sta. Lucia v. City of Pasig (G.R. No. 166838), citing Secs. 5 and 57 of the Presidential Decree No. 464 (Real Property Tax Code) and Secs. 201 and 233 of Republic Act No. 7160 (Local Government Code of 1991), states:
The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction, it is imperative to first show that these properties are unquestionably within its geographical boundaries.
Municipality of Cainta v. City of Pasig
Municipality of Cainta v. City of Pasig (G.R. No. 176703), declares, thus:
For real property taxes, Presidential Decree (PD) 464 or the Real Property Tax Code provides that collection is vested in the locality where the property is situated. This is affirmed by Sections 201 and 247 of the Local Government Code.
Municipality of Cainta v. Sps. Braña
Municipality of Cainta v. Sps. Braña (G.R. No. 199290), making reference to Secs. 5 ad 57 of P.D. 464 and Secs. 201 and 247, holds:
The import of these provisions show that the local government unit where the property is situated has the right to collect taxes therefrom. Thus, to determine who has the right to collect taxes x x x x x, it is necessary to determine the location of the property.
Location of the Real property
It is, therefore, imperative to determine the location of the property in order to identify who between the local government units involved has the authority to collect real property tax during the pendency of the boundary dispute case. Considering that the boundary dispute concerns the very location of the subject property, how is the location of the property determined ? In this regard, the Supreme Court has taken different views.
Sta. Lucia v. City of Pasig rules that the court where the petition for the settlement of boundary dispute is pending is the proper body to resolve the matter. It staes:
Although it is true that “Pasig” is the locality stated in the TCTs of the subject properties, both Sta. Lucia and Cainta aver that the metes and bounds of the subject properties, as they are described in the TCTs, reveal that they are within Cainta’s boundaries. This only means that there may be a conflict between the location as stated and the location as technically described in the TCTs. Mere reliance therefore on the face of the TCTs will not suffice as they can only be conclusive evidence of the subject properties’ locations if both the stated and described locations point to the same area.
The Antipolo RTC, wherein the boundary dispute case between Pasig and Cainta is pending, would be able to best determine once and for all the precise metes and bounds of both Pasig’s and Cainta’s respective territorial jurisdictions. The resolution of this dispute would necessarily ascertain the extent and reach of each local government’s authority, a prerequisite in the proper exercise of their powers, one of which is the power of taxation.
Municipality of Cainta v. City of Pasig, however, turns around from Sta. Lucia v. City of Pasig and declares that the location stated in the certificate of title should be followed until amended through proper judicial proceedings. It stresses:
X x x x x the land registration court, in confirming the applicant’s title, necessarily passes upon the technical description of the land and consequently its location, based on proof submitted by the applicant and reports by the Commissioner of Land Registration and Director of Lands. There is thus basis to presume correct the location stated in the Certificate of Title and to rely thereon for purposes of determining the situs of local taxation, until it is cancelled or amended.
Said reliance is further demanded by Section 31 of the PRD when it mandated that a decree of registration, which necessarily includes the registered location of the land, is conclusive upon all persons, including the National Government and all branches thereof. In Odsique v. Court of Appeals, the Supreme Court held that a certificate of title is conclusive not only of ownership of the land but also its location.
Without the adjudication of the RTC-Antipolo finally determining the precise territorial jurisdiction of these local government units (LGU), these documents alone cannot automatically effect a modification or amendment to the stated location in the TCTs for the purpose of exacting tax compliance, as the taxpayer is entitled to rely on the location clearly reflected in the certificate of title covering the properties. To hold otherwise would subject taxpayers to the vagaries of boundary disputes, to their prejudice and inconvenience and to the detriment of proper tax administration. Such scenario is contrary to the canons of a sound tax system. Administrative feasibility is one of the canons of a sound tax system. It simply means that the tax system should be capable of being effectively administered and enforced with the least inconvenience to the taxpayer.
Municipality of Cainta v. Sps. Braña reverts back to the view held by the Supreme Court in Sta. Lucia v. City of Pasig, thus:
X x x x x However, this Court cannot make any definitive ruling on the location of the property due to the pending boundary dispute case between the City of Pasig and the Municipality of Cainta.
However, this Court cannot make any definitive ruling on the location of the property due to the pending boundary dispute case between the City of Pasig and the Municipality of Cainta.
While it is true that Pasig is the location indicated in the TCTs, the Municipality of Cainta have long assessed the same for tax purposes and Sps. Braña were paying the real estate taxes to the Municipality of Cainta. It was only in 1997 that the City of Pasig assessed the properties for real estate tax purposes. Thus, while the TCTs state that the location is in Pasig, the same cannot be relied in this case because the location of the property is precisely in dispute. The RTC of Antipolo, which has jurisdiction over the boundary dispute case, would be the best forum to determine the precise metes and bounds of the City of Pasig’s and the Municipality of Cainta’s respective territorial jurisdiction, as well as the extent of each local government unit’s authority, such as its power to assess and collect real estate taxes.