PROPERTY owners in Lapu-Lapu City must brace themselves for an increase in real property taxes as the City Government has proposed to adjust the assessment of the real properties in the city through an adjustment in the schedule of fair market values, in order to finance various city activities, projects and programs needed due to the city’s rapid development and population growth.
A public hearing for the proposed ordinance to amend specific sections of City Ordinance 14-051-2017 is scheduled for 1 p.m. Tuesday, Dec. 12, 2023 at the Lapu-Lapu City Session Hall.
The report of the Sangguniang Panlungsod’s Committee of the Whole on the proposed amendment of CO 14-051-2017, dated Aug. 2, 2023, indicates that among the proposed amendments of the City Assessors’ Office was for residential, subdivision and beach lots to have increases in market values ranging “from 16.85 percent to 780 percent.”
However, the committee raised the need to “find a balance between the need to enhance revenue generation and ensuring that the increase in the property taxes will not prove burdensome to our constituents.”
Thus, the committee recommended that the proposed increases not exceed 50 percent of the old rates for residential, subdivision and beach lots, while they should also not exceed 75 percent of the old rates for agricultural, commercial, industrial and special lots.
Sample data provided to SunStar Cebu by Lapu-Lapu City Councilor Annabeth Cuizon on Thursday, Dec. 7, showed that the current values per square meter for residential lots, of which there are 10 sub-classifications, range from P125 for the lowest sub-classification (SC-10), to P4,450 for the highest (SC-1).
The proposed new values for these residential lots would now range from P200 to P5,200.
Cuizon did not provide the current values for the subdivision and beach lot classifications. But under the proposal, the new base unit market values would now range from P4,400 to P9,800 per square meter for subdivision land, and P600 to P25,000 per square meter for beach lots.
The principal authors of the proposed amendments are Cuizon and City Councilor Linda Susan Baring.
Cuizon said the last time fair market values had been amended in the city was in 2017.
Cuizon said the formula for deriving the total tax due of real property owners starts with determining the market value of the property.
The fair market value of a property will be multiplied by the land area, resulting in the market value. Then this will be multiplied by the assessment level, which Cuizon said remains the same.
This will then generate the assessed value of the property, which will be multiplied by the 2.5 percent tax rate, and the result is the total tax due.
“For the increase in schedule of market values, we have personnel from the Assessors Office who analyzed sales data, reviewed market values of similar LGUs (local government units) and other pertinent information,” Cuizon said.
She provided this sample computation: For a 100-square-meter industrial lot under Sub-Classification 1, the fair market value of P16,200 is multiplied by 100 square meters to get the market value, which is then multiplied by the assessment level of eight percent to get the assessed value of the property. This assessed value is then multiplied by the 2.5 percent tax rate to arrive at the total tax due of P3,240.
The proposed ordinance seeks to amend Letter B, Section 22 of Title III and Title IV of CO 14-051-2017 that deal with the assessment levels and fair market values of lands, buildings and other structures, respectively.
The proposed changes in Section 22 of Title III pertain to the assessment levels for machinery, which will now be at 50 percent for residential, 40 percent for agricultural, and 80 percent for both commercial and industrial. These were adopted by the Committee of the Whole for inclusion.
The committee also approved the adoption of the proposed changes in Title IV or the Schedule of Fair Market Values, including the new fair market values for lands, cost of construction-on structures and improvements; cost of construction of communication towers with perimeter fence, gate and ramp or pavement improvements; as well as trees; extra items as component parts of structures (such as garages, porches, balconies, basements and terraces); and the schedule of depreciation for structures and other improvements.
The proposed new fair market values range from P200 to P300 per square meter (sqm) for agricultural lots, P500 to P16,200/sqm for commercial and industrial lots, and P2,200 to P16,200/sqm for special lots.
For structures and improvements, the new schedule of the base unit cost for one- to five-story buildings, depending on the materials used and type, ranges from P451 for structures made of light materials with bare to basic finish, to P28,000 for structures made of reinforced concrete and/or steel materials with luxurious finish.
For six- to 10-story buildings, the fair market value goes from P18,001 to P38,000 per unit, while for 11-storey structures and above, the value goes as high as P40,000 per unit.
Pools and trees
Other structures such as sawmills, sheds, warehouse, bodega, storage, hangars, silos, and the like have a proposed fair market value of P501 to P 20,000 per unit, while structures like churches, theaters, movie houses, coliseums, sports complex and gymnasiums have fair market values of P10,001 to P25,000 per unit. For swimming pools, the fair market values range from P19,501 to P30,000.
For the base unit cost of construction of communication towers with perimeter fence, gate and ramp or pavement improvements, the values range from P11,100 to P30,000 depending on the height and the number of legs of the tower.
For the proposed values of trees, they ranged from P200 to P1,960 per tree depending on the size and kind of tree. (with CTL)