‘Private road lots should be tax-exempt’

File photo
File photo

THE owners of some privately-owned road lots used for public purposes should be exempted from paying real property tax, the sponsor of the 2023 Real Property Tax Code said Thursday, Oct. 19, 2023.

Noel Eleuterio Wenceslao, chairman of the Cebu City committee on budget and finance, revealed this to SunStar Cebu after saying that one provision in the 2023 Revised Real Property Tax Code for the Taxing Jurisdiction of the City of Cebu involves the withdrawal of tax exemptions, as discussed during the second public hearing on the measure Thursday.

“Naay uban nga tax exempted sauna, but karon gi withdraw na nato. But we have also to account kay naa may mga question niana,” Wenceslao said.

(There were some that were tax exempt in the past, but we will now withdraw this exemption. But we also have to account for that because there are questions on that.)

Wenceslao said the City Council needs to consider which properties should be exempted.

Ayala lots

Wenceslao used the Ayala road lots as an example.

He said the road lots in Ayala have not yet been donated to the City Government; however, they are being used as public roads.

“Normally, para nako, they should be exempted because ila ang dan, unya gamiton sa publiko,” Wenceslao said.

(Normally, for me, they should be exempted because the road is theirs but the public is using it.)

He said making Ayala pay real property tax for publicly-used road lots would be unfair.

“They should be exempted from paying real property tax and all that are privately-owned road lots that are used for the public,” Wenceslao said.

The Cebu IT Park in Barangay Apas and Cebu Business Park in Barangay Hipodromo, which hosts the Ayala Center Cebu mall, were developed by units of Ayala Land Inc.

Wenceslao said he does not know whether the Cebu IT Park and Cebu Business Park are currently exempted from paying real property tax.

To be exempted

Under Article IV, Section 15 of the proposed 2023 Real Property Tax Code of the City of Cebu, only the following properties would be exempted from payment of real property tax:

1. All real property that are owned by the Republic of the Philippines or any of its political subdivisions, except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person;

2. All charitable institutions, churches, personages, or convents appurtenant thereto including mosques, non-profit or religious cemeteries, and all lands, buildings, and improvements which are actually, directly, and exclusively used for religious, charitable or educational purposes;

3.All machinery and equipment actually, directly and exclusively used by local water districts and government-owned and -controlled corporations engaged in the supply and distribution of water and/or generation and transmission of electric power, and

4. All real property owned by duly registered cooperatives as provided under RA 6938; and

5. All machinery and equipment exclusively used for pollution control and environmental protection.

Section 16 of the code says that all other exemptions from payment of real property tax (RPT) previously granted to individuals, companies and government entities would be withdrawn.

Wenceslao did not say which types of individuals, corporations or other entities currently paying RPT would lose their tax exemption.

Fair market value

He also clarified that the rate of real property tax may vary and does not have a uniform increase, as different properties may have varying fair market values (FMV).

The fair market value is used to compute the RPT.

He said the impact on the RPT is significant due to the fact that the City has not revised the RPT code for nearly 20 years.

“The law indicates that if there is a revision, it should be based on the present fair market value,” Wenceslao said.

He said once the FMV is set higher, the RPT will also increase.

“The only thing we increased is the fair market value,” Wenceslao said.

However, with big properties like Cebu IT Park in Barangay Apas, the increase in FMV will also make a huge difference in the RPT.

In 2006, he said, the area where Cebu IT Park is now located had a fair market value of P6,000 per square meter.

But now, in the revised RPT code, its FMV will soar to P200,000 per square meter because it is now a highly commercialized area.

Previously, SunStar also reported that a portion of Cebu Business Park under the jurisdiction of Barangay Hipodromo (Lot numbers 2, 1 to 4 to 22 Visayas Ave.) would see its fair market value shoot up to P245,000 from P16,300 per square meter.

For land, the RPT due is computed by multiplying the FMV by the number of square meters of the land, and then by the assessment level to get the assessment value, which is then multiplied by the tax rate.


Wenceslao said they will review the proposed FMVs to ensure that the established amounts are justifiable.

During the hearing, property owners requested the option to pay the increase on a “staggered basis.” Wenceslao expressed their willingness to study and evaluate this.

“We also need to consult with other councilors and executive departments; we will create a bicameral committee,” Wenceslao said.

The first public hearing on the measure was held last Friday, Oct. 13.

With the conclusion of the second public hearing, the ordinance will now proceed to a special public forum involving property owners and stakeholders.


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