The Quezon City Council on Tuesday passed on third and final reading Proposed Ordinance No. 20CC-141, which seeks to raise the fair market values of lands, buildings and other structures in the city that haven’t been adjusted in 21 years.
Quezon City Mayor Herbert Bautista is expected to sign the ordinance into law this week, and the Office of the City Assessor has said it will be effective by January 2017. Its last fair market value adjustment happened in December 1995.
Residents are thus bracing for tax increases from 39 up to 131 percent on their properties, based on a summary of the planned changes under the ordinance that shows it will increase fair market values of residential, commercial and industrial properties by 400 to 733.33 percent.
District 3 Councilor Allan Benedict Reyes also said the council passed Ordinances No. 20CC-175 and 20CC-176, granting real-estate property discounts to senior citizens and solo parents, respectively.
“The 18th Regular Session of the Quezon City Council passed the three measures without amendments or omission, except for a few typographical errors,” Reyes told the Manila Standard.
Copies of the approved ordinances shall be forwarded “by Friday” to the office of Vice Mayor Joy Belmonte for her signature and certification, he said.
“Hopefully, Mayor Herbert Bautista will not veto them,” Reyes said, adding he is confident of the mayor’s support “because the taxes to be derived from the fair market value adjustment can be translated into more public services.”
“After the mayor has signed the measures, there will be a publication of these for three consecutive weeks, then implementation will follow in January 2017,” added Reyes, chairman of the council’s Ways and Means committee and one of the ordinance’s authors.
While councilors and Belmonte, who presides over the council, have promised the ordinance would not lead to taxes rising by as much as 500 percent, the sizable tax hike stemming from the proposal has led some affected sectors to oppose it.
The city government plans to use the additional funds raised from the taxes to bolster Quezon City’s general fund, its barangays, and to a special education fund.
Some homeowner groups, however, argue that Quezon City does not need the additional tax collections since it has a budget surplus. Businesses, led by mall operator SM, the Philippine Retailers Association and the Association of Filipino Franchisers Inc., also said they would have to pass the additional tax cost to customers.
City Assessor Rodolfo Ordanes said the city expects to collect P700 million more in the first year of the law’s implementation. Quezon City saw P3.796 billion in real property taxes in 2015, its second biggest source of income after business taxes, per data from the city treasurer’s office.
Belmonte had said the 38-member council is bent on fast-tracking the approval of the proposed ordinance, which Quezon City needed to do after the Commission on Audit wrote Mayor Bautista in October asking why the city did not heed Republic Act 7160.
Known as the Local Government Code of 1991, RA 7160 requires local governments to adjust real property values every three years.
Belmonte, several city councilors, Ordanes and assistant city assessor for operation Sherry Gonzalvo, promised to mitigate the impact of the adjustment of property values on those paying real-property taxes.
Ordanes and Gonzalvo assured there would be no 500-percent increase on real-property taxes if Ordinance No. 20CC-14 is passed.
“We are taxing assessed value at 5 percent only,” Gonzalvo said. “What is subject to tax is not the market value, but the assessed value. We get the assessed value by multiplying the market value by 5 percent (assessment value),” she told the Manila Standard.
Ordanes said while the fair market value would increase up to 500 percent, “we have lowered the current tax assessment level of 18 percent to 5 percent for residential properties.”