QC Council keen on suspending fair market value ordinance for 2 years
Published Oct 28, 2018 09:22 pm
By Chito Chavez
The Quezon City Council is keen on suspending the implementation of the fair market value adjustment for two years in the city even if it will enrich the city’s coffers by P300 million in the first year of its supposed effectivity.
Quezon City Hall (Commons Wikipedia/Manila Bulletin)
Majority Floor Leader Franz Pumaren said the Sangguniang Panlungsod (SP or City Council) decided against its full implementation right away primarily due to the soaring inflation rate the country is reeling from.
The adjustment in fair market value (FMV), according to Ordinance No. SP-2556, S-2016, is expected to increase the real property tax (RPT) to be paid by property owners in Quezon City.
However, Pumaren cited the effect of the Tax Reform for Acceleration and Inclusion (TRAIN) law on the increase of prices of commodities which pushed the inflation rate to a nine-year high of 6.4 percent in August 2018 as the primary reason for the proposed suspension.
“It is not only proper but likewise imperative to suspend the collection based on the updated schedule of fair market values,” Pumaren said, highlighting text from the proposal mandating the two-year suspension.
Pumaren added that the P300-million increase in revenue is only the expected uptake from the first year.
He noted when the city implements the ordinance in its second year to include updates in FMVs on improvements, the additional revenue is estimated to be around P700 million.
“All these additional revenues will of course go to services for the people, but we have to take into account the short-term consequence and that will be the additional burden on top of rising costs of basic goods,” Pumaren pointed out.
The council reiterated that Ordinance No. SP-2556 has measures already put in place to mitigate the impact of the adjustment in fair market values upon implementation.
“The original proposal of our assessor was to have an assessment level of 18 percent pero binaba naming ito to 5 percent (but we decreased it to 5 percent). So if you look at the other cities, kahit na nag-increase kami ng property values noong 2016 (even if increased the property value in 2016), we will still be the cheapest in terms of property taxes in Metro Manila,” Pumaren added.
Originally approved in 2016, the said ordinance was put on hold due to a Temporary Restraining Order (TRO) issued by the Supreme Court (SC), following a petition filed by the Alliance of Quezon City Homeowner’s Association, Inc. (AQCHI) questioning the legality of the ordinance.
The TRO was lifted by the SC on Sept. 18, 2018 and ruled in favor of the city government.
Based on directives from the Department of the Interior and Local Government (DILG), the Department of Finance (DOF), and the Commission on Audit (COA), the 2016 ordinance was set to initiate the revision of the outdated FMVs of lands and basic unit construction cost for buildings and other structures.
With the proposed delay of two years in implementing the ordinance, collection of real property taxes for the years 2018-2019 will still be based on the 1996 Schedule of Fair Market Values.
Quezon City Hall (Commons Wikipedia/Manila Bulletin)
Majority Floor Leader Franz Pumaren said the Sangguniang Panlungsod (SP or City Council) decided against its full implementation right away primarily due to the soaring inflation rate the country is reeling from.
The adjustment in fair market value (FMV), according to Ordinance No. SP-2556, S-2016, is expected to increase the real property tax (RPT) to be paid by property owners in Quezon City.
However, Pumaren cited the effect of the Tax Reform for Acceleration and Inclusion (TRAIN) law on the increase of prices of commodities which pushed the inflation rate to a nine-year high of 6.4 percent in August 2018 as the primary reason for the proposed suspension.
“It is not only proper but likewise imperative to suspend the collection based on the updated schedule of fair market values,” Pumaren said, highlighting text from the proposal mandating the two-year suspension.
Pumaren added that the P300-million increase in revenue is only the expected uptake from the first year.
He noted when the city implements the ordinance in its second year to include updates in FMVs on improvements, the additional revenue is estimated to be around P700 million.
“All these additional revenues will of course go to services for the people, but we have to take into account the short-term consequence and that will be the additional burden on top of rising costs of basic goods,” Pumaren pointed out.
The council reiterated that Ordinance No. SP-2556 has measures already put in place to mitigate the impact of the adjustment in fair market values upon implementation.
“The original proposal of our assessor was to have an assessment level of 18 percent pero binaba naming ito to 5 percent (but we decreased it to 5 percent). So if you look at the other cities, kahit na nag-increase kami ng property values noong 2016 (even if increased the property value in 2016), we will still be the cheapest in terms of property taxes in Metro Manila,” Pumaren added.
Originally approved in 2016, the said ordinance was put on hold due to a Temporary Restraining Order (TRO) issued by the Supreme Court (SC), following a petition filed by the Alliance of Quezon City Homeowner’s Association, Inc. (AQCHI) questioning the legality of the ordinance.
The TRO was lifted by the SC on Sept. 18, 2018 and ruled in favor of the city government.
Based on directives from the Department of the Interior and Local Government (DILG), the Department of Finance (DOF), and the Commission on Audit (COA), the 2016 ordinance was set to initiate the revision of the outdated FMVs of lands and basic unit construction cost for buildings and other structures.
With the proposed delay of two years in implementing the ordinance, collection of real property taxes for the years 2018-2019 will still be based on the 1996 Schedule of Fair Market Values.