A scheduled real property tax increase in Baguio could be delayed after the City Council passed a resolution asking Mayor Benjamin Magalong to not implement it as planned. Local officials have said raising real property taxes this year would add to the burden owners currently face and create potential issues for those who rent homes as well.
Increase of the tax, which is based on fair market value, is laid out under the Schedule of Market Values for Land in the City of Baguio. It covers all types of real estate, including commercial and residential. With the economy still recovering in the aftermath of COVID-19, the City Council believes now is not the time for the tax hike.
They noted that property owners would have to carry this additional burden. In the case of those owning rental homes or places like hotels, any tax increase would likely be passed on to the end user.
Lawyer Christine Angelica Elveña told the Manila Bulletin that the fair market value of residential property could increase by as much as 2,300 percent. For commercial property, the maximum raise was 4,778 percent. These would have a significant impact on the scheduled real property tax increase.
Keep Reading: Paying property taxes goes digital in Mandaluyong City
Metro Manila could revise property valuations to better assess real property tax
While Baguio looks to delay the planned real property tax increase, the Department of Finance is looking to bring Metro Manila property valuations in line with current market values in order to more accurately calculate real property taxes. It is believed the government is losing out on significant tax revenue due to undervalued land in prime locations across the city.
“The current valuation for real property tax purposes of land is outdated and very low as compared to real market value,” Department of Finance Secretary Carlos Dominguez was quoted as saying by The Manila Times. “We are losing tens of billions of pesos because that kind of wealth is not being taxed correctly.”
