Republic of the Philippines

CENTRAL BOARD OF ASSESSMENT APPEALS Manila

MILA N. BUSCAR,

Petitioner-Appellant,

– versus –

CBAA CASE NO. V-07 LOCAL BOARD OF ASSESSMENT

APPEALS OF THE ILOILO,

PROVINCE OF

Appellee,

– and –

PROVINCIAL ASSSESSOR OF ILOILO, Respondent-Appellee.
x – – – – – – – – – – – – – – – – – – – – – – – – – – – x

DECISION

This is an appeal from the Decision rendered by the Appellee Local

Board on August 19, 1994, the dispositive portion of which reads as follows:

“PREMISES CONSIDERED, the aforementioned re-assessment of the properties as agricultural lands, portion of which are residential, the assessment of the building and commercial lot being in consonance with schedule of market value as approved by the Sangguniang Panlalawigan of the province of Iloilo under Provincial Tax Ordinance No. 93-002, and justified per report, Annex “C”, the re-assessment is hereby affirmed. The appeal relating to change in classification of the parcels of land from commercial to residential is hereby dismissed.”

In her Notice of Appeal, filed with this Board on September 8, 1994,

Petitioner-Appellant alleged that she received a copy of the Local Board’s

Decision on September 6, 1994. In her appeal, filed with this Board on October

6, 1994, Petitioner-Appellant made an assignment of errors, which we quote:

“I. The Local Board erred in affirming the reassessment made on:

“a. House on Cadastral Lot #20 covered by Tax Dec. #2337, per report marked as Annex “A”.

“b. Cad. Lot #4010 under TCT #84028 Agricultural Land with residential portion, with Tax Dec. #0182 marked as Annex “C”.

“c. Cad. Lot #4051-B under TCT No. T._______ Agricultural Land covered by Tax Dec. No. 0220 marked as Annex “C”.

“II. The Local Board of Assessment Appeals erred in dismissing the request to re-classify Commercial Lot No. 20 covered by TCT No. 17421 under Tax Dec. #2336.

Reference: Book IX, pp. 60-77

“III. The Local Board of Assessment Appeals erred in ignoring other appeals dated 3/21/1994.”

Petitioner-Appellant states that, as far as Error No. I-a is concerned, the

Appellee Board “failed to consider the fact that some of the entries leading to

the total reassessed market value of the land are not in the schedule of market

values under Provincial Tax Ordinance No. 93-002 as approved by the

Sangguniang Panlalawigan.” For Error No. I-b, Petitioner-Appellant alleges that,

in effect, the Local Board failed to consider Petitioner-Appellant’s own

computations for Lot No. 4010. For Error No. I-c, Petitioner-Appellant says that

the area classified as sugarland in Lot No. 4051-B should be under Class 3,

instead of Class 2, since Lot No. 4051-B is adjacent to Lot No. 4010, the

sugarland area of which is under Class 3.

For Error No. II, Petitioner-Appellant maintains that Lot No. 20, being

actually used as residential, should be classified as such, instead of

commercial.

The historical assessments of Lot No. 20, subject of Assignment of Error

No. II, follows:

T.D. Classification No.

2233 Res. 2336 Com. 2369 Com.

Effectivity

1990 1994 1995

Market Value

P163,800.00 P176,220.00

Assess. Level

50% 20%

Assessed Value

P13,950.00 P81,900.00 P35,240.00

Tax Declaration No. 2336, effective 1994, placed the location of Lot No.

20 at the corner of Crispin Salazar Street and Concepcion Street, while under

Tax Declaration No. 2369, effective 1995, its location is at the corner of Crispin

Salazar Street and Domitilo Abordo Street in Janiuay, Iloilo. Perhaps,

“Concepcion Street” may have been renamed to “Domitilo Street”.

At the hearing of this case on August 31, 1995, Respondent-Appellee

presented a copy of the Urban Zoning Map for the years 1990 to 2000 of the

Municipality of Janiuay, together with a copy of the Comprehensive Zoning

Ordinance (Ordinance No. 1, Series of 1991) of the Municipality of Janiuay,

Reference: Book IX, pp. 60-77

which was approved by the Sangguniang Bayan of Janiuay on September 17,

1991 per Resolution No. 446, Series of 1991, and formally adopted by the

same Sangguniang Bayan on June 30, 1992. In accordance with the said

zoning map and ordinance, the property in question is located within the area

which is classified as Commercial Zone C-2 (Commercial-2). Thus Article V,

Section 3-B of the said ordinance states:

“B – COMMERCIAL ZONES

“x x x

“C – 2 A strip of 40-m. deep along Crispin Salazar St. from corner of Concepcion St. going towards the corner of Don Tiburcio Lutero St. up to corner of Capt. Tirador St. along Don Tiburcio Street.”

Contrary to the above, both Tax Declaration Nos. 2336 (1994) and 2369

(1995) classified the lot as Commercial-1 (C-1) with a unit value of P360.00 per

square meter. However, Provincial Tax Ordinance No. 93-002 (approved by the

Sangguniang Panlalawigan of Iloilo on March 10, 1993 per Resolution No. 93-

059 to take effect on January 1, 1994) fixes, under Section 2 thereof, the

market value for commercial lands classified as C-1 in Janiuay at P360.00 per

square meter. There are no provisions for market values of commercial lands in

Janiuay under other classifications.

There appears to be a mathematical error in the computation of the

market value of Lot No. 20 for 1994. Tax Declaration No. 2336 states the area

of the lot was 445 square meters and the market value was P360 per square

meter. Therefore, the total market value should have been only P160,200.00,

instead of P163,800.00, or an overvaluation of P3,600.00. The market value for

1995 was also at P360.00 per square meter, or a total of P160,200.00, plus

10% thereof for corner influence.

Petitioner-Appellant’s letter-request dated February 17, 1994 to reclassify

Lot No. 20 from Commercial to Residential was received by the Respondent-

Appellee on February 18, 1994.

Reference: Book IX, pp. 60-77

The real property tax for 1994 was paid under protest per Official Receipt

No. 1205952-Q, dated March 30, 1994, (Exh. “A-1”).

Petitioner-Appellant insists that, since the lot is actually used for

residential purposes, the same shall be classified, valued and assessed as

residential, in accordance with Section 217 of R.A. 7160, otherwise known as

Local Government Code of 1991, which we quote:

“SEC. 217. Actual Use of Property as Basis for Assessment. – Real property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns its, and whoever uses it.”

Since the assessment in question was made in July of 1993, the law

applicable thereto is aforementioned Section 217 of R.A. 7160.

This Board, through its Hearing Officer, conducted an ocular inspection of

the subject parcel of land on January 25, 1995, in the presence of Mr. and Mrs.

Luis Buscar, the Respondent-Appellee and some personnel of the offices of the

Local Board, Provincial Engineer, Provincial Assessor, and Municipla Assessor

of Janiuay, all of the province of Iloilo.

There was no question that the subject lot was situated within the area

classified as Commercial Zone 2. Therefore, this lot should be classified and

valued as “Commercial” in accordance with Article VIII (C) of Assessment

Regulations No. 8-75, dated June 16, 1975, implementing P.D. 464, and/or with

Section 11(B) of Local Regulations No. 1-92, dated October 6, 1992,

implementing R.A. 7160, both of which provisions are identical, thus:

“In an area of mixed land uses, such as residential with commercial or industrial, the predominant use of the lands in that area shall govern the classification, valuation and assessment thereof. If the predominant use is residential, all lands in that area shall be classified, valued and assessed as residential; if the predominant use is commercial or industrial, all lands in that area shall be classified, valued and assessed as such.”

The assessment level, however, for the said parcel of land, for the year

1994, should only be thirty percent (30%), instead of fifty percent (50%) as used

in Tax Declaration No. 2336, pursuant to the provisions of Article VIII(B) of

Assessment Regulations No. 8-75, supra, and/or Section 11(C) of Assessment

Reference: Book IX, pp. 60-77

Regulations No. 1-92, supra. Article VIII(B) of Assessment Regulations No. 8-

75 states:

“B. However, a lot or parcel of land classified and valued as commercial or industrial according to the schedule of base market values but occupied by a building or buildings principally or predominantly used for residential purposes shall be assessed as residential at 30% of its market value determined on the basis of that scheduled.”

Section 11(C) of Assessment Regulations No. 1-92 provides that:

“C. A lot or parcel of land classified and valued as commercial or industrial occupied by a building used both for residential and commercial or industrial purposes shall be assessed on the basis of the predominant use of the building. If residential, the assessment level fixed thereon for residential land shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values; if industrial or commercial, the assessment level for industrial or commercial shall be applied on the market value of the lot or parcel determined on the basis of the schedule of base market values.”

Even before the effectivity of P.D. 464 and its implementing Assessment

Regulations No. 8-75, the policy on the assessment level of lands classified and

valued as commercial or industrial, but occupied by a building predominantly

used for residential purposes, had always been the same. Thus, in the case of

City Assessor of Manila vs. BAA of Manila & Leonardo H. Guison, CBAA Case

No. 82, this Board said:

“Records show that the subject land is located in a commercial area and that the bigger portion of the building built thereon is devoted to residential use. Pursuant to Department Order No. 3-74 of the Department of Finance implementing PD 76 we find that the actual use of the land is, although located in a commercial area, predominantly or principally residential. The rule on this point does not intend to produce a split categorization of the real property (Nos. 4-6, Department Order No. 3-74, supra.) The assessment level of residential land shall be applied to its market value arrived at in accordance with the schedule of market values for commercial lands.

“Consequently, x x x 30% assessment level for residential lands shall be applied to the market value of the land x x x.”

The residential building (subject of Assignment of Error No. I-a) on Lot

No. 20 was supposed to have been rendered habitable in the year 1984. The

real property taxes for 1991 through 1994 was paid under protest as shown by

Official Receipt No. 1205951-1, dated March 30, 1994 (Exh.”A”). The

assessments of said building from 1985 to 1994 were as follows:

T.D. Classi-No. fication 2117 Res. 2334 Res.

Effecti vity
1985 1990

Market Value
P327,380.00 P327,380.00

Assess. Level
65% 65%

Assessed Value
P212,800.00 P212,800.00

Reference: Book IX, pp. 60-77

2337 Res. 1994 P650,920.00 25% P162,730.00

Attached to the Local Board’s decision dated August 19, 1994 as Annex

“A” is a report of “Findings Of Ocular Inspection Conducted on March 10-11,

1994” on the subject buildings, together with a sketch of the building and other

improvements, and computations of areas and values.

During the ocular inspection of January 25, 1995, this Board found the

abovementioned report to be substantially correct, except that the flooring of

the hallway leading to the bedroom were not wood tile-finished as reported, but

made of ordinary wood lumber. However, the discrepancy is not significant

enough as to affect the overall value reported. The unit market values used

were in accordance with the figures mandated under Provincial Tax Ordinance

No. 93-002. The adjusted total market value is net of an allowance for

depreciation of twenty percent (20%). The assessment level of 25% is likewise

in accordance with the said Provincial Tax Ordinance. There is no valid reason,

therefore, to disturb the assessment of the said residential building.

Lot Nos. 4010 and 4051-B, subject of Assignment of Error Nos. I-b and I-

c, respectively, were assessed for 1994 and 1995, as follows:

LOT NO. 4010

AREA (IN HA) CLASS UNIT VALUES ——————- ————— ——————–
T.D. Nos. 0182 0324 0182 0324 0182 0324 Eff. Yrs. 1994 1995 1994 1995 1994 1995
—————— —————- ——————–Agricultural Land:
Sugar 2.6955 6.0000 3 3 P51,500 P44,300 Rice Un. 2.0000 2.0000 2 2 37,800 37,000 Corn 5.3000 2.0000 2 2 19,390 19,390 Orchard 0.1000 0.1255 2 2 25,790 25,790 Bamboo 0.1790 0.1790 2 2 17,000 17,000 Coconut 0.3000 0.3000 2 2 17,000 17,000
——— ———10.5745 10.6045
Less: 6% Adjustment

Adjusted Market Values Res. Land 0.1000 0.0700 R-4 R-4 P 1,140,000
——— ——–Totals 10.6745 10.6745
———- ———-

MARKET VALUES —————————-
0182 0324 1994 1995
————————————

P138,818.25 P265,800.00 75,600.00 75,600.00
102,767.00 38,780.00 2,579.00 3,236.65 3,043.00 3,043.00 5,310.00 5,310.00
—————– —————-P328,117.25 P391,769.65
19,687.04 23,506.18 —————– —————-P308,430.22 P368,263.47
114,000.00 79,800.00 —————- —————-P422,430.22 P448,063.47 —————- —————-

Improvements: Kind
——————-

CLASS
—————-

UNIT VALUES ——————-

MARKET VALUES
————————————-

Reference: Book IX, pp. 60-77

1994 1995 —— ——

1994 1995 —— ——

1994 1995 —— ——-

Banana Coffee Bamboo Coconut Mango

SUMMARY:

15 20 P 120 P 120 25 80
10 10 300 300 30 30 160 160 1 1,600

Less: 6% Adjustment

Adjusted Market Values

P 1,800.00 0.00
3,000.00 4,800.00 0.00
—————P 9,600.00
576.00 —————P 9,024.00 —————

P 2,400.00 2,000.00 3,000.00 4,800.00 1,600.00
————–P13,800.00
828.00 —————P12,972.00 —————

MARKET VALUES ————————–
1994 1995 —— ——
Agri. Land P308,430 P368,260 Land Imp. 9,020 12,970 Res. Land 114,000 79,800

Totals

ASST. LEVEL ——————1994 1995
—— ——40% 40% 40% 40% 20% 20%

ASSESSED VALUES
—————————————1994 1995
—— ——P123,370.00 P147,300.00
3,610.00 5,190.00 22,800.00 15,960.00
—————- —————-P149,780.00 P168,450.00 —————- —————-

LOT NO. 4051-B

AREA (IN HA) CLASS UNIT VALUES ——————- ————— ——————–
T.D. Nos. 0220 0325 0220 0325 0220 0325 Eff. Yrs. 1994 1995 1994 1995 1994 1995
—————— —————- ——————–Agricultural Land:
Sugar 8.0000 7.6000 2 23 P66,240 P57,000 Rice Un. 1.0000 2.0000 2 2 37,800 37,800 Rice Un. 1.0000 2 16,930
Orchard 0.1700 2 25,790 Bamboo 0.1000 2 17,000 Coconut 0.1000 2 17,700
——— ———10.0000 9.9700
Less: 15% Adjustment

Adjusted Market Values Res. Land 0.0300 R-5 540,000
——— ——–Totals 10.0000 10.0000
———- ———-

MARKET VALUES
—————————–0220 0325 1994 1995
————————————

P529,920.00 P433,200.00 37,800.00 75,600.00 16,930.00 0.00
0.00 4,384.30 0.00 1,700.00 0.00 1,770.00
—————– —————-P584,650.00 P516,654.30
87,697.50 77,498.14 —————– —————-P496,952.50 P439,156.16
0.00 16,200.00 —————- —————-P496,952.50 P455,356.16 —————- —————-

Improvements: Kind
——————-

CLASS
—————-1994 1995
—— ——

UNIT VALUES ——————-
1994 1995 —— ——

MARKET VALUES
————————————-1994 1995
—— ——-

Banana Bamboo Coconut

SUMMARY:

12 P 120 4 300 6 160

Less: 15% Adjustment

Adjusted Market Values

—————

0.00 —————
0.00 —————

P 1,440.00 1,200.00
960.00 ————–P 3,600.00
540.00 —————P 3,060.00 —————

Reference: Book IX, pp. 60-77

Agri. Land Land Imp. Res. Land

Totals

MARKET VALUES ————————–
1994 1995 —— ——
496,950 439,160 3,060
16,200

ASST. LEVEL ——————1994 1995
—— ——40% 40% 40% 40% 20% 20%

ASSESSED VALUES
—————————————1994 1995
—— ——P198,780.00 P175,660.00
1,220.00 3,240.00
—————- —————-P198,780.00 P180,120.00 —————- —————-

Lot No. 4010 is primarily an agricultural land, with residential portions,

situated in Brgy. Dabong, Janiuay, Iloilo. It is bounded on the north by a

provincial road. The sugarland portion of this lot was classified as No. 3 in both

1994 and 1995. But the unit value per hectare for the same portion was

P51,500.00 in 1994 and P44,300.00 in 1995. Provincial Tax Ordinance No. 93-

002, supra, which took effect on January 1, 1994, places the unit market value

of Class 3 sugarland in Janiuay at P44,300.00 per hectare.

Lot No. 4051-B is also an agricultural land with residential portions and is

situated in the same barangay of Dabong, it is about two lots (Lot Nos. 4051-A

and 4038), to the south of the provincial road and about two lots away to the

southeast of Lot No. 4010.

The sugarland portion of Lot No. 4051-B was classified as No. 2 in both

1994 and 1995. But the unit value per hectare for the same portion was

P66,240.00 in 1994 and P57,000.00 in 1995. Provincial Ordinance No. 93-002,

supra, places the unit market value of Class 2 sugarland in Janiuay at

P57,000.00 per hectare.

The real property tax for 1994 on Lot No. 4010 was paid under protest

per Official Receipt No. 1205953-Q dated March 30, 1994 (Exh. “A-2”); and that

on Lot No. 4051-B for the same year was paid under protest per Official Receipt

No. 1205954-Q, dated March 30, 1994 (Annex “A-3”).

As mentioned, Lot No. 4010 is situated along the provincial road, while

Lot 4051-B is two lots away from the same road. Yet the sugarland portion of

Lot No. 4051-B, which has no access to the provincial road, is classified as No.

2, while that for Lot No. 4010, which is along the provincial road, is classified as

Reference: Book IX, pp. 60-77

No. 3 with lower base market value. Petitioner-Appellant argues that the

sugarland portion of Lot No. 4051-B should at least be classified as Class 3, the

same classification as the sugarland portion of Lot 4010.

Respondent-Appellee contended that the classification for the sugarland

portion of Lot No. 4010 was an oversight since all the sugarlands in Brgy.

Dabong were classified as No. 2. In support of his contention, Respondent-

Appellee presented a Sketch Plan of Brgy. Dabong, together with the tax

declarations for some one hundred twelve (112) lots in the area. The tax

declarations show that all the sugarland portions of said lots were classified as

No. 2, except that for Lot No. 4010 which is classified as No. 3. There were no

appeals or petitions for review filed with the Appellee Board concerning the

assessments of the parcels of land in Brgy. Dabong, except the instant appeal.

Petitioner-Appellant states that the Rice-Unirrigated portion of Lot No.

4010 should have been classified as Class 3, instead of Class 2, since the

Riceland is not productive and that the residential portion of Lot No. 4010

should have been classified as Class R-5, instead of R-4, since the houses on

residential portion of Lot No. 4010 are worse than those on the residential

portion of Lot No. 4051-B which is classified as R-5.

Petitioner-Appellant may have been correct in her appreciation of the

condition of the Riceland at the time she inspected the same land, if indeed she

did inspect. But this is beside the point. There is not even an allegation on her

part, much less, proof, that the land is not suitable for rice, or that its

productivity is less than that of the Riceland classified as Class 2.

On the matter of the residential portions of Lot Nos. 4010 and 4051-B, it

is but proper that the residential portion of Lot No. 4010 should have a higher

classification and, consequently a higher valuation, that that of Lot No. 4051-B

since Lot No. 4010 is along the provincial road while Lot No. 4051-B is in the

interior. While it may be true that the condition of the houses on Lot No. 4010

are worse than that of the houses on Lot No. 4051-B, it is the residential

Reference: Book IX, pp. 60-77

portions of the land – not the houses – which are the subjects of the

assessments. Besides which, the assessments being questioned are those for

1994, and the assessment for Lot No. 4051-B for that year does not show a

portion of the lot devoted for residential purposes.

Petitioner-Appellant claims that the market values used for the 1994

assessments were not in accordance with Provincial Tax Ordinance No. 93-

002, supra. As mentioned hereinbefore, the sugarland portions of both Lot Nos.

4010 and 4051-B were assigned the base market values P51,500.00 and

P66,240.00, respectively, per hectare effective 1994. Effective in 1995, the

base market values used were P44,300.00 and P57,000.00, respectively, per

hectare, which are in accordance with the said tax ordinance.

Petitioner-Appellant has a point, although Respondent-Appellee may say

that when the assessments for Lot Nos. 4010 and 4051-B (Tax Declaration

Nos. 0182 and 0220, respectively) were made in June of 1993, prior to the

enactment of Provincial Tax Ordinance No. 93-002. However, as shown above,

the market values used for the other portions of both lots, including the

improvements thereon, were the same in 1994 as in 1995. Everybody knows

that, barring any extraordinary forces affecting adversely the economic

conditions of a locality, lands in that locality continuously appreciate in value. It

is safe to assume that Respondent-Appellee considered just, fair and current

the schedule of market values he submitted to the Sangguniang Panlalawigan

of Iloilo, and which became the basis for the enactment of Provincial Tax

Ordinance No. 93-002, supra. Hence, the market values used for the

assessments of Lot Nos. 4010 and 4051-B effective 1994 were overstated.

WHEREFORE, the Decision of the Appellee Local Board of Assessment

Appeals of Iloilo dated August 9, 1994 is hereby AMENDED, thus:

1. There being no cogent reason to disturb the assessment of the

residential building on Lot No. 20, Tax Declaration No. 2337, the same is

hereby AFFIRMED;

Reference: Book IX, pp. 60-77

2. Due to a mathematical error, the total market value for Lot No. 20,

Tax Declaration No. 2336, should be P160,200.00, instead of P163,800.00, and

the assessment level should be 30%, instead of 50%. Accordingly, the over

payment of real property taxes on said lot for 1994 in the amount of P541.44

resulting from the abovementioned errors shall be applied to current or future

real property taxes due on the said lot. The overpayment of P541.44 is arrived

at as follows:

As shown on O.R. #1205952-Q, March 30, 1994, Exh. “A-1”:

Market Value
————

Assmt Level
——–

Assessed Value
————

2% Tax
————

20% Disc.
————

Net Amount
————-

P163,800 50% P81,900 P1,638.00 (P327.60) P1,310.40

Should have been:

P160,200 30% P48,060 P 961.20 (P192.24) P 768.96

———— ——Net Overpayment

———- ————- ———— ————-P 541.44 ————-

3. The sugarland portions of Lot Nos. 4010 (T.D. #0182) and 4051-B

(T.D. #0220) should be valued at P44,300 and P57,000, respectively, the same

amounts effective 1995. Consequently, the overpayments in realty taxes for

1994 (P124.19 for T.D. #0182 and P473.12 for T.D. #0220) shall be applied to

current and/or future real property taxes dues on the respective lots.

Such overpayments are computed as follows:

Sugarland portion of Lot No. 4010, T.D. No. 0182:

As shown on O.R. #1205953-Q, March 30, 1994, Exh. “A-2”:

Market Value
————

Assmt Level
——–

Assessed Value
————

2% Tax
————

20% Disc.
————

Net Amount
————-

P308,430 40% P123,370 P2,467.40 (P493.48) P1,973.92

Should have been:

P289,020 40% P115,608 P2,312.61 (P462.43) P1,849.73

———— ——Net Overpayment

———— ————- ———— ————-P 124.19 ————-

Sugarland portion of Lot No. 4051-B, T.D. No. 0220:

Reference: Book IX, pp. 60-77

As shown on O.R. #1205954-Q, March 30, 1994, Exh. “A-3”:

Market Assmt Value Level

Assessed 2% Value Tax

20% Net Disc. Amount

————P496,950

——–40%

————P198,780

———— ———— ————-P3,975.60 (P795.12) P3,180.48

Should have been:

P423,030 40% ———— ——

P169,210 ————

P3,384.20 ————-

(P676.84) ————

P2,707.36 ————-

Net Overpayment P 473.12 ————-

SO ORDERED.

Manila, Philippines, July 17, 1996.

(Signed) MARGARITA G. MAGISTRADO
Chairman

(Signed)

ELEANOR A. SANTOS VACANT Member Member

Reference: Book IX, pp. 60-77