Tax Articles

Remedies Against Real Property Tax Assessments

By: Atty. Mabel L. Buted

Mabel L. Buted Partner   +632 8403-2001 loc.160 This email address is being protected from spambots. You need JavaScript enabled to view it. View Profile

The remedy to contest real property tax (“RPT”) assessments is provided under Sections 226 and 252 of the Local Government Code (“LGC”). Based on these sections, payment must be made first by the taxpayer before any protest may be entertained. This is called “payment under protest.” The tax paid under protest would be held in trust by the government. Thereafter, after making payment, the taxpayer has 30 days to file a protest in writing. The protest must be filed to the local treasurer of the local government unit (“LGU”). The local treasurer, in turn, has 60 days to decide. If the protest is denied or the local treasurer does not decide within that period, the taxpayer may appeal to the Local Board of Assessment Appeals (“LBAA”) within 60 days from the denial of the protest or upon the lapse of the 60-day period. The LBAA, on the other hand, has 120 days to decide the appeal. If the taxpayer is not satisfied with the decision of the LBAA, it may appeal before the Central Board of Assessment Appeals (“CBAA”) within 30 days from receipt of the decision.

There are two key points to remember based on these rules. One is that “payment under protest” is required before the taxpayer can file a written protest. The other one is that, unlike the inaction of the local treasurer within the given period to decide, the LBAA’s inaction is not appealable. Note that the taxpayer can elevate their case before the CBAA only when the LBAA decides within the 60-day period. We are aware of cases that have remained pending for resolution with the LBAA for so long. These, consequently, leave the taxpayers in a problematic situation. There is no way by which they could appeal further and recover the tax they previously paid until the LBAA acts on their protest.

Is there any other remedy then? Can the taxpayer not pay under protest and undergo appeal before the LBAA?

There are various cases where the Supreme Court allowed direct filing of action in court. If the taxpayer raises only pure questions of law or challenges the lack of authority or power of the LGU to assess and collect RPT, it can invoke the judicial review power of the courts to determine if grave abuse of discretion amounting to lack or excess of jurisdiction has been committed. In these instances, the taxpayer may skip availing the administrative remedy and it can institute a case directly with the court.

However, the Supreme Court clarified that, if the taxpayer raises questions affecting the reasonableness or the correctness of the assessments or issues that are factual in nature, the correct procedure is to avail of the remedy provided under the LGC, and that is, to pay under protest and undergo the process of appeal before the Board of Assessment Appeals, including the LBAA. Examples of these questions deal on double taxation of real properties, prescription and errors made in the assessment and collection of taxes due. In a recent case (G.R. No. 207140, January 30, 2023), the Supreme Court held that, a claim for exemption from RPT, whether full or partial, also pertains to the reasonableness or correctness of the assessment, and thus, this is a question of fact that administrative agencies should resolve. In such case, compliance with the "payment under protest" requirement in the LGC is mandatory. Otherwise, the local treasurer will not act on the protest, and the LBAA will have no authority to review the assessment.

It is good to know that taxpayers have this other remedy in going directly with the court. But this is an exception as this is available only in exceptional circumstances. Usually, taxpayers dispute the reasonableness and correctness of the assessments, and not their legality or validity. This leaves them with no recourse other than to pay under protest and file a written protest. If the case reaches the LBAA, the taxpayer is also left with no other choice other than to await the decision of the Board to appeal further.

I heard that Former DILG Secretary Benhur Abalos, Jr. calls for the amendment of the 33-year-old LGC, as the law no longer meets the present needs of the LGUs (https://manilastandard.net/news/elections-2025/314513151/abalos-calls-for-overhaul-of-33-year-old-local-government-code.html). I hope that our local taxation rules provided in the law, especially those that pose issues and concerns as the matters discussed above, will be revisited.