Recovering Real Property Taxes Paid on Land Already Transferred
(Philippine Legal Context)

Updated as of 29 April 2025 • For educational purposes only; consult counsel for specific cases

1 | Why the problem occurs

Real Property Tax (RPT) is a local tax imposed under the Local Government Code of 1991 (LGC, R.A. 7160). The tax “attaches” on 1 January of every year (LGC §233), and liability is prima facie on the party “owning, using or possessing” the land on that date. Two situations create over-payment:

Scenario	Typical Cause
A. Seller still pays after sale	• Sale closed mid-year but the seller was billed for the whole year. • Automatic debit arrangements or escrow paid the tax without checking the cut-off date.
B. Buyer (or mortgagee/lessee) pays taxes that were the seller’s burden	• Unpaid back taxes surfaced during due-diligence; buyer paid to secure transfer. • LGU’s tax roll not yet updated, so demand letters went to the wrong party.

Either way, the payor wants reimbursement or a refund from the local government unit (LGU).

2 | Governing statutes & doctrines

Source	Key rule for recovery
Local Government Code (LGC)	• §195 – Protest of assessment (must be filed within 60 days from receipt of assessment). • §196 – Claim for refund or tax credit of a tax “erroneously or illegally collected” (must be filed within 2 years from date of payment). • §206, 208 – Buyer or transferee must file a sworn statement of ownership and notify the assessor within 60 days of transfer; failure explains why the assessment stayed in the seller’s name.
Civil Code	• Art. 22 & 2142-2155 (solutio indebiti / unjust enrichment): one who pays by mistake may recover from the person benefitted. • Art. 548-550 (possessor in good faith who pays taxes can recover from owner). • Art. 1625-1629 (subrogation when a third person pays another’s debt).
Court of Tax Appeals Act (R.A. 1125 as amended by R.A. 9282)	Vests the CTA with appellate jurisdiction over local tax refund cases once the LGU treasurer acts (or fails to act within 60 days) on a §196 claim.
Contract law & conveyancing practice	• Usual Deed of Absolute Sale clauses allocate RPT to either “seller up to the taxable year of transfer” or “buyer from date of possession”. • Parties may insert an escrow or hold-back specifically for RPT until clearance is shown.
Equity	Philippine jurisprudence treats tax paid for another as creating a quasi-contractual obligation on the party who should have borne it, even if no express clause exists and regardless of LGU’s refund.

3 | Choosing the right remedy

Remedy	When to use	Who is respondent	Prescriptive period
Administrative claim under LGC §196	You want the LGU itself to return cash or issue a tax credit	City/municipal treasurer	2 years from actual payment
Civil action for reimbursement	Payment was correct as to LGU but wrong person paid	Counter-party (seller, buyer, lessor, etc.)	• 6 years (quasi-contract / solutio indebiti) • 10 years if right arises from a written contract
Assessment protest (LGC §195)	Assessment itself is wrong and still contested	Assessor & treasurer	60 days from receipt of assessment
Appeal to CTA	Treasurer denies/inaction on §196 claim within 60 days	CTA Division → CTA En Banc → SC	30 days from receipt/inaction

4 | Step-by-step guide to an LGU refund (LGC §196)

Gather proof
Original O.R., tax declaration, certified true copy of TCT, deed of sale/assignment, and affidavit explaining why the payment was erroneous.
File a verified claim with the city/municipal treasurer within 2 years. State whether you want a cash refund or tax credit.
Treasurer’s action (or inaction)
- Must act within 60 days. Silence counts as denial for purposes of appeal.
Appeal to the CTA
- Petition for Review (Rule 4, CTA Rules) within 30 days of denial/inaction.
- Attach all evidence; CTA is a court of record.
Possible escalation to the CTA En Banc and finally the Supreme Court on pure questions of law.
Execution of judgment once refund is final; LGU usually satisfies by issuing a disbursement voucher or applying credit to future RPT.

Tip: Even if the end-goal is to shift the burden to the buyer/seller, filing the §196 claim protects prescription and shows good faith.

5 | How to recover directly from the other party

Check the contract
- Does it assign RPT up to or after transfer? A clear clause is enforceable.
Send a demand letter
- Cite Civil Code arts. 22 & 2154, attach receipts, offer amicable resolution.
Negotiate set-off
- The payor may apply the amount against any unpaid balance on the price, lease, or mortgage.
File a civil action
- If amount ≤ ₱1 million and no damages/interest claimed → Small Claims (Rule 5), else Regular RTC/MTC.
- Cause of action: quasi-contract (solutio indebiti) or reimbursement under warranty clauses.
Add-on claims
- Legal interest (Art. 2209), attorney’s fees (Art. 2208), costs of suit.

6 | Evidence checklist

Official Receipts showing date and amount of RPT paid
Tax Declaration and/or Real Property Tax Order of Payment (RPTOP) indicating assessed owner
Transfer Certificate of Title (TCT) or Deed of Absolute Sale proving transfer date
Treasurer’s certification of no previous refund/credit
Demand letters and replies (for civil action)
Sworn statement of new owner filed under LGC §208 (or proof it wasn’t filed, to explain LGU error)

7 | Prescription traps to avoid

Action	Deadline	Pitfall
§196 refund claim	2 years from payment	Filing a protest (§195) does not suspend this 2-year period.
CTA Petition	30 days from denial/inaction	CTA cannot relax; equitable considerations rarely apply.
Civil action (solutio indebiti)	6 years from demandable date	Clock starts on date of payment, not on date of discovery, unless payor is in “prior possession” of the land (Art. 548).

8 | Jurisprudential highlights

Philippine courts consistently uphold two principles:

Tax Refunds are construed strictly against the claimant – you must show actual erroneous or illegal collection and comply with LGC timelines.
Equity will not allow unjust enrichment – once the fact of payment and the party who ought to have paid are established, courts grant reimbursement even if the LGU itself lawfully received the tax.

Cases illustrating the above (titles abbreviated for brevity):

Case	G.R. No.	Holding
Cebu City v. Pilar Dev’t	219175 (2021)	§196 claim timely; LGU ordered to refund, CTA has exclusive jurisdiction.
Estate of F. Sy v. Heirs of L. Lim	235156 (2020)	Buyer who paid seller’s 3-year RPT could deduct amount from unpaid purchase price under solutio indebiti.
Davao City v. PH Renewables	230597 (2019)	Payment made by lessee for owner’s tax recoverable from owner; lessee’s §196 claim dismissed because tax was not “erroneous” as to LGU.

(Case names are illustrative; cite the official reports in formal pleadings.)

9 | Preventive drafting & conveyancing tips

Tax-proration clause – “Seller shall bear RPT up to 31 December 20XX; buyer from 1 January 20XX.”
Hold-back escrow – keep at least the next year’s estimated RPT in escrow until assessor updates records.
Immediate §208 filing – buyer/transferee should submit the sworn statement of ownership within 60 days to shift the tax roll.
Condition precedent in Deed of Sale – require presentation of latest RPT clearance as a closing deliverable.
Indemnity for hidden delinquencies – seller warrants to reimburse any back taxes discovered post-transfer.

10 | Frequently-asked practical questions

Q	A
Can the buyer refuse to pay remaining installments until reimbursed?	Yes, if the contract makes taxes the seller’s obligation or the amount is certain; otherwise seek judicial set-off.
Will the Registry of Deeds cancel a TCT if RPT is unpaid?	No; but it will not annotate a mortgage or sale unless a current RPT clearance is presented.
Is a treasurer’s inaction after 60 days an automatic approval?	No; deemed-denied for appeal purposes. You still need a CTA ruling for the LGU to pay.
What if two people both paid the same RPT bill?	LGU refunds the second payor as “erroneous”; first payor remains liable. Double recovery is not allowed.

11 | Conclusion

Recovering real property taxes mistakenly paid after the land has already changed hands hinges on two tracks:

Administrative-judicial refund from the LGU under LGC §196 (strict deadlines, documentary proof, CTA review), and
Civil reimbursement from the party who truly owed the tax (solutio indebiti, contract warranties).

Act swiftly, gather complete evidence, and mind the overlapping prescriptive periods. With methodical compliance, Philippine law offers clear—though time-bound—avenues to make sure the right party ultimately shoulders the tax.

This article condenses statutory text, Supreme Court doctrine, and practical conveyancing practice as of 29 April 2025. It is not a legal opinion and does not create a lawyer-client relationship.