Q: Is It Legal to Impose Real Property Taxes on Common Areas in a Condominium in the Philippines?
A: The Legality of Real Property Taxes on Condominium Common Areas
Real property tax (RPT) is a yearly tax that is payable by the owner of real property such as land, building, or machinery. In the context of condominiums in the Philippines, individual unit owners are unquestionably liable to pay RPT for their respective units. However, a frequently asked question is whether RPT can also be legally imposed on common areas such as lobbies, swimming pools, and elevators.
The Condominium Act (Republic Act No. 4726)
The Condominium Act is the primary law that governs condominium ownership and operations in the Philippines. Under this Act, the common areas in a condominium are held in common by all unit owners in proportion to their unit's floor area. This means that every unit owner has an undivided or "pro indiviso" interest in the common areas.
Who Pays the RPT for Common Areas?
According to the Condominium Act, it is the condominium corporation, which is formed by the unit owners, that holds the title to the common areas. As such, the condominium corporation is the one responsible for paying RPT on common areas. Usually, this expense is budgeted as part of the monthly dues collected from the unit owners, who are, in essence, the members and shareholders of the condominium corporation.
Is It Legal?
The imposition of RPT on common areas in a condominium complex is legal under Philippine law. It is one of the obligations that the condominium corporation must comply with, and non-payment can lead to penalties, including but not limited to, interest and surcharges, and even auction of the property if the arrearages are significant.
Caveat: Local Ordinances
It's worth noting that local government units (LGUs) have the authority to impose and collect RPT, and the specific rules can vary between different LGUs. Therefore, it's always good practice to consult the local ordinances and the assessor's office in your area for the most accurate and current information.
Summary
So, to answer the question: Yes, it is legal to impose Real Property Taxes on the common areas of a condominium in the Philippines. The responsibility for these taxes generally falls on the condominium corporation, which passes these costs on to the unit owners, usually in the form of monthly dues. Failure to pay these taxes can result in penalties and, in extreme cases, auctioning of the property.
Disclaimer: The information contained in this article is for general informational purposes only and should not be construed as legal advice. Always consult with a qualified legal professional for specific advice tailored to your situation.