Introduction

In the Philippine legal framework, estate tax administration involves a multifaceted process where the valuation of real properties, including buildings, plays a critical role. The estate tax, imposed under Section 84 of the National Internal Revenue Code (NIRC) as amended by Republic Act (RA) No. 10963 (TRAIN Law) and further modified by RA No. 11534 (CREATE Law), requires the inclusion of the decedent's gross estate at its fair market value (FMV). For buildings, this FMV is determined by the higher of the zonal value set by the Bureau of Internal Revenue (BIR) or the assessed value indicated in the tax declaration issued by the Local Government Unit (LGU). Obtaining a building tax declaration is thus essential for accurate estate tax computation, compliance, and settlement. This article comprehensively explores the procedures for securing such a declaration, the requisite LGU documentation and processes, and the mechanisms for contesting perceived overcharging or over-assessment, all within the Philippine context.

Understanding the Building Tax Declaration

A building tax declaration is an official document issued by the city or municipal assessor's office, serving as a record of the property's physical characteristics, ownership, and assessed value for real property taxation purposes. Under the Local Government Code (LGC) of 1991 (RA No. 7160), particularly Sections 201 to 225, local assessors are mandated to appraise real properties, including buildings, based on their actual use, structural features, and market conditions. This declaration is distinct from the land tax declaration and focuses on improvements such as residential, commercial, or industrial structures.

For estate tax purposes, the tax declaration is pivotal because:

It provides the assessed value, which may influence the FMV used in estate tax returns (BIR Form 1801).
It ensures the property is properly inventoried in the decedent's estate.
Absence or inaccuracy in the declaration can lead to delays in estate settlement, potential penalties under Section 248 of the NIRC (civil penalties) or Section 255 (failure to file returns), and complications in transferring titles via the Register of Deeds.

Buildings must be declared separately from land if they are improvements thereon, as per Section 202 of the LGC, which requires owners or administrators to file declarations for new or improved properties.

LGU Requirements for Obtaining a Building Tax Declaration

The process of securing a building tax declaration varies slightly across LGUs due to local ordinances, but it is standardized under the LGC and the Manual on Real Property Appraisal and Assessment Operations (MRPAAO) issued by the Bureau of Local Government Finance (BLGF). The following outlines the general requirements and steps:

1. Eligibility and When to Apply

Who Can Apply: The owner, administrator, or executor of the estate (in cases of deceased owners) may file. For estates, the executor or administrator appointed under the Rules of Court (Rule 78-90) or via extrajudicial settlement (Section 1, Rule 74) holds this responsibility.
Timing: Declarations must be filed within 60 days from the date of transfer of ownership or completion of construction/improvement (Section 203, LGC). For estate tax, it should be obtained prior to filing the estate tax return, which is due within one year from death (Section 90, NIRC, as amended).
Special Cases: If the building was undeclared at the time of death, the estate representative must declare it posthumously, providing proof of the decedent's ownership.

2. Required Documents

LGUs typically require the following, though additional items may be mandated by local ordinances:

Sworn Declaration Form: A standard form (Tax Declaration of Real Property) available from the assessor's office, detailing the building's description, cost, and use.
Proof of Ownership:
- Certified true copy of the Transfer Certificate of Title (TCT) or Original Certificate of Title (OCT) from the Register of Deeds.
- Deed of Sale, Donation, or Extrajudicial Settlement if ownership was transferred.
- For estates, Letters of Administration or Court Order appointing the executor.
Building Plans and Specifications: Approved architectural and structural plans from the Office of the Building Official (OBO).
Building Permit and Occupancy Permit: Issued under the National Building Code (PD 1096).
Bill of Materials and Cost Estimates: To substantiate the declared value, especially for new constructions.
Photographs: Recent photos of the building's exterior and interior.
Payment Receipts: Evidence of prior real property tax (RPT) payments, if applicable.
Authorization: If filed by a representative, a Special Power of Attorney (SPA) or authorization letter.
For Condominiums or Multi-Unit Buildings: Master Deed of Declaration and Condominium Certificate of Title (CCT).
Additional for Estates: Death Certificate of the decedent and BIR-issued Certificate Authorizing Registration (CAR) if partial settlement is involved.

3. Step-by-Step Process

Step 1: Preparation: Gather all documents and complete the sworn declaration, notarized if required by the LGU.
Step 2: Submission: File at the city/municipal assessor's office. Some LGUs offer online portals (e.g., Quezon City or Makati) for initial submissions.
Step 3: Inspection and Appraisal: The assessor conducts an ocular inspection to verify details. Appraisal follows the Schedule of Market Values (SMV) approved by the Sangguniang Panlalawigan/Bayan, using the cost approach (replacement cost less depreciation) or income approach for commercial buildings.
Step 4: Assessment and Issuance: The assessor computes the assessed value (typically 20-50% of FMV, depending on classification under local ordinances). The declaration is issued upon payment of any filing fees (minimal, often P100-P500).
Step 5: Annotation: The declaration is annotated on the tax roll, and a copy is provided for BIR purposes.
Fees: Nominal administrative fees; no standard national rate, but LGUs may charge based on building value (e.g., 1/10 of 1% of assessed value for revisions).

4. Common Challenges and Variations

Undeclared Buildings: If discovered during estate inventory, penalties under Section 222 of the LGC (fine up to P5,000 or imprisonment) may apply, but amnesty programs (e.g., under BLGF issuances) occasionally waive these.
LGU-Specific Rules: Metro Manila LGUs like Manila require environmental compliance certificates for certain buildings, while rural areas may have simpler processes.
Digitalization: Under the Ease of Doing Business Act (RA 11032), many LGUs have streamlined processes, with timelines not exceeding 3-20 days for simple transactions.

Contesting Overcharging or Over-Assessment

Overcharging typically refers to an assessed value deemed excessively high, leading to inflated RPT or estate tax liabilities. The LGC provides a structured appeals process to safeguard property owners' rights, aligned with due process under the Constitution (Article III, Section 1).

1. Grounds for Contest

Erroneous classification (e.g., residential vs. commercial).
Overvaluation based on incorrect appraisal methods.
Failure to consider depreciation, obsolescence, or actual use.
Discrepancy with BIR zonal values.
Procedural irregularities in assessment.

2. Administrative Remedies

Payment Under Protest: Pay the contested RPT amount under protest (Section 252, LGC) within 60 days from receipt of the assessment notice. This is a prerequisite for appeals.
Appeal to Local Board of Assessment Appeals (LBAA): File within 60 days from receipt of the written notice of assessment (Section 226, LGC). The LBAA, composed of the Register of Deeds, Provincial/City Prosecutor, and Engineer, hears the case. Submit evidence like independent appraisals, comparable sales data, or expert testimonies.
Decision Timeline: LBAA must decide within 120 days; inaction allows appeal.

3. Further Appeals

Central Board of Assessment Appeals (CBAA): Appeal LBAA decisions within 30 days (Section 229, LGC). The CBAA in Manila reviews de novo, with authority to adjust values.
Court of Tax Appeals (CTA): Petition for review of CBAA decisions within 30 days (Section 7, RA 9282). The CTA en banc or divisions handle tax disputes, applying judicial review standards.
Supreme Court: Final appeal via certiorari under Rule 45, Rules of Court, on questions of law.

4. Evidence and Strategies

Engage licensed appraisers for counter-valuations using USPAP (Uniform Standards of Professional Appraisal Practice) or IVS (International Valuation Standards).
Reference BLGF opinions or DOF (Department of Finance) circulars on appraisal guidelines.
For estates, coordinate with BIR to ensure consistency, as estate tax FMV takes precedence.
Judicial Precedents: Cases like City of Manila v. Laguio (G.R. No. 118127) emphasize fair valuation, while Allied Banking Corp. v. Quezon City (G.R. No. 154126) underscores procedural due process in assessments.

5. Remedies for Overpayment

If successful, refunds or credits are granted (Section 253, LGC), with interest at 2% per month if delay is attributable to the LGU.
Criminal remedies under the Anti-Graft Law (RA 3019) if over-assessment involves corruption.

Interplay with Estate Tax Compliance

Integrating the building tax declaration into estate tax filing:

Attach certified true copies to the estate tax return.
If values differ, reconcile with BIR Revenue District Office (RDO).
Non-compliance can trigger audits under Section 228, NIRC, with deficiencies plus 25% surcharge and 12% interest.
Tax Clearance: Required for title transfers, ensuring all RPT and estate taxes are settled.

Conclusion

Navigating the acquisition of a building tax declaration for estate tax purposes demands meticulous adherence to LGU protocols under the LGC, while the appeals mechanism offers robust protection against overcharging. Estate administrators should proactively engage professionals like lawyers, accountants, or appraisers to ensure accuracy and efficiency. This process not only facilitates tax compliance but also upholds property rights in the broader Philippine fiscal landscape. For specific cases, consulting the relevant LGU assessor or BIR office is advisable to account for any localized updates or interpretations.