1) Real property tax (RPT) in context

Real property tax is a local tax imposed by provinces, cities, and municipalities within Metro Manila on real property (land, buildings, improvements, machinery), assessed and collected under Book II, Title II of the Local Government Code of 1991 (LGC).

Two amounts are commonly billed together:

Basic RPT (imposed by the LGU), and
Special Education Fund (SEF) tax (additional 1% on assessed value, collected for the local school board).

Delinquency rules generally apply to both.

2) When RPT becomes delinquent

A. Standard payment schedule (installment by default)

Under LGC, Sec. 249, annual RPT may be paid without interest in four (4) equal installments:

1st installment: on or before March 31
2nd installment: on or before June 30
3rd installment: on or before September 30
4th installment: on or before December 31

This is the primary “installment option” recognized by law—available before delinquency.

B. Delinquency trigger

If any installment is not paid by its due date, the unpaid amount becomes delinquent, and statutory interest begins to accrue under LGC, Sec. 250.

3) Statutory penalties for delinquent RPT

A. Interest (the main statutory penalty)

Under LGC, Sec. 250, delinquent RPT is subject to:

Interest at 2% per month on the unpaid amount (or a fraction of a month), from the due date until fully paid, but
Capped at 36 months total (maximum effective interest = 72% of the unpaid tax over the cap period).

What it applies to: generally the unpaid RPT (and commonly collected together with SEF, depending on LGU billing practice).

How it computes (practical reading):

Interest typically starts the day after the installment due date.
A fraction of a month is often treated as a full month for collection purposes.

B. Costs and consequences beyond interest

The LGC delinquency framework also allows collection measures that can add out-of-pocket costs and severe consequences, including:

Administrative expenses of levy and sale (publication, posting, fees, etc.), which become part of what must be paid to clear the delinquency; and/or
Judicial action (collection suit), with potential litigation costs; and
Levy and public auction of the property if delinquency persists.

Unlike some other local taxes (e.g., business tax), the LGC RPT delinquency section is centered on interest, then levy/sale remedies, rather than a separate “surcharge” percentage.

4) Remedies of the LGU against delinquent taxpayers (why delinquency is high-stakes)

Under LGC, Sec. 251, the LGU treasurer may collect delinquent RPT through:

A. Administrative remedy: levy → advertisement → auction sale

This is the most common statutory path:

Notice of delinquency (LGC, Sec. 254)
- Posting and/or publication requirements apply.
Levy on real property (LGC, Sec. 258)
- A levy creates a legal claim against the property; it is typically annotated.
Advertisement and sale at public auction (LGC, Sec. 260)
- Requires notices and publication/posting as prescribed.

If sold, the purchaser may eventually receive a deed, subject to redemption rules.

B. Judicial remedy: collection case in court

The LGU may file a collection suit, especially where administrative remedies are impractical or contested.

5) Redemption after tax delinquency sale (if the property is auctioned)

If the property is sold at public auction for delinquent RPT, LGC, Sec. 261 provides the owner (or person with legal interest) a right of redemption typically within one (1) year from the date of sale.

To redeem, the redeemer generally must pay:

the delinquent tax,
the interest due,
expenses of sale, and
an additional amount corresponding to interest on the purchase price (commonly collected at 2% per month from sale to redemption under the statutory scheme).

If not redeemed within the redemption period, the purchaser may obtain a final deed (LGC, Sec. 262) and the right to consolidate title, subject to procedural requirements.

6) Installment options: what the law clearly provides vs. what LGUs sometimes allow

A. Installment payments before delinquency (clear legal basis)

As stated, LGC, Sec. 249 already allows quarterly installment payment of the annual tax without interest, provided each installment is paid on time.

B. Installment payments after delinquency (not a one-size-fits-all statutory right)

Once delinquent, the LGC does not set out a single nationwide, automatic “installment plan” program for arrears comparable to Sec. 249. In practice:

Partial payments may be accepted by the local treasurer depending on local policy and systems, but
Interest continues to run on remaining unpaid balances until fully paid (subject to the 36-month cap), and
Any formal installment arrangement for delinquent amounts usually depends on:
- an ordinance, amnesty/condonation program, or
- a specific written policy authorized under local powers and budget/collection rules.

Key practical point: Even if an LGU allows installment settlement for arrears, the treasurer generally cannot simply “waive” statutory interest absent a lawful basis (commonly an ordinance-based relief program within allowed local authority).

7) Discounts, condonation, and amnesties: what to know

A. Prompt payment discounts (not for delinquency, but reduces risk)

The LGC allows LGUs to grant discounts for advance or prompt payment by ordinance (commonly implemented locally). These apply to timely payments and do not cure delinquency by themselves.

B. Condonation / reduction of interest (relief programs)

LGUs sometimes pass real property tax amnesty or condonation ordinances that reduce or waive interest/penalties for a limited period to encourage payment.

Important characteristics in practice:

Usually time-bound (e.g., a few months),
Often requires payment of the basic tax (and sometimes SEF) within the program window, and
Applies only if implemented through a valid local measure consistent with governing law and policy.

Because the availability and scope of these programs vary by LGU and time period, installment and penalty relief can differ significantly from one city/municipality/province to another.

8) Disputes and “payment under protest” (how to contest without becoming stuck)

If the taxpayer disputes the assessment, classification, or the legality of the tax, note these core principles under the LGC:

A. Protest requires payment first

Under LGC, Sec. 252, payment under protest is generally required to contest RPT assessments administratively. The protest must be filed within the statutory period (commonly within 30 days from payment, per the provision’s framework).

B. Appeals to assessment boards

Assessment disputes proceed through local assessment appeals bodies (e.g., LBAA/CBAA mechanisms), with strict periods. Missing deadlines can make the assessment final, while delinquency interest continues to accrue on unpaid amounts.

9) Practical computation examples (how penalties grow)

Example 1: One missed installment

Assume unpaid RPT + SEF portion for a quarter totals ₱50,000, unpaid past the due date.

Monthly interest: 2% × ₱50,000 = ₱1,000 per month
If paid after 5 months: ₱1,000 × 5 = ₱5,000 interest
Total due (excluding other costs): ₱55,000

Example 2: Long delinquency and the 36-month cap

Same ₱50,000 unpaid for 48 months:

Interest is capped at 36 months
Maximum interest: 2% × 36 = 72% of ₱50,000 = ₱36,000
Total (before expenses): ₱86,000

Expenses of levy, publication, and sale (if initiated) are separate items that can increase the amount needed to settle/redeem.

10) What delinquent taxpayers should expect procedurally at the LGU level

While steps vary by LGU, a common progression is:

Billing / reminders / demand notices
Posting/publication of delinquency notice (per LGC process)
Levy annotation and issuance of levy documents
Auction scheduling, publication, posting
Auction sale
Redemption period and eventual consolidation if not redeemed

Settling before levy/auction typically avoids added expenses and property risk.

11) Key takeaways (Philippine legal framework)

Quarterly installment payment of annual RPT is an express right under LGC, Sec. 249 (if paid on time).
Once delinquent, the principal statutory penalty is interest at 2% per month, capped at 36 months under LGC, Sec. 250.
Continued delinquency exposes the property to levy and public auction under LGC, Secs. 251, 254, 258, 260, with redemption rules under Sec. 261.
“Installment plans” for delinquent RPT are largely policy/ordinance-dependent at the LGU level; partial payments may be accepted, but statutory interest generally continues until full payment unless lawfully reduced under a valid relief program.