Prescription Periods Before a Real Property Can Be Forfeited for Tax Delinquency

(Philippine legal context, R.A. 7160 – Local Government Code)

1. Why “prescription” matters

“Prescription” (statute of limitations) sets the time-limits within which government may (a) assess real-property tax (RPT) and (b) enforce collection through levy, auction, and eventual forfeiture. Once prescription runs, the tax and the lien are extinguished and the local government unit (LGU) loses the right to sell or forfeit the property.

2. Governing provisions

Provision	Key text (paraphrased)	What it covers
Sec. 270, R.A. 7160	“Basic real property tax … shall be assessed within 5 years … (10 years if fraud/intent to evade). Collection barred after 5 years from assessment… collection sales under Secs. 263 & 267 may be made within 10 years from assessment… Prescription suspended when: treasurer legally prevented; owner out of PH/cannot be located; taxpayer requests reinvestigation & signs waiver.”	Core prescriptive rules
Secs. 258-269	Notice of delinquency, levy, advertisement, public auction, redemption, purchase by LGU, resale	Procedural roadmap from delinquency to forfeiture

3. Two separate clocks

Stage	Ordinary period	Fraud/intent-to-evade
Assessment – the treasurer must issue the assessment or certify the delinquency (Sec. 270 1st sentence)	5 years from the date the tax became due	10 years from discovery of fraud
Collection – levy, auction sale, or court action (Sec. 270 2nd-4th sentences)	5 years from the date of assessment to begin collection AND a levy-cum-auction may be done up to 10 years from assessment	Same 10-year ceiling applies

Key take-away: If the LGU does nothing for five (5) years after it issues the assessment, collection is already barred; if it levies within that 5-year window, the sale (whether to a private bidder or to the LGU itself) must occur not later than 10 years from assessment.

4. Suspension of prescription

The running of the above periods stops when any of the following occurs (Sec. 270, last paragraph):

The treasurer is legally prevented from carrying out assessment or collection (e.g., court injunction).
The owner is outside the Philippines or cannot be located.
The owner requests a reinvestigation/reconsideration and signs a written waiver before the period lapses.

Once the cause of suspension disappears, the clock resumes.

5. From delinquency to forfeiture – step-by-step

Step	Statutory anchor	Timing rules
Notice of delinquency	Sec. 258	Issued immediately after quarterly due date lapses (31 Jan, 31 Mar, 30 Jun, 30 Sep). Notice posted & published for two consecutive weeks.
Levy on the property	Sec. 262	May be effected any time after notice as long as still within the 5-year collection period. Warrant of levy served on owner/occupant & Registrar of Deeds; annotated on title.
Advertisement of sale	Sec. 264	Within 30 days after levy, treasurer must post/publish notice of public auction; sale date not less than 20 days nor more than 30 days from first publication.
Public auction	Sec. 264	Highest bidder paying at least the delinquent tax, interest & expenses wins.
If no adequate bid – forfeiture to LGU	Sec. 267	When there is (a) no bidder, or (b) highest bid insufficient to cover the obligation, the LGU “purchases” the property; it is deemed forfeited to the LGU subject to redemption.
Redemption period	Sec. 265	Owner or any interested party may redeem within 1 year from the date of sale by paying the tax, interest (up to 2%/month), cost of sale, plus interest on purchase price (up to 2%/month) to buyer/LGU.
Final deed	Sec. 266 (private buyer) / Sec. 267 (LGU)	If property not redeemed after 1 year, treasurer executes final deed to purchaser; registrar cancels old title and issues new in purchaser/LGU’s name.
Resale by LGU	Sec. 268	LGU may resell property not less than 1 year after it becomes owner, following public bidding procedures.

6. Interaction of prescription and the forfeiture timeline

Levy must occur inside the 5-year collection prescriptive period (or within the extended period if suspended).
Once levied, the auction (whether private sale or forfeiture to LGU) must be done inside the 10-year outer limit counted from the assessment date.
If the treasurer sleeps on his duties and neither levies nor files a court action within five (5) years after assessment, the tax is uncollectible and no forfeiture can ever happen.
Even a levy already annotated on the title becomes void if the 10-year period to conduct the sale expires.

7. Illustrative timeline

Assessment issued: 02 Jan 2020
Collection clock starts: 02 Jan 2020

—Latest date to levy or sue (5 years): 01 Jan 2025
—Latest date to conduct auction/forfeiture (10 years): 01 Jan 2030
Redemption (if sale held 30 Dec 2024): until 30 Dec 2025
Final deed (if no redemption): after 30 Dec 2025

If any suspension ground applies—for example, the owner was abroad from 2021-2023—the corresponding days are excluded from both the 5- and 10-year counts.

8. Jurisprudence highlights

Case	G.R. No. / Date	Doctrine relevant to prescription
City Treasurer of Manila v. Philippine Trust Co.	G.R. 47748, 22 Aug 1941	Prescription operates against the State in real-property tax matters when expressly provided by statute.
Spouses Aznar v. Court of Appeals	G.R. 128003, 31 May 2000	Levy beyond the prescriptive period void; LGU cannot justify forfeiture on the ground that tax is a lien on the property.
City of Lapu-Lapu v. PEBA	G.R. 195303, 13 Oct 2021	Suspension of prescription while taxpayer’s protest is pending and before waiver.
Government of the City of Baguio v. Benguet Corp.	G.R. 180568, 20 Jul 2022	Ten-year period (fraud cases) runs from discovery, not from when the tax became due.

(Later cases up to May 1 2025 follow the same statutory framework; no Supreme Court decision has extended or shortened the Sec. 270 periods.)

9. Practical pointers

For LGUs / treasurers

Calendar your deadlines immediately upon issuance of a delinquency assessment.
Document suspensions (e.g., injunction orders, waiver dates).
Serve and annotate the warrant of levy promptly; delay can be fatal.
Ensure the auction is concluded well before the 10-year ceiling.

For property owners

Check if the assessment or levy is time-barred; you may invoke prescription as an absolute defense.
If you need more time, consider a waiver (suspends prescription) only when negotiating a settlement—otherwise, you might revive a nearly-prescribed claim.
Redeem within 1 year after sale to recover the property and remove the lien.
Verify that the treasurer complied with all procedural notices; defects can nullify the levy or sale even within the prescriptive period.

10. Conclusion

Under Philippine law, forfeiture of real property for tax delinquency is not automatic with the mere passage of time. It is strictly bounded by dual prescriptive periods:

5 years to pursue collection (levy or court action) after assessment;
10 years to complete the sale/forfeiture once assessed, or to assess/collect in fraud cases.

Failure to act within these windows permanently bars the LGU from enforcing the tax lien, safeguarding property owners from stale claims while encouraging timely tax administration.

This article is for academic and informational purposes only and is not a substitute for tailored legal advice. For specific cases, consult a Philippine tax or local-government law practitioner.