Cebu City housing developers, owners protest steep rise in RPT

Council postpones RPT deliberation after 2025 elections

The skyline of Cebu City. | CDN Digital Photo/ Pia Piquero

CEBU CITY, Philippines – The proposal to revise real property tax (RPT) rates here is met with opposition from housing developers and property owners.

Despite acknowledging the need for an update, stakeholders argue that the planned increase is excessively steep which has caused concern among investors and business owners.

Harold See, president of the Housing Developers Association (HDA), addressed the issue at a recent Kapihan sa Cebu forum.

He stressed the detrimental impact of the RPT revision on condominium owners and investors and stated that they consider the proposed increase to be excessively large.

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“There’s really a huge impact on also those investors (condominium owners), that’s what we are trying to explain to the City Government,” See remarked.

He acknowledged the necessity of updating RPT rates, which have not been revised since 2003 but called for a staggered implementation to mitigate the financial burden.

The proposed ordinance, authored by City Councilor Noel Wenceslao, suggests a phased approach, with an initial imposition of only 50 percent of the revised rates should the ordinance be approved.

However, the legislative process has hit a standstill. A planned bicameral meeting between the City Council and the executive department intended to build consensus on the RPT revision has been delayed due to council members’ reluctance to address the issue before the 2024 elections.

Wenceslao explained that the postponement might be necessary, but suggested that discussions could resume after the election rather than addressing the issue now.

“Siguro later nalang; basin after election, not now,” he said.

He expressed readiness to discuss the matter and emphasized the urgency of addressing it sooner rather than later to avoid further increases in the Fair Market Value (FMV) of properties.

However, the majority of councilors prefer to defer discussions until after the elections to prioritize other legislative matters and the upcoming Palarong Pambansa 2024 hosting duties.

The projected impact of the revised RPT rates is staggering, with an estimated average increase of 5,000 percent.

Wenceslao warned of severe consequences for commercial establishments and developers, suggesting that such a substantial tax hike could drive businesses to relocate to areas with more favorable tax rates.

The shift could potentially stifle Cebu City’s economic growth as developers may pass the increased costs onto customers through higher rental rates.

The debate over Cebu City’s RPT revision creates a broader tension between necessary fiscal policy adjustments and economic stability. Consequently, the challenge remains to balance revenue needs with maintaining an attractive investment climate. /clorenciana

READ: The potential impact of the Real Property Valuation Act