September 21, 2001

DAR OPINION NO. 19-01

MEMORANDUM

FOR             :     DIRECTOR JEFFREY M. GALAN
                                           PARC Secretariat

SUBJECT    :     Request to Deduct Real Property Tax Delinquencies/Arrearages Due the Previous Landowners from Proceeds of the Value of Their Lands Covered Under CARP

This refers to your request for comment on PARCCOM Resolution No. 07, series of 2001, entitled: "A Resolution Requesting the Land Bank of the Philippines to Deduct Real Property Taxes Delinquencies/Arrerages Due to the Previous Landowner/s from the Proceeds of the Value of the Land Covered Under CARP Thru VOS/CA and such Deduction shall be Effected Only After Compliance of the Owner of All the Requirements for Payment; Further Request All Municipal Treasurers of the Region to Accept/Receive Taxes Payment Tendered by the Farmer-Beneficiaries for Immediate Issuance of Tax Declaration in Their Name; and Furthermore, Request PARC to Issue Corresponding Policy to Help the Farmer Beneficiaries Whose Awarded Lands are Foreclosed by the Local Government Units (LGUs)."

Section 66 of Republic Act No. 6657 provides:

"Section 66.  Exemption from Taxes and Fees of Land Transfers. — Transactions under this Act involving a transfer of ownership, whether from natural or juridical persons, shall be exempted from taxes arising from capital gains. These transactions shall also be exempted from the payment of registration fees, and all other taxes and fees for the conveyance or transfer thereof: Provided, That all arrearages in real property taxes, without penalty of interest, shall be deductible from the compensation to which the owner may be entitled." (emphasis supplied)

It is clear under said provision of law that it is the previous landowner who should pay the arrearages in real property taxes. Thus, awardees/beneficiaries should not be penalized or made to suffer, through foreclosure by Local Government Units (LGUs) of their awarded lands, due to non-payment of said taxes by previous landowners. Such foreclosure is unwarranted.

It bears stressing here, moreover, that the rights and obligations of beneficiaries shall commence only from the time of the award. Section 24 of R.A. No. 6657 is explicit:

"Section 24.  Award to Beneficiaries. — The rights and responsibilities of the beneficiary shall commence from the time the DAR makes an award of the land to him. . . ."

Thank you.

(SGD.) DELFIN B. SAMSON
Director, BALA