City Assessor of Cebu City vs. Association of Benevola de Cebu 152904

 

City Assessor of Cebu City versus Association of Benevola De Cebu, Inc G.R. No. 152904, June 08, 2007 Second Division, Velasco, Jr., J. Facts: Benevola de Cebu (Benevola) is a registered non-stock, non-profit Facts: organization who owns Chong Hua Hospital (CHH) in Cebu City. Assessor of Cebu assessed the medical arts center (CHHMAC) constructed thereto of the CHH as commercial with a market value of around 28MPhp, and an assessed value of around 10MPhp at the assessment level of 35%. Benevola thus filed for a letter petition with the Cebu City Local Board of Assessment Appeals (LBAA) for reconsideration, reconsideration, claiming that CHHMAC is part of the CHH, where thus the assessment rate must be 10%. The LBAA ruled in favor of Benevola which the Central Board of Assessment Appeals (CBAA) affirmed in toto. The Court of Appeals ruled the same, hence a petition for review on certiorari under rule 45 to the Supreme Court. Issue(s):  Is a medical arts center built by a hospital to house its doctors a Issue(s):  separate commercial establishment subject to a 35% assessment rate imposed to buildings commercial in nature or an appurtenant to the hospital entitled to a 10% assessment rate for purposes of real property tax. Decision: The CHHMAC is appurtenant to the hospital, and thus entitled to a 10% assessment rate. Section 10 of the Local Assessment Regulations provide that Real Property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. Actual use referring to the principal purpose for the property to be utilized by the person possessing it. Constructing the CHHMAC is expected of and required of CHH since it is a duly licensed tertiary hospital. CHHMAC is an integral part of CHH, as CHH is mandated by law to equip itself of the service and capabilities needed to support certified medical specialists in various fields of medicine. The ICCU and ancillary services needed by CHH is the primary function of CHHMAC. Verily, being an integral part of CHH, CHHMAC should be under the same special assessment level of as that of the former and thus, is entitled to the 10% assessment rate and not 35%.

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