his use of it shall not /e in5urious to the e%ual en5oy$ent of others havin0 an e%ual ri0ht to the en5oy$ent of their property, no r in5urious to the ri0ht of the co$$unity
FERRER V. CITY MAYOR BAUTISTA FACTS: ACTS: Quezon Quezon City Council enacted enacted Ordinance Ordinance No. SP-209! SP-209! S-20"", S-20"" , or the Socialized Housing Tax of Quezon City , Section 3 of which provides: SECTION 3 I!"OSITION # special assess$ent e%uivalent to one&half percent '()*+ on the assessed value of land in ecess of One -undred Thousand "esos '"hp.((,(((((+ shall /e collected /y the City Treasurer which shall accrue to the Socialized -ousin0 "ro0ra$s of the Quezon City 1overn$ent
"roperty ri0hts of individuals $ay /e su/5ected to restraints and /urdens in order to ful4ll the o/5ectives of the 0overn$ent 0overn$ent in the eercise eercise of police power power In this 5urisdiction, it is well&entrenched that taation $ay /e $ade the i$ple$ent of the states police power
2Eective for 4ve ')+ years, the Socialized -ousin0 Ta ' SHT + shall /e utilized /y the Quezon City 1overn$ent for the followin0 pro5ects: 'a+ land purchase6land /an7in08 '/+ i$prove$ent of current6eistin0 socialized housin0 facilities8 'c+ land develop$e develop$ent8 nt8 'd+ constructio construction n of core houses, sanitary sanitary cores, cores, $ediu$&ris $ediu$&rise e /uild /uildin0 in0s s and other other si$ila si$ilarr struct structure ures8 s8 and and 'e+ 4nanci 4nancin0 n0 of pu/lic& pu/lic&pri privat vate e partnership a0ree$ent of the Quezon City 1overn$ent and National -ousin0 #uthority 'NHA 'NHA++ with the private sector sector 2
The S-T char0ed /y the Quezon City 1overn$ent is a ta which is within its power to i$pose Cities are allowed to eercise such other powers and dischar0e such other functions functions and responsi/ responsi/ilitie ilities s as are necessary, necessary, appropria appropriate, te, or incidental to eFcient and eective provision of the /asic services and facilities which include, a$on0 others, pro0ra$s and pro5ects for low&cost housin0 and other other $ass dwellin0s dwellin0s The collection collections s $ade accrue to its socialized socialized housin0 pro0ra$s and pro5ects
On the the othe otherr hand hand,, Ordina Ordinance nce No. SP-22# SP-22#! ! S-20"# S-20"#) was enact enacted ed on 9ece$/er ., ;(.3 and too7 eect ten days after when it was approved /y responde respondent nt City !ayor !ayor The procee proceeds ds collec collected ted fro$ fro$ the 0ar/a0 0ar/a0e e fees fees on residential properties shall /e deposited solely and eclusively in an ear$ar7ed spec specia iall acco accoun untt unde underr the the 0ene 0enera rall fund fund to /e util utiliz ized ed for for 0ar/ 0ar/a0 a0e e collections< Section . of the Ordinance set forth the schedule and $anner for the collection of 0ar/a0e fees:
The ta is not a pure eercise of tain0 power or $erely to raise revenue8 it is levied with a re0ulatory purpose The levy is pri$arily in the eercise of the police power for the 0eneral welfare of the entire city It is 0reatly i$/ued with pu/lic interest Ge$ovin0 slu$ areas in Quezon City is not only /ene4cial to the underpriv underprivile0e ile0ed d and ho$eless ho$eless constituen constituents ts /ut advanta0e advanta0eous ous to the real real prope property rty owners owners as well well The situatio situation n will i$pro i$prove ve the value value of the their their property invest$ents, fully en5oyin0 the sa$e in view of an orderly, secure, and safe co$$unity, and will enhance the %uality of life of the poor, $a7in0 the$ law&a/idin0 constituents and /etter consu$ers of /usiness products
The collection of the 0ar/a0e fee shall accrue on the 4rst day of =anuary and shall /e paid si$ultaneously with the pay$ent of the real property ta, /ut not later than the 4rst %uarter install$ent > In case a household owner refuses to pay, a penalty of ;)* of the 0ar/a0e fee due, plus an interest of ;* per $onth or a fraction thereof, shall /e char0ed "etitioner ?errer clai$s that the annual property ta is an ad valore$ ta, a percenta0e of the assessed value of the property, which is su/5ect to revision every three '3+ years in order to re@ect an increase in the $ar7et value of the property The S-T and the 0ar/a0e fee are actually increases in the property ta which are not /ased on the assessed value of the property or its reassess$ent every three years8 hence, in violation of Sections ;3; and ;33 of the A1C ISSUE: Bhether ISSUE: Bhether or not the ta ordinances are valid
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In the su/5ect su/5ect ordinan ordinance ce i$posin i$posin0 0 0ar/a 0ar/a0 0 collec collectio tion n fee, fee, the rates rates of the i$posa i$posa/le /le fee depend depend on land land or @oor @oor area area and whether whether the payee payee is an occupant of a lot, condo$iniu$, social housin0 pro5ect or apart$ent ?or easy reference, the relevant provision is a0ain %uoted /elow:
$E%&: Ordinance $E%&: Ordinance No S"&;(), S&;(.., the Socialized -ousin0 Ta is valid Ordinanc Ordinance e No S"&;;3), S"&;;3), S&;(.3, S&;(.3, which collects collects an annual 0ar/a0e fee on all do$estic households in Quezon City, is here/y declared as DNCONSTITDTION#A #N9 IAAE1#A RATIO: The .>< Constitution eplicitly eplicitly espouses the view that the use of property property /ears a social function and that all econo$ic a0ents shall contri/ute to the co$$on 0ood "roperty has not only an individual function, insofar as it has to provide for the needs of the owner, /ut also a social function insofar as it has to provide for the needs of the other $e$/ers of society society The principle is this: "olice power proceeds fro$ the principle that every holder of property, however
The rates /ein0 char0ed /y the ordinance are un5ust and ine%uita/le: a resident of a ;(( s% $ unit in a condo$iniu$ or socialized housin0 pro5ect has to pay twice the a$ount than a resident of a lot si$ilar in size8 unli7e unit occupants, all occupants of a lot with an area of ;(( s% $ and less have to pay a 4ed rate of "hp.(((( "hp.((((88 and the sa$e a$ount of 0ar/a0e 0ar/a0e fee is i$posed re0ardless re0ardless of whether the resident is fro$ a condo$iniu$ or f ro$ a socialized housin0 pro5ect Indeed, the classi4cations under Ordinance No S&;;3) are not 0er$ane to its declared purpose of Hpro$otin0 shared responsi/ility responsi/ility with the residents to attac7 their co$$on $indless attitude in over&consu$in0 the present resources and in 0eneratin0 wasteH Instead of si$plistically cate0orizin0 the payee into land or @oor occupant of a lot or unit of a condo$iniu$, socialized housin0 pro5ect or apart$ent, respondent City Council should have considered factors that could
collection ?actors include, a$on0 others, household a0e and size, accessi/ility to waste collection, population density of the /aran0ay or district, capacity to pay, and actual occupancy of the property G# No ((3 $ay also /e loo7ed into for 0uidance Dnder said law, B! service fees $ay /e co$puted /ased on $ini$u$ factors such as types of solid waste to include special waste, a$ount6volu$e of waste, distance of the transfer station to the waste $ana0e$ent facility, capacity or type of A1D constituency, cost of construction, cost of $ana0e$ent, and type of technolo0y Bith respect to utility rates set /y $unicipalities, a $unicipality has the ri0ht to classify consu$ers under reasona/le classi4cations /ased upon factors such as the cost of service, the purpose for which the service or the product is received, the %uantity or the a$ount received, the dierent character of the service furnished, the ti$e of its use or any other $atter which presents a su/stantial dierence as a 0round of distinction
services and facilities which include, a$on0 others, pro0ra$s and pro5ects for low&cost housin0 and other $ass dwellin0s The collections $ade accrue to its socialized housin0 pro0ra$s and pro5ects T,e 'a i( no' a )re eerci(e o/ 'ain+ oer or 1ere* 'o rai(e re3en)e4 i' i( *e3ied i', a re+)*a'or )ro(e. The levy is pri$arily in the eercise of the police power for the 0eneral welfare of the entire city It is 0reatly i$/ued with pu/lic interest Ge$ovin0 slu$ areas in Quezon City is not only /ene4cial to the underprivile0ed and ho$eless constituents /ut advanta0eous to the real property owners as well The situation will i$prove the value of the their property invest$ents, fully en5oyin0 the sa$e in view of an orderly, secure, and safe co$$unity, and will enhance the %uality of life of the poor, $a7in0 the$ law&a/idin0 constituents and /etter consu$ers of /usiness products /
No, the S-T does NOT violate the rule on e%uality ?or the purpose of underta7in0 a co$prehensive and continuin0 ur/an develop$ent and housin0 pro0ra$, the disparities /etween a real property owner and an infor$al settler as two distinct classes are too o/vious and need not /e discussed at len0th The dierentiation confor$s to the practical dictates of 5ustice and e%uity and is not discri$inatory within the $eanin0 of the Constitution Nota/ly, the pu/lic purpose of a ta $ay le0ally eist even if the $otive which i$pelled the le0islature to i$pose the ta was to favor one over another It is inherent in the power to ta that a State is free to select the su/5ects of taation Ine%uities which result fro$ a sin0lin0 out of one particular class for taation or ee$ption infrin0e no constitutional li$itation
c
No, the S-T is NOT con4scatory nor oppressive The reasona/leness of Ordinance No S"&;() cannot /e disputed It is not con4scatory or oppressive since the ta /ein0 i$posed therein is /elow what the D9-# actually allows Bhile the law authorizes A1Ds to collect S-T on lands with an assessed value of $ore than ")(,(((((, the %uestioned ordinance only covers lands with an assessed value eceedin0 ".((,((((( Even /etter, on certain conditions, the ordinance 0rants a ta credit e%uivalent to the total a$ount of the special assess$ent paid /e0innin0 in the sith 'th+ year of its eectivity ?ar fro$ /ein0 o/noious, the provisions of the su/5ect ordinance are fair and 5ust
Fac'(: "etitioner, a QC property owner, assails the constitutionality of two QC ordinances, na$ely Ordinance No S"&;(), S&;(.. or the Socialized -ousin0 Ta of Quezon City and Ordinance No S"&;;3), S&;(.3 on 0ar/a0e collection fees Section 3 of S"&;() provides: SECTION 3 I!"OSITION # special assess$ent e%uivalent to one&half percent '()*+ on the assessed value of land in ecess of One -undred Thousand "esos '"hp.((,(((((+ shall /e collected /y the City Treasurer which shall accrue to the Socialized -ousin0 "ro0ra$s of the Quezon City 1overn$ent The special assess$ent shall accrue to the 1eneral ?und under a special account to /e esta/lished for the purpose 'ie, pro0ra$s and pro5ects for low&cost housin0 and other $ass dwellin0s+ On the other hand, Ordinance No. SP-22#! S-20"# on 0ar/a0e collection places the rates of the i$posa/le fee dependent on the land or @oor area and whether the payee is an occupant of a lot, condo$iniu$, social housin0 pro5ect or apart$ent ; I(()e(: . BON S"&;(), S&;(.. on the Socialized -ousin0 Ta 'S-T+ is valid a BON the S-T is a ta which is within the QC 0overn$ent to i$pose / BON the S-T violates the rule on e%uality c BON the S-T is con4scatory or oppressive ; BON S"&;;3), S&;(.3 on 1ar/a0e ?ee is valid a BON the Ordinance on 1ar/a0e ?ee violates the rule on double taxation. / BON it violates the rule on e%uality R)*in+: . S"&;(), S&;(.. on the Socialized Housing Tax 'S-T+ is #AI9 a
Jes The S-T char0ed /y the QC 1overn$ent is a ta which is within its power to i$pose Cities are allowed to eercise such other powers and
S"&;;3), S&;(.3 on 1ar/a0e ?ee is IN#AI9 #lthou0h it does not violate the rule on dou/le taation, it nonetheless violates the rule on e%uality a
S"&;;3) does NOT violate the rule on dou/le taation The fee i$posed for 0ar/a0e collections under Ordinance No S"&;;3) is a char0e 4ed for the re0ulation of an activity In Progressive Developent Corporation v. Quezon City , the Court declared that 2if the 0eneratin0 of revenue is the pri$ary purpose and re0ulation is $erely incidental, the i$position is a ta8 /ut if re0ulation is the pri$ary purpose, the fact that incidentally revenue is also o/tained does not $a7e the i$position a taK In a DS case, the 0ar/a0e fee was considered as a Hservice char0eH rather than a ta as it was actually a fee for a service 0iven /y the city which had previously /een provided at no cost to its citizens
-ence, not /ein0 a ta, the contention that the 0ar/a0e fee under Ordinance No S"&;;3) violates the rule on dou/le taation $ust necessarily fail /
Jes, S"&;;3) violates the rule on e%uality ?or the purpose of 0ar/a0e collection, there is, in fact, no su/stantial distinction /etween an occupant of a lot, on one hand, and an occupant of a unit in a condo$iniu$, socialized housin0 pro5ect or apart$ent, on the other hand !ost li7ely, 0ar/a0e output produced /y these types of occupants is unifor$ and does not vary to a lar0e de0ree8 thus, a si$ilar schedule of fee is /oth 5ust and e%uita/le The rates /ein0 char0ed /y the ordinance are un5ust and ine%uita/le: a resident of a ;(( s% $ unit in a condo$iniu$ or socialized housin0 pro5ect has to pay twice the a$ount than a resident of a lot si$ilar in size8 unli7e unit occupants, all occupants of a lot with an area of ;(( s% $ and less have to pay a 4ed rate of "hp.((((8 and the sa$e a$ount of 0ar/a0e fee is i$posed re0ardless of whether the resident is fro$ a condo$iniu$ or fro$ a socialized housin0 pro5ect
Indeed, the classi4cations under Ordinance No S&;;3) are not 0er$ane to its declared purpose of 2pro$otin0 shared responsi/ility with the residents to attac7 their co$$on $indless attitude in over&consu$in0 the present resources and in 0eneratin0 wasteK Instead of si$plistically cate0orizin0 the payee into land or @oor occupant of a lot or unit of a condo$iniu$, socialized housin0 pro5ect or apart$ent, respondent City Council should have considered factors that could truly $easure the a$ount of wastes 0enerated and the appropriate fee for its collection ?actors include, a$on0 others, household a0e and size, accessi/ility to waste collection, population density of the /aran0ay or district, capacity to pay, and actual occupancy of the property 5$EREFORE, the petition is PARTIA%%Y 6RANTE& The constitutionality and le0ality of Ordinance No S"&;(), S&;(.., or the 2 Socialized Housing Tax of Quezon City ,K is SUSTAINE& for /ein0 consistent with Section L3 of Gepu/lic #ct No <;< On the other hand, Ordinance No S"&;;3), S&;(.3, which collects an annual 0ar/a0e fee on all do$estic households in Quezon City, is here/y declared as UNCONSTITUTIONA% AN& I%%E6A% Gespondents are &IRECTE& to REFUN& with reasona/le dispatch the su$s of $oney collected relative to its enforce$ent
