Tax Updates April 2022 (SyCipLaw Tax Issues And Practical Solutions (T.I.P.S) Vol. 17)

1. Is there a deposit requirement for assailing the validity of an auction sale conducted by a local government to satisfy real property taxes?

Generally, yes.

Section 267 of the Local Government Code of 1991 (LGC) provides, in part, that "[n]o court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under this Title until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2%) per month from the date of sale to the time of the institution of the action."

In Province of Bataan, et al. v. Hon. Escalada, Jr., et al. (G.R. No. 181311, November 24, 2021), the Supreme Court noted that: (1) the requirement for a deposit is jurisdictional and is an ingenious legal device to guarantee the satisfaction of the tax delinquency, with the local government unit keeping the payment on the bid price no matter the final outcome of