Challenging your property tax assessment

It is the two-stage procedure Article 7.065 of the Municipal Code establishes for objecting to the real property tax: first an administrative review before the Centro de Recaudación de Ingresos Municipales, the CRIM, and only afterwards a judicial challenge at the Court of First Instance. Alongside it sit two articles worth reading before disputing anything: 7.061, with the prompt-payment discounts, and 7.060, with the extension and payment plan for those who cannot pay.

Administrative review may be requested by a taxpayer who disagrees with the notice of assessment issued by CRIM, provided that within the same thirty-day term they comply with one of the two payment routes Article 7.065(a) requires. The extension and payment plan in Article 7.060 are for a taxpayer in gravely adverse economic circumstances that, in CRIM’s judgement, constitute undue hardship, and must be requested before the date the tax becomes delinquent.

• Requesting administrative review from CRIM in writing, stating the reasons for the objection, the amount believed correct and, if thought necessary, the corresponding evidence or documents (Article 7.065(a)).Verified against the official source
• Filing that request within thirty (30) calendar days from the date the tax notice was deposited in the mail and/or sent electronically (Article 7.065(a)).Verified against the official source
• Within that same term, paying CRIM one hundred per cent (100%) of the part of the annual tax agreed with and forty per cent (40%) of the part disputed; or paying the whole annual tax imposed (Article 7.065(a)(1) and (2)).Verified against the official source
• Completing the administrative review procedure as a prerequisite for judicially challenging the assessment decision (Article 7.065(a)).Verified against the official source
• Filing the judicial challenge at the Court of First Instance within thirty (30) calendar days from the deposit in the mail and/or the sending to the electronic address on file, whichever happens first (Article 7.065(b)).Verified against the official source
• Evidencing to the Court compliance with the corresponding tax payment (Article 7.065(b)).Verified against the official source
• For the extension or payment plan, requesting it before the date the real property tax becomes delinquent (Article 7.060).Verified against the official source

• The notice of assessment CRIM issues, which is what opens the thirty-day term (Article 7.065(a)).
• The written request for administrative review, with the reasons, the amount believed correct and any evidence or documents thought necessary (Article 7.065(a)).
• Evidence of the required payment, which must be shown to the Court at the judicial stage (Article 7.065(b)).
• The bond CRIM may require when granting an extension, for an amount no greater than twice the unpaid tax (Article 7.060).

1. 1

   Step 1: To dispute it you must pay first

   It is the condition that decides whether your objection exists at all, so it goes first. Article 7.065(a) allows requesting administrative review within thirty calendar days, “provided that the taxpayer, within that term”, does one of two things: pay CRIM one hundred per cent of the part of the annual tax they agree with and forty per cent of the part they do not; or pay the whole annual tax imposed. It is not a recommendation: the request is filed “provided that” payment has been made within the same period.

2. 2

   Step 2: Thirty days from when it was sent, not received

   The same subsection counts the term from the date the tax notice provided for in Article 7.046 of the Code was deposited in the mail and/or sent electronically. The clock starts when CRIM dispatches it, not when you open it. And the request must state the reasons for your objection, the amount you believe correct and include, if you think it necessary, the corresponding evidence or documents.

3. 3

   Step 3: Seeking review costs you the discount, with one way out

   Article 7.065(a) says a taxpayer who requests administrative review may not take the prompt-payment discount the Chapter provides, “except where they pay the whole annual tax imposed, within the terms prescribed by law to be entitled to the discount”. That is: the only way to dispute and keep the discount is to pay it all on time.

4. 4

   Step 4: The discounts: ten per cent and five per cent

   Article 7.061 sets them on the semester amount of the real property tax, if payment is made in the manner and within the corresponding term: ten per cent of the semester amount if payment is made within thirty days of the date the receipt was issued, and five per cent if made after thirty days but not exceeding sixty days from issue. The same article adds a calendar rule: where the due date falls on a Saturday, Sunday or holiday, the due date shall be the next working day.

5. 5

   Step 5: CRIM has sixty days, and its silence ratifies the bill

   Article 7.065(a) says CRIM must issue its decision within sixty days of the request being filed, and adds the consequence of silence: where CRIM does not answer within that term it is understood to ratify the tax estimate notified to the taxpayer. CRIM may extend the term by sixty additional days where it deems it necessary, those sixty additional days begin once the original term ends, and CRIM must notify you of that decision to extend within the first sixty days.

6. 6

   Step 6: What happens if you win or lose at the administrative stage

   The same subsection splits the two outcomes. Where CRIM’s decision is adverse, the taxpayer must pay the outstanding part of the tax, with the corresponding interest and surcharges, computed from the date the decision was notified. Where the decision is favourable, CRIM must credit or return the overcollected part of the tax, computed with the corresponding interest from the date the revised tax was paid, at the public-obligation interest rates set by the Office of the Commissioner of Financial Institutions.

7. 7

   Step 7: You cannot skip to court

   Article 7.065(a) closes with a sentence that orders the two stages: the administrative review procedure must be completed as a prerequisite for a taxpayer who disagrees with the assessment decision to challenge it judicially, as subsection (b) provides.

8. 8

   Step 8: Thirty days to go to the Court of First Instance

   Article 7.065(b) sets the term from the date of deposit in the mail and/or to the electronic address on the taxpayer’s file, whichever happens first, of the notice of CRIM’s determination. And it foresees silence: if CRIM issues no determination within sixty days of the filing, or did not notify the sixty-day extension, the taxpayer may challenge it before the Court within thirty calendar days counted from the day after that sixty-day term, original or additional as the case may be. On either route, the taxpayer must evidence to the Court their compliance with the corresponding tax payment.

9. 9

   Step 9: What the judgment may provide

   Article 7.065(b) describes both outcomes. If the Court’s decision is adverse to the taxpayer, it shall provide that the challenged tax, or the part deemed correctly imposed, be paid with the corresponding interest and surcharges from the date the judgment was notified. If favourable, it shall provide that the tax or the part the Court finds overcollected be returned, with interest at the public-obligation rates set by the Office of the Commissioner of Financial Institutions, computed from the date the overpaid tax was paid.

10. 10

    Step 10: CRIM carries two shields in the case

    The same Article 7.065(b) lists them plainly: CRIM shall be exempt from paying attorney’s fees for obstinacy or frivolity under the Rules of Civil Procedure, and punitive damages shall not be granted against CRIM either. The imposition of costs and fees shall be governed by the ordinary procedure. It is worth knowing before calculating what can be recovered in a case.

11. 11

    Step 11: If you cannot pay: eighteen months, plus twelve

    Article 7.060 opens that door with conditions. In gravely adverse economic circumstances of a taxpayer that, in CRIM’s judgement, constitute undue hardship, and provided it is requested before the date the tax becomes delinquent, CRIM is authorised to extend the time to pay without imposing surcharges, through a payment plan for a period not exceeding eighteen months and, in exceptional cases, for a further period not exceeding twelve months. CRIM may require a bond for an amount no greater than twice the unpaid amount. Interest at ten per cent a year is charged on every extension granted under that article. And if no bond was required and the taxpayer fails to meet the plan’s terms, they must also pay the surcharges prescribed by law from that failure onward.

12. 12

    Step 12: Above a hundred thousand, the municipality decides too

    Article 7.060 adds a control that is not widely known. Where the unpaid tax exceeds one hundred thousand dollars, before granting a payment plan or exoneration, CRIM’s Governing Board must obtain the authorisation of the municipality where the property is located; otherwise the transaction cannot proceed. CRIM notifies the municipality, which must state its opinion within the next ten business days. If the municipality does not do so within that term, CRIM’s Governing Board may continue without taking its approval into account. The final determination, whether by municipal approval or by the Board’s decision where the municipality stayed silent, shall be final, firm and binding on the parties.

Before the Centro de Recaudación de Ingresos Municipales, CRIM, which issues the notice of assessment, receives the administrative review request, decides within sixty days, grants the extension or payment plan and credits or returns what was overcollected. The judicial challenge is filed at the Court of First Instance. And where the debt exceeds one hundred thousand dollars, the municipality where the property sits intervenes with ten business days to state its position before CRIM’s Governing Board grants a payment plan or an exoneration.

• Requesting review without paying: the request stands “provided that”, within the same term, 100% of what is accepted plus 40% of what is disputed, or the whole amount, is paid.
• Counting the thirty days from when you received the letter: they run from the deposit in the mail or the electronic sending.
• Requesting review and expecting to keep the prompt-payment discount: it is kept only by paying the whole amount within the discount period.
• Confusing the two discounts: ten per cent within thirty days of the receipt, five per cent between thirty and sixty.
• Reading CRIM’s silence as a win: if it does not answer within sixty days it is understood to ratify its estimate.
• Not watching the extension: CRIM must notify you within the first sixty days if it is taking sixty more.
• Going straight to court: completing the administrative review is a prerequisite.
• Arriving in court without evidence of payment: Article 7.065(b) requires it.
• Counting on obstinacy fees against CRIM: the Act exempts it from those fees and from punitive damages.
• Requesting the payment plan once the debt is already delinquent: it must be requested before that date.
• Forgetting the plan’s interest: every extension under Article 7.060 carries ten per cent a year.
• Assuming CRIM decides alone when the debt tops a hundred thousand: there the municipality’s authorisation is needed, and it has ten business days to state its position.

These are the government pages this guide is based on.

• Municipios de Puerto Rico

  Municipios

  bvirtualogp.pr.gov