Practice question
A charitable hospital leases an identified portion of its land to a private commercial garden business. It uses the rental income for charity. Under Lung Center, does that use of rental income alone exempt the leased portion from real property tax?
- Yes, because income use always substitutes for property use.
- Yes, because every property of a charity is exempt.
- Yes, because a lease cannot affect actual use.
- No. The commercial use of the leased property cannot be replaced by the charitable use of rent.
- No, and every other hospital portion necessarily loses exemption.
Legal references
- RA 7160, Section 234; https://lawphil.net/statutes/repacts/ra1991/ra_7160_1991.html
- Lung Center of the Philippines v. Quezon City, G.R. 144104, June 29, 2004, main decision; https://lawphil.net/judjuris/juri2004/jun2004/gr_144104_2004.html
Answer this question in flashcards to review your response and continue practicing.