Practice question
A charitable hospital owns a compound. One identifiable portion is actually used for patient treatment, while another is leased to an unrelated retail business for commercial use. All rental income is devoted to the hospital's charitable work. The hospital claims that its charitable status and use of rental income exempt the leased portion from real property tax under Article VI, Section 28(3). Which is correct under Lung Center?
- Every parcel is exempt solely because the owner is charitable.
- Rental income devoted to charity automatically changes the leased property's actual use.
- The commercial leased portion is not exempt on that basis; the actual use of the property, not merely the income, controls.
- The hospital loses all charitable character and every possible exemption permanently.
- All hospital property is taxable solely because some patients pay.
Legal references
- 1987 Constitution, Article VI Section 28(3): https://lawphil.net/consti/cons1987.html
- Lung Center of the Philippines v. Quezon City, G.R. No. 144104, June 29, 2004, main decision: https://lawphil.net/judjuris/juri2004/jun2004/gr_144104_2004.html
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