BIR Ruling [DA-153-00]

March 14, 2000 BIR RULING [DA-153-00] 24 (D), 196, 188; 009-95; DA-153-2000 San Lorenzo Ruiz Builders and Developers Group, Inc. 18th Floor, One Magnificent Mile Building San Miguel Avenue, Ortigas Center Pasig City Attention: Ms . Beatriz Q . Sayson Manager, Sales and Documentation Department Gentlemen : This refers to your letter dated January 10, 2000 requesting for exemption from the payment of the documentary stamp tax imposed under Section 196 of the Tax Code of 1997 on the reconveyance of a property by the buyer thereof due to its failure to pay the consideration of the sale. It appears that San Lorenzo Ruiz Builders and Developers Group, Inc. (formerly Violago Builders, Inc.) is a real estate developer of low-cost housing units; that you are the owner of a parcel of land located at Barangay Bagong Silangan, Quezon City covered by Transfer Certificate of Title (TCT) No. 173649; that you executed a Deed of Absolute Sale on June 16, 1997 in favor of Eduardo S. Barrientos, married to Benilda A. Barrientos of the aforesaid property for and in consideration of Three Hundred Twenty Four Thousand Three Hundred Pesos (P324,300.00); that said property was thereafter registered in the name of the buyer as evidenced by TCT No. N-178197, but due to the latter's failure to pay the amortization thereof the above-mentioned sale was rescinded; and that a Deed of Reconveyance was executed by Eduardo S. Barrientos on December 16, 1998 reconveying the above-stated property in your favor. In reply, please be informed that since your sale of the above-described real property in favor of Eduardo S. Barrientos did not materialize due to his failure to pay the consideration thereof, this Office is of the opinion as it hereby holds that the said transfer is not subject to documentary stamp tax imposed under Section 196 of the Tax Code of 1997. Moreover, the execution of a Deed of Reconveyance being merely a formality of restoring title to the said property in the name of its true owner, hence without any consideration, is not likewise subject to the documentary stamp tax imposed under Section 196 of the same Code. However, the notarial acknowledgment to said Deed of Reconveyance is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. prcd Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)