BIR Ruling [DA-184-99]

March 25, 1999 BIR RULING [DA-184-99] Ms. Teresita T. Casal C/o Akbay-Akibat ng Buhay at Yaman Homeowners Association, Inc. Purok 6, Zone 8, Barangay Cupang Antipolo City Gentlemen : This refers to your letter dated March 15, 1999 requesting on behalf of the landowner, Ms. Maria Regina S. Yupangco for a ruling that the sale of her parcel of land to the National Housing Authority (NHA) for its socialized housing program under the Community Based Housing Program (CBHP) known as Magbalikatan Para sa Maunlad ng Pabahay (MMP) for the benefit of the homeless and underprivileged residents of Antipolo City, is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19, 20 and 32 of R.A. No. 7279, otherwise known as the "Urban Development and Housing Act of 1992." It appears that the landowner, Ms. Maria Regina S. Yupangco is the absolute and registered owner of a parcel of land located at Purok 6, Zone 8 Barangay Cupang, Antipolo City, covered by 317620 issued by the Registry of Deeds for Rizal with a total area of 8,874 square meters; that on March 3, 1999, a Memorandum of Agreement was entered into by and between the landowner, Ms. Maria Regina S. Yupangco and NHA whereby NHA has committed to purchase the above said property in favor of Akbay-Akibat ng Buhay at Yaman Homeowners Association, Inc.; that NHA as the sole housing production agency to meet the housing needs of the low and marginal income families in the urban areas, has developed an alternative mode of providing land tenure and access to illegal settlements, where organized communities of low income families are provided financial resources for the purpose of acquiring the land they occupy; that per Board Resolution No. 3629 dated February 20, 1997 and Board Resolution No. 3642 dated March 20, 1997, as an incentive to community resources to look up discounted land prices through a loan payable in a short term basis through the implementation of its MMP Program; that the Association has offered to buy and the Landowner is willing to sell said property at P425.00 per square meter or with a total amount of P3,771,450.00; that the Akbay-Akibat ng Buhay at Yaman Homeowners Association, Inc. is a non-stock, non-profit corporation duly registered with the Home Insurance Guaranty Corporation (HIGC); and that a Deed of Absolute Sale will be executed by the landowner, Ms. Maria Regina S. Yupangco in favor of the NHA whereby the former will transfer to the latter the above-mentioned parcel of land which has been identified as a viable site for a socialized housing project. In reply, please be informed that pursuant to Sections 19, 20 and 32 of R.A. No. 7279, pertinent portion of which reads: "SEC. 19. Incentives for the National Housing Authority . The National Housing Authority, being the primary government agency in-charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of the transfer certificates of title. (emphasis supplied) "SEC. 20. Incentives for Private Sector Participating in Socialized Housing . To encourage greater participation in socialized housing and further reduced the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: "xxx xxx xxx "(d) Exemption from the payment of the following: (1) Project-related income taxes; (2) Capital gains tax on raw lands used for the project; "xxx xxx xxx "SEC. 32. Incentives . To encourage its wider implementation, participants in the CMP shall be granted with the following privileges or incentives: "xxx xxx xxx "(b) Properties sold under the CMP shall be exempted from the capital gains tax; and "xxx xxx xxx" the conveyance to the NHA by the landowner, Ms. Maria Regina S. Yupangco of the above-mentioned parcel of land under the socialized housing program is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. No. 7279. Upon issuance of this letter of exemption, and upon registration of the documents of sale, a lien on the Certificate of Title of the said parcel of land, which shall be issued in the name of the NHA, shall be caused to be annotated by the Register of Deeds having jurisdiction over the property to the effect that the said property shall be used for socialized housing pursuant to R.A. No. 7279. (BIR Ruling No. DA102-98 dated June 22, 1998) LibLex 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)