BIR Ruling [DA-234-02]

December 11, 2002 BIR RULING [DA-234-02] Legaspi Rosales Law Office 2F L & R Building Pasay Road, Makati City Attention: Atty. Ma. Filomena Legaspi-Rosales Gentlemen : This refers to your letter dated October 8, 2002 requesting for a reconsideration of BIR Ruling No. S-40-071-2001 dated August 29, 2001, particularly on the issue of the valuation of the parcel of land located at Amorsolo Street, San Lorenzo Village, Makati City, which is the subject matter of the tax-free exchange between Spouses Romulo and Salvacion Trinidad (transferor) and Sun East Continental Realty Corporation (transferee). It appears that the valuation for the said parcel of land that was used in the ruling was based on the zonal value issued by the Asset Valuation Division of this Bureau where the zonal value of a land located at San Lorenzo Village, Makati City is P40,000/sq.m.. However, you insist that the selling prices of houses and lots in San Lorenzo Village area are between P33,000 to P35,000 per square meters and not P40,000. You further insist that this is the asking price and not even the final consummated price which is usually lower noting that the prices of real estate since your application for a ruling in 2000 till present, have either remain flat or even decreased as a result of the financial crisis that occurred in the middle part of 1997. You submitted a Memorandum for Revision of Zonal Values approved by then Commissioner Beethoven L. Rualo, hereto attached as Annex "A", and a copy of the subdivision plan of San Lorenzo Village, Makati City, showing that No. 25 Amorsolo Street is located at the inner most area, hereto attached as Annex "B". In addition, you also want to know the basis of the fair market value of the land because the Revenue Officer of RDO-47, Makati City is imposing an additional documentary stamp tax to your client. In reply, please be informed that pursuant to the Memorandum for then Commissioner Beethoven L. Rualo dated May 24, 1999 issued by the Technical Committee on Real Property Valuation, the inner lots in San Lorenzo Village were classified as Residential Regular (RR) and re-valued from Forty Thousand Pesos (P40,000.00) per square meter to Thirty Thousand Pesos (P30,000.00) per square meter. aHIDAE Accordingly, page 2, paragraph 1 of BIR Ruling No. S-40-071-2001 dated August 29, 2001 is hereby amended and modified to read as follows: . . . that Spouses Romulo and Salvacion Trinidad is the registered owner of a parcel of land situated at #25 Amorsolo Street, San Lorenzo Village, Makati City; that the subject property is covered by Transfer Certificate of Title No. 418289 issued by the Registry of Deeds for the Province of Rizal containing an area of 743 sq.m.; that the acquisition cost of the above-mentioned property is P179,000.00; that the fair market (FMV) of the said property is P22,290,000.00 . . . (SGD.) MILAGROS V. REGALADO Assistant Commissioner Legal Service