Alsons Development & Investment Corporation

February 20, 2009 BIR RULING [DA-(DT-008) 113-09] Alsons Development & Investment Corporation 329 Bonifacio Street Davao City Attention: Ms. Rosvida A. Dominguez Executive Vice President Gentlemen : This refers to your letter, which was referred to this Office by Revenue Region No. 19, Davao City, by way of its 1st Indorsement dated July 30, 2008, requesting for a ruling that the transfer of property by Alsons Development & Investment Corporation (ALDEVINCO), as the Donor, to the City Government of Davao, as the Donee, is exempt from donor's tax in accordance with the Socialized Housing Program and pursuant to Section 20 (d) (5) of Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992." ESTAIH It appears that under R.A. No. 7279, developers of proposed subdivision projects are required to develop an area for socialized housing equivalent to at least 20% of the total subdivision area or total subdivision project cost at the option of the developer; that ALDEVINCO in adherence to said act for its subdivision project named Northcrest Subdivision and other projects it will develop in the future has offered to comply by donating land to the City Government to support the City's resettlement and socialized housing program for the underprivileged and homeless; that the Donor has identified 14.6570 hectares of properties covered by TCT No. T-420500 issued by the Registry of Deeds for the City of Davao, and its corresponding vicinity map to be the subject properties to be donated to the City Government of Davao in compliance with the 20% Balance Housing Act; and that on December 3, 2007, a Deed of Donation was executed by ALDEVINCO in favor of the City Government of Davao. In reply thereto, please be informed that pertinent portion of Section 20 of R.A. No. 7279 reads: "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater private sector participation in socialized housing and further reduce 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: xxx xxx xxx (5) Donor's tax for lands certified by the local government units to have been donated for socialized housing purposes. xxx xxx xxx" Considering that the above-mentioned property shall be used for socialized housing project of the City Government of Davao, the transfer by way of Deed of Donation by ALDEVINCO in favor of the City Government of Davao shall be exempt from the payment of donor's tax as prescribed in Section 20 (d) (5) of R.A. No. 7279. However, upon issuance of this letter of exemption, and registration of the document of donation, a lien upon the Certificate of Title of the land to be issued in the name of the Donee 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 project pursuant to R.A. No. 7279, as implemented by Revenue Regulations No. 17-2001. EHCaDS However, the deed of donation shall be subject to the documentary stamp tax of P15.00 imposed under Section 188 of the Tax Code of 1997, as amended. 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, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service