Office of the City Treasurer

January 20, 2017 BIR RULING NO. 006-17 RA 7279; BIR Ruling No. 351-2015; BIR Ruling No. 360-2013 Office of the City Treasurer City of Bogo, Cebu Attention: Mr. Julio S. Ursonal, Jr. City Treasurer Gentlemen : This refers to your letter dated September 8, 2014, as indorsed to this office by the Regional Director of Revenue Region No. 13, Cebu City requesting exemption from the capital gains tax (CGT) pursuant to the provisions of Republic Act (RA) No. 7279 or the "Urban Development and Housing Act of 1992," on the sale of a parcel of land by AAA, married to BBB in favor of the City of Bogo for the benefit of the indigent informal settlers who were victims of Super Typhoon Yolanda. Documents submitted show that AAA, married to BBB is the registered owner of a parcel of land located at Barangay Marangog, Bogo City, Cebu covered by Transfer Certificate of Title (TCT) No. 58968 (with an area of 22,017 sq.m.) of the Registry of Deeds for the Province of Cebu. On October 6, 2014, AAA executed a Deed of Absolute Sale over the said parcel of land in favor of the City Government of Bogo for the amount of P__________ for the purpose of establishing a resettlement site for Typhoon Yolanda victims. Based on the Certificate of Participation dated June 30, 2014 issued by the City Mayor of Bogo, AAA had participated to the Resettlement/Socialized Housing Program of Bogo City for the indigent victims of Super Typhoon Yolanda. Her valuable participation pertains to her willingness and voluntary agreement to sell at cheap price her piece of land intended as a relocation for the afore-stated beneficiaries. 1 Per Resolution No. 103-2014, the City Council of Bogo authorized the acquisition of the aforesaid land for the purpose of establishing a resettlement site for the survivors of Typhoon Yolanda. CAIHTE In reply, please be informed that pursuant to Section 20 of RA No. 7279, pertinent portions of which state that: "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 2) Capital gains tax on raw lands used for the project; xxx xxx xxx" the owner of the raw land is exempt from the payment of the CGT or the withholding tax under Revenue Regulations No. 2-98, as amended, on the conveyance of a parcel of land which shall be utilized for a socialized housing project. Such being the case, the sale of the parcel of land covered by TCT No. 58968 of the Registry of Deeds for the Province of Cebu, which shall be utilized as resettlement for the indigent informal settlers who were survivors of Super Typhoon Yolanda is exempt from the CGT. (BIR Ruling No. 360-2013 dated September 30, 2013) However, the sale is subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended, based on the actual consideration contracted to be paid for such realties. Upon application for exemption, a lien on the title of the land shall be annotated by the Register of Deeds having jurisdiction over the property, to the effect that the same are to be applied or are being applied to a socialized housing project pursuant to RA 7279. (BIR Ruling No. 351-2015 dated October 8, 2015) Please take note that this ruling is never intended and shall not be construed as giving authority to the concerned Register of Deeds to effect transfer of the land in the name of the buyer without the necessary certificate of authority to register issued by this Bureau. In this regard, this ruling shall be presented to the Revenue District Office (RDO) concerned in order for the latter to issue the CAR after the submission of the requirement provided under Revenue Memorandum Order (RMO) No. 15-2003, including proof of payment of documentary stamp tax. 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. DETACa Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Qualified recipients are all Typhoon Yolanda survivors and are listed in the attached "Annex 1" hereof.