BIR Ruling No. 017-13

January 10, 2013 BIR RULING NO. 017-13 RA No. 7279; BIR Ruling No. 130-10; BIR Ruling No. 040-10 Maura Rotary Village Homeowners Association, Inc. Maura Rotary Village Maura, Aparri, Cagayan Attention: Delia A. Pamittan President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation dated August 13, 2012, requesting tax exemption from the payment of Capital Gains Tax and other taxes in accordance with the Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992. DHTECc It appears that Maura Community Multi Purpose Cooperative with Tax Identification Number 416-393-907-000, is the registered owner of parcels of land covered by four (4) Transfer Certificates of Title, to wit: TCT No. Area (sq.m.) Tax Declaration No. 032-2012000539 278 16415 032-2012000540 963 16416 032-2012000541 1,020 16413 032-2012000543 17,521 16414 issued by the Registry of Deeds for Tuguegarao, Cagayan. The aforesaid properties are situated at Brgy. Maura, Aparri, Cagayan. Maura Rotary Village Homeowners Association, Inc. on the other hand, is a homeowner's organization registered with the Home Insurance and Guaranty Corporation (HIGC) with Tax Identification No. 409-739-428-000. On July 22, 2012, the parties executed a Deed of Absolute Sale whereby the owner transfers and conveys sixteen thousand nine hundred thirty square meters and fifty square decimeters (16,930.50 sq.m.) of the subject properties to Maura Rotary Village Homeowners Association, Inc. at an agreed price of Eighteen Million Six Hundred Twenty Three Thousand Five Hundred Fifty Pesos (P18,623,550.00). Pursuant to a certification issued by Social Housing Finance Corporation, sixteen thousand nine hundred thirty square meters and fifty square decimeters (16,930.50 sq.m.) of the properties covered by TCT Nos. 032-2012000539, 032-2012000540, 032-2012000541 and 032-2012000543 are actually a CMP Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Maura Rotary Village Homeowners Association, Inc. secured a housing loan under the Community Mortgage Program (CMP), a financing assistance program of the Social Housing Finance Corporation (SHFC) a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). In reply, please be informed that pursuant to Sections 20 and 32 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: (d) Exemption from the payment of the following: (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" the landowners who sold their properties for use in a socialized housing project are exempt from the payment of capital gains tax. Such being the case, the sale of the aforestated properties by the owner to Maura Rotary Village Homeowners Association, Inc., in so far as the sixteen thousand nine hundred thirty square meters and fifty square decimeters (16,930.50 sq.m.) portion thereof of the properties covered by TCT Nos. 032-2012000539, 032-2012000540, 032-2012000541 and 032-2012000543 is concerned is exempt from the capital gains tax. Upon issuance of this letter of exemption, and upon registration of the document of sale, a lien on the Certificates of Title of the lands to be issued in the name of the Homeowners Association shall be caused to be annotated by the Register of Deeds having jurisdiction over the properties, to the effect that the said properties shall be used for socialized housing pursuant to R.A. No. 7279. (BIR Ruling No. 130-10 dated December 1, 2010) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Secs. 20 and 32 of RA 7279. Accordingly, the seller is liable to pay the documentary stamp tax on the document conveying the afore-stated properties imposed under Section 196 of the Tax Code of 1997, based on the consideration contracted to be paid for such realties or their fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 130-10 dated December 1, 2010) It is, however, understood 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 titles 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 Certificate Authorizing Registration (CAR). The CAR shall only be issued after the submission of the requirements provided under RMO15-2003. (BIR Ruling No. 040-10 dated August 27, 2010) Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the properties transferred under the CMP are qualified beneficiaries and therefore, the seller is entitled to exemption from capital gains tax or income tax imposed under the Tax Code of 1997. DSTCIa This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX Maura Rotary Village Homeowners Association, Inc. Maura Rotary Village Maura, Aparri, Cagayan Name of Beneficiary Blk. No. Lot No. Total Area (sq.m.) 1 BERMEJO, CARLOS ROEL R. 1 1 51.0701 2 TALOZA, VINCENT RAYRAY 1 2 41.3067 3 MIRANDA, JOYCE T. 1 3 146.4511 4 TABANGKURA, JULIE ANN T. 1 4 147.2021 5 TUMARU, JOEL D. 2 1 74.3521 6 CLARA, VILMA R. 2 2 75.1031 7 BAYDID, MICHELLE T. 2 3 96.8830 8 MALAPITAN, LIEZEL T. 2 4 78.8583 9 TOLENTINO, CHARLENE D. 2 5 105.8954 10 MALAZZAB, EDDIE C. 2 6 46.5639 11 MACUTAY, ALEX G. 3 1 59.3315 12 REBLANDO, APRIL P. 3 2 59.3315 13 PALATTAO, LEONORA D. 3 3 59.3315 14 AMPASO, AYONAN A. 3 4 74.3521 15 AGUAYO, RODEL M. 3 5 117.9119 16 CUNANAN, DANNY S. 3 6 75.1031 17 PALATTAO, ARNEL O. 3 7 64.5887 18 DUMLAO, PRIMROSE P. 3 8 63.8377 19 PALATTAO, CHARLES O. 3 9 64.5887 20 AGUADO, MARCELO T. 3 10 67.5928 21 LAMAN, LOTI O. 3 11 67.5928 22 TESORO, GLENMAR T. 3 12 58.5804 23 TESORO, MARIA T. 3 13 58.5804 24 MACUTAY, SABINA T. 3 14 60.0825 25 MALAZZAB, NESTOR C. 3 15 79.6093 26 OATE, JAYLENE L. 3 16 59.3315 27 OATE, JULIE L. 3 17 60.0825 28 OATE, JULIET P. 3 18 58.5804 29 IRIS, NIDA G. 3 19 68.3439 30 IRIS, ALVIN G. 3 20 68.3439 31 MALAZZAB, REGIENALD M. 3 21 46.5639 32 CLIMET, MARJHUN A. 3 22 63.8377 33 MALABAG, CHERRY M. 3 23 86.3686 34 MACUTAY, MAGNO A. 3 24 48.0660 35 BUJANGIN, ROMEO J. 3 25 57.0784 36 BUJANGIN, RAMIL J. 3 26 57.0784 37 AQUILEA MARICRIS V. 3 27 78.8583 38 VICTORIO, JACINTO S. 3 28 56.3274 39 VICTORIO, JENNELYN V. 3 29 56.3274 40 MABBUN, LEON M. 3 30 92.3769 41 AGUADO, FLORENTINA T. 3 31 58.5804 42 MAGUDDATU, CAROLYN S. 3 32 59.3315 43 AQUINO, CAROLYN B. 3 33 83.3645 44 ASIDDAO, ARMANDO B. 3 34 32.2943 45 ANDALLO, VILMA T. 3 35 57.8294 46 TORIDA, GERICK M. 3 36 58.5804 47 TORIDA, VENUS M. 3 37 58.5804 48 QUIZZAGA, MARLON SR.,N. 3 38 58.5804 49 JALAGAT, MANUEL V. 3 39 58.5804 50 MERAM, JOVITO A. 3 40 57.0784 51 MERAM, RICARTE A. 3 41 56.3274 52 NARCIDA, ARNEL V. 3 42 60.8335 53 BERMEJO, REMEDIOS T. 4 1 101.3892 54 TUZON, SAMMY P. 4 2 80.3604 55 DUMLAO, JAMER C. 4 3 54.0743 56 DUMALAO, JENNIFER C. 4 4 60.0825 57 DUMLAO, TEOFILO SR.,A. 4 5 61.5846 58 BALACANO, JASMIN S. 4 6 70.5969 59 BALACANO, MILAGROS S. 4 7 74.3521 60 PALATTAO, EDNALYN S. 4 8 59.3315 61 PALATTAO, REX S. 4 9 60.0825 62 PALATTAO, ERIC S. 4 10 72.8500 63 ALCANTARA, CECILIA T. 4 11 59.3315 64 PALATTAO, EVANGELINE R. 4 12 71.3480 65 ESPADA, JENELYN P. 4 13 57.8294 66 ESPADA, GENIE U. 4 14 57.0784 67 ESPADA, MONSOUR P. 4 15 57.0784 68 PALATTAO, DANNY O. 4 16 58.5804 69 PALATTAO, YORLIE MAE D. 4 17 58.5804 70 FURUGGANAN, JOMAR D. 4 18 58.5804 71 PALATTAO, VENUS N. 4 19 57.0784 72 PALATTAO, JEFFERSON 4 20 57.0784 73 PALATTAO, HARIS N. 4 21 56.3274 74 TUMARU, NICOLAS S. 4 22 72.0990 75 TUMARU, GLENN A. 4 23 71.3480 76 TUMARU, GLADYS A. 4 24 70.5969 77 AUSTRIACO, WILMA C. 5 1 63.0866 78 AUSTRIACO, AARON JAMES C. 5 2 63.8377 79 ARENQUE, REMA A. 5 3 63.8377 80 AUSTRIACO, ANTONETTE C. 5 4 63.8377 81 AUSTRIACO, ANGELO JAMES C. 5 5 63.0866 82 RITA, MANDING C. 5 6 57.8294 83 RITA, MARITES F. 5 7 58.5804 84 RITA, MELINDA C. 5 8 66.8418 85 TOLOSO, JUN JUN M. 5 9 66.8418 86 RITA, ERLINDA C. 5 10 66.8418 87 RITA, MARLON C. 5 11 54.8253 88 PALIUANAN, ROSEMARIE P. 5 12 55.5763 89 RITA, MARK JOHN M. 5 13 54.8253 90 ROMINA, EDGAR V. 5 14 54.8253 91 ROMINA, EDMUND O. 5 15 55.5763 92 PALATTAO, CESAR A. 5 16 62.3356 93 PALATTAO, JAY P. 5 17 63.0866 94 MALAZZAB, DIOSDADO S. 5 18 63.0866 95 PALATTAO, ESTALLONE P. 5 19 66.8418 96 AREOLA, WILSTERLITA A. 5 20 66.8418 97 ARQUILEDA, WILFREDO II A. 5 21 68.3439 98 ESTRELLA, DOMINADOR P. 5 22 120.9160 99 CALDERON, CRISTINA R. 5 23 62.3356 100 ADAP, JIMMY E. 5 24 60.0825 101 FURUGGANAN, GINA D. 5 25 74.3521 102 BANIEL, NESLYN D. 5 26 75.1031 103 DOROCA, GILBERT M. 5 27 75.1031 104 ALARIAO, ORLANDO P. 5 28 61.5846 105 LIBAN, BERNARDO P. 5 29 55.5763 106 VILLANUEVA, JOEL S. 5 30 65.3397 107 SINAMAG, MAY ANN I. 5 31 67.5928 108 VILLANUEVA, ANALYN S. 5 32 74.3521 109 VILLANUEVA, ROBERT P. 5 33 72.0990 110 MABALOT, CASAMIRA D. 5 34 71.3480 111 TUMARO, DARIO S. 5 35 108.8995 112 RACCA, IMELDA L. 5 36 34.5474 113 TUMARU, LEE JAY D. 6 1 86.3686 114 ARCE, ARICA JANE T. 6 2 86.3686 115 PABLO, FRANCES G. 6 3 87.1196 116 GUERRERO, PEDIE C. 6 4 88.6217 117 CLEMENTE, TOMASITO SR.,E. 6 5 54.8253 118 CLEMENTE, MICHAEL G. 6 6 54.8253 119 GUERRERO, VILMA M. 6 7 90.1238 120 TUMARU, ROMEL C. 6 8 61.5846 121 TUMARU, ROSELYN M. 6 9 60.8335 122 TUMARU, ARJAY M. 6 10 61.5846 123 CALLANGAN, GLORY S. 6 11 57.0784 124 GERALDE, LIZEL C. 6 12 58.5804 125 CALLANGAN, JOSEPH S. 6 13 55.5763 126 RESCAR, PHILIP C. 6 14 51.8212 127 VIERNES, JOJIE P. 6 15 51.0701 128 ALVARO, FALENCE JOY A. 6 16 51.0701 129 ALVARO, JACKROD A. 6 17 51.8212 130 ESTEBAN, CIRIACO G. 6 18 89.3727 131 CURUGAN, DANTE L. 6 19 62.3356 132 CURUGAN, CARMINA R. 6 20 57.8294 133 PURINGUE, FREDERIC A. 6 21 88.6217 134 VENTURA, MARYGINE P. 6 22 82.6134 135 SALINAS, MARVELYN P. 6 23 94.6300 136 TUMARU, JOSEPH D. 7 1 56.3274 137 TUZON, SHERBEE P. 7 2 56.3274 138 MALABAG, KERWIN JOHN P. 7 3 69.0949 139 CALANOGA, ROMANO M. 7 4 83.3645 140 CALANOGA, MAYQUEL B. 7 5 83.3645 141 QUIZZAGAN, BUTCH CLINTON F. 7 6 79.6093 142 NARCISO, JONALYN Q. 7 7 78.8583 143 BASILIO, ROBERTSON C. 7 8 79.6093 144 BASILIO, MICHELLE C. 7 9 54.8253 145 BASILIO, TERESITA C. 7 10 54.8253 146 VALDEZ, JOVELYN B. 7 11 84.1155 147 BAGARIN, AGNES A. 7 12 84.1155 148 SISTOZA, LUZVIMINDA A. 7 13 70.5969 149 PAMITTAN, DELIA A. 7 14 90.1238 150 PAMITTAN, BRYAN ANDREW A. 7 15 90.1238 151 AGTARAP, JOSEPHINE A. 7 16 111.9037 152 BATAN, REMBERTO S. 8 1 87.8707 153 BATAN, RAMON D. 8 2 71.3480 154 MAPE, FELY A. 8 3 71.3480 155 FURUGGANAN, PINSON S. 8 4 59.3315 156 ROGALES, ROVELYN T. 8 5 58.5804 157 BALAO, SALVACION T. 8 6 51.0701 158 TORRADO, BERNADETTE R. 8 7 67.5928 159 VIERNES, GLORIA A. 8 8 67.5928 160 TUSCANO, JOBERT B. 8 9 51.0701 161 DELAMEDA, DEMETRIO I. 8 10 72.0990 162 MALACCA, CORAZON C. 8 11 73.6011 163 DELAMEDA, TON TON O. 8 12 72.8500 164 SUMER, JASMIN JOY M. 8 13 72.0990 165 MACALENG, MARIO SR.,L. 8 14 51.0701 166 MACALENG, MARIO JR.,G. 8 15 51.8212 167 MACALENG, MARK G. 8 16 51.8212 168 PURINGUE, FREDELITO A. 8 17 89.3727 169 PURINGUE, MEDELYN P. 8 18 87.8707 170 CONDE, JAYSON E. 8 19 73.6011 171 BANASTAS, MAENARD 8 20 75.1031 JEFFERSON B. 172 SEBASTE, DOMINADOR U. 8 21 99.8872 173 SEBASTE, FRESNAIDA U. 8 22 99.1361 174 MACUTAY, ADRIAN M. 8 23 69.0949 175 MACUTAY, SABINA M. 8 24 69.0949 176 MACUTAY, ALDRIN M. 8 25 69.0949 177 ABBATUAN, JANETH B. 8 26 84.1155 178 OATE, REGIE B. 8 27 83.3645 179 ARELLANO, RICHARD SR.,A. 8 28 65.3397 180 ARELLANO, RICHARD JR.,O. 8 29 65.3397 181 ARELLANO, ROSELYN O. 8 30 67.5928 182 GUERRERO, MARITES P. 9 1 73.6011 183 UGOT, JERALDINE G. 9 2 60.0825 184 GAMBOA, LINA D. 9 3 60.8335 185 SUELO, EMILYN P. 9 4 60.8335 186 PALATTAO, JESUS G. 9 5 58.5804 187 PALATTAO, NELSON G. 9 6 58.5804 188 PALATTAO, NANETH C. 9 7 58.5804 189 FERNANDO, ELMER A. 9 8 60.0825 190 TESADO, GLORIA M. 9 9 58.5804 191 NIMER, REYMOND T. 9 10 60.0825 192 NIMER, GINA T. 9 11 61.5846 193 NIMER, RICHARD T. 9 12 60.8335 194 REYES, PRUDENCIO P. 9 13 106.6465 195 MACALENG, CRIS T. 10 1 63.8377 196 MACALENG, VICENTE JR.,T. 10 2 64.5887 197 MAPE, BELEN M. 10 3 63.8377 198 MACALENG, CONCEPCION A. 10 4 61.5846 199 MACALENG, AARON GLENN A. 10 5 61.5846 200 LOSA, MACARIO JR.,D. 10 6 62.3356 201 LOSA, HAROLD D. 10 7 60.0825 202 LOSA, JAYSON D. 10 8 60.0825 203 LOSA, MACARIO SR.,D. 10 9 60.0825 204 ALADA, PAUL JAYVEE R. 10 10 52.5722 205 ALADA, KEVIN JOHN R. 10 11 52.5722 206 PABLO, ALONA A. 10 12 52.5722 207 MACUTAY, IRENE U. 11 1 84.1155 208 MACUTAY, CAROLINA U. 11 2 84.1155 209 AMARILLO, MELODY M. 11 3 83.3645 210 NATIVIDAD, EDEN CRUZ 11 4 73.6011 211 MAPE, EDNALYN U. 11 5 65.3397 212 MAPE, OLIVER U. 11 6 63.0866 213 UNIDA, FRANCISCO T. 11 7 54.0743 214 UNIDA, ANGELITO T. 11 8 54.0743 215 RIVERA, LINDSEY M. 11 9 67.5928 216 RIVERA, SHERYL M. 11 10 68.3439 217 RIVERA, REMEDIOS M. 11 11 68.3439 218 JUNAS, JOYCE M. 12 1 83.3645 219 MAPE, DELFINA T. 12 2 83.3645 220 TUMARU, ALBINA G. 12 3 76.6052 221 GASCON, NELSON M. 12 4 75.8542 222 RAMOS, SEBASTIAN R. 12 5 74.3521 223 CALAGUI, ROLDAN JR.,A. 12 6 59.3315 224 CALAGUI, ANGELIE A. 12 7 59.3315 225 PABLO, GLENDA N. 12 8 72.8500 226 BILAG, ROWENA A. 12 9 74.3521 227 TUMARU, JAY-R U. 13 1 60.0825 228 BERSABE, ANA R. 13 2 60.0825 229 VILLANUEVA, DANILO C. 13 3 60.0825 230 SIBBALUCA, NENITA B. 13 4 64.5887 231 SIBBALUCA, FELIX M. 13 5 63.8377 232 LUNATO, MYLA S. 13 6 63.8377 233 TUMARU, EMELIE U. 13 7 55.5763 234 URTIZ, ERIC C. 13 8 54.8253 235 TUMARU, JESSICA O. 13 9 95.3810 236 FURIGAY, RONIE R. 13 10 63.0866 237 CARINO, LORETO T. 13 11 62.3356 238 TORIO, JOVEL C. 13 12 87.8707 239 PATINO, NIMFA M. 13 13 54.8253 240 PATINO, JENNIFER M. 13 14 54.8253 241 PATINO, NEMESIO JR.,M. 13 15 54.8253 242 PATINO, JERRY M. 13 16 54.8253 243 AGUSTIN, VILMAR S. 14 1 54.8253 244 AGUSTIN, MARIO S. 14 2 55.5763 245 AGUSTIN, VILLAMOR SR.,A. 14 3 55.5763 246 SIBBALUCA, ROGER M. 14 4 55.5763 247 CALAGUI, JERWIN L. 14 5 51.0701 248 CALAGUI, PERFECTO JR.,L. 14 6 51.0701 249 CALAGUI, ROWEL L. 14 7 51.0701 250 OATE, PHILIP M. 14 8 67.5928 251 OATE, PANTALEON M. 14 9 66.8418 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.