Exemption from Documentary Stamp Tax - Affidavit of Non-Redemption for Consolidation of Ownership

March 27, 1990 BIR RULING NO. 037-90 196 304-88 037-90 Gentlemen : This refers to your letter dated January 16, 1990 requesting in effect a ruling as to whether or not the Affidavit of Consolidation of Ownership of a parcel of land covered by TCT No. 129291 situated at Muntinlupa, Metro Manila, which you acquired in a mortgage foreclosure sale on February 29, 1988 as highest bidder, is still subject to documentary stamp tax where the required capital gains tax and documentary stamp tax on the Sheriff's Certificate of Sale were both paid on March 22, 1988. cdta It is represented that you were the highest bidder on a parcel of land covered by TCT No. 129291 registered in the name of the mortgagors, spouses Alejo Vinluan and Delilah A. Vinluan in a certain public auction sale conducted by the Sheriff of Muntinlupa, Metro Manila on February 29, 1988 with a bid price of P850,000.00; that you paid the required capital gains tax and documentary stamp tax on the Sheriff's Certificate of Sale issued in your favor on March 22, 1988 as shown in BIR Certificate Authorizing Registration No. 483229; that due to the failure of the aforenamed mortgagors to redeem their property within the period of redemption granted by law, you executed an Affidavit of Consolidation of Ownership over the aforesaid parcel of land; and that upon filing the said affidavit with the Register of Deeds of Makati, you are again being required to pay the same documentary stamp tax you paid on March 11, 1988 on the ground that your first payment was in compliance with Revenue Memorandum No. 103-87 while the present requirement is due to Revenue Memorandum No. 016-88. In reply, please be informed that the document subject to documentary stamp tax imposable on deeds of sale and conveyance of real property under Section 196 of the Tax Code, as amended, is the Sheriff's Certificate of Sale (Sec. 166, Revenue Regulations No. 26 or the Revised Documentary Stamp Tax Regulations). Section 173 of the Tax Code, as amended provides that the corresponding documentary stamp taxes shall be paid at the time the act is done or transaction had." The implication is that the documentary stamp shall be affixed to the taxable document at the time it is issued or executed. Such being the case, and since you have already paid the documentary stamp tax on the Sheriff's Certificate of Sale issued in your favor being the highest bidder in the public auction sale conducted by the Sheriff of Muntinlupa, Metro Manila on February 19, 1988, the Affidavit of Non-Redemption for Consolidation of Ownership you executed due to the failure of the spouses Alejo Vinluan and Delilah A. Vinluan to redeem their property within the period of redemption granted by law is not subject to the documentary stamp tax imposable on deeds of sale and conveyance of real property. However, it is subject to the documentary stamp tax on Certificates which is P3.00 imposed under Section 188 of the Tax Code, as amended. (BIR Ruling No. 304-88). Very truly yours, (SGD.) JOSE U. ONG Commissioner