Atty. Anacleto Jr. Village Homeowners Association, Inc.

January 21, 2016 BIR RULING NO. 039-16 RA No. 7279; BIR Ruling No. 053-15 Atty. Anacleto Jr. Village Homeowners Association, Inc. Brgy. Espinosa, Masbate City Attention: Ruel A. Cortes President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated August 11, 2015, endorsing the sale transaction between Osmea Colleges, Inc. and Atty. Anacleto Jr. Village Homeowners Association, Inc. for exemption from the payment of Capital Gains Tax and other taxes in accordance with the Republic Act (RA) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992". cHDAIS Documents submitted disclose that Osmea Colleges, Inc. (TIN 000-561-025-000) (hereinafter referred to as Landowner) is the registered owner of a parcel of land, identified as Lot 2 of the consolidation-subdivision survey Pcs-05-001666, being a portion Lots 3 & 4, Pcs-05000772 covered by Transfer Certificate of Title (TCT) No. T-13308 issued by the Registry of Deeds for the Province of Masbate. The aforesaid property is situated at Brgy. Espinosa, Masbate City with an area of Twenty Three Thousand Eight Hundred Seventy Nine square meters (23,879 sq.m.), more or less. Atty. Anacleto Jr. Village Homeowners Association, Inc. (TIN: 429-951-461-000), on the other hand, is a homeowner's organization registered with the Housing and Land Use Regulatory Board (HLURB). On March 26, 2015, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed Six Thousand Six Hundred Eighty One square meters (6,681 sq.m.) portion of the subject property to Atty. Anacleto Jr. Village Homeowners Association, Inc. at an agreed price of Ten Million Twenty One Thousand Five Hundred Pesos (P10,021,500.00) under Community Mortgage Program (CMP) of the SHFC. Pursuant to the certification issued by SHFC, 6,681 sq.m. out of 23,879 sq.m. covered by TCT No. T-13308 actually comprise a CMP Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Atty. Anacleto Jr. Village Homeowners Association, Inc. secured a housing loan under the CMP, a financing assistance program of the SHFC, a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). Documentary Stamp Tax (DST) due on the sale has been paid. In support of its request, Atty. Anacleto Jr. Village Homeowners Association, Inc. has completely submitted on October 30, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that 6,681 sq.m. portion of the subject properties qualifies and is actually a CMP project; 3) Certified true copy of the Letter-Guaranty No. 1067; 4) Certified true copy of the Deed of Absolute Sale to the Community Association; 5) Certified true copy of the Articles of Incorporation of the Community Association; 6) Certified true copy of the Masterlist of Qualified Beneficiaries duly certified by the SHFC; 7) Certified true copies of the TCT and Latest Tax Declaration of the Properties Sold to the Community Association; 8) Certified true copy of the Location Plan of the Lot Sold to the Community Association; 9) TIN ID/BIR Certificate of Registration of the seller and the Homeowner Association; and 10) Other pertinent documents . In reply, please be informed that pursuant to Section 32 of RA No. 7279, pertinent portions of which state that: "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 by the landowner to Atty. Anacleto Jr. Village Homeowners Association, Inc. of the 6,681 sq.m. portion out of 23,879 sq.m. covered by TCT No. T-13308 is exempt from the capital gains tax. ISHCcT Upon issuance of this letter of exemption, and upon registration of the document of sale, a lien on the Certificates of Title of the land to be issued in the name of the Homeowners Association shall 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 RA No. 7279. (BIR Ruling No. 053-15 dated February 27, 2015) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 32 of RA 7279. Accordingly, the landowner is liable to pay the documentary stamp tax on the documents 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 realty or its fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 053-15 dated February 27, 2015) Moreover, under Section 109 (1) (P) of the Tax Code of 1997, as amended by R.A. 9337, the sale of real properties utilized for low-cost and socialized housing as defined by R.A. No. 7279 shall be exempt from value-added tax (VAT), thus, the sale of the 6,681 sq.m. portion out of 23,879 sq.m. covered by TCT No. T-13308 by the landowner to Atty. Anacleto Jr. Village Homeowners Association, Inc. is exempt from the imposition of VAT. (BIR Ruling No. 053-15 dated February 27, 2015) 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 RMO 15-2003. (BIR Ruling No. 053-15 dated February 27, 2015) Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the property 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. 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 Atty. Anacleto Jr. Village Homeowners Association, Inc. Brgy. Espinosa, Masbate City Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) 1 Villamor, Maria Theresa Y. 1 1 47.91 2 Yray, Maria Flavia A. 1 2 49.14 3 Yray, Antonio A. 1 3 49.14 4 Yray, Christopher A. 1 4 49.14 5 Laguardia, Leticia T. 1 6 56.51 6 Marco, Carlos L. 1 8 50.37 7 Marco, Ariel L. 1 9 50.37 8 Ubac, Edmar M. 1 11 61.43 9 Berano, Mary Ann M. 2 1 58.97 10. Menes, Noel G. 2 2 36.86 11 Cantonjos, Ma. Ruby M. 2 3 36.86 12 Menes, Aizel I. 2 4 66.34 13 Marco, Jhomar M. 2 5 39.31 14 Marco, Eda R. 2 6 39.31 15 Marco, Benjun R. 2 7 38.09 16 Tamar, Hilda A. 2 8 44.23 17 Ceninse, Heide A. 2 9 44.23 18 Alvarez, Edison P. 2 10 44.23 19 Zarandona, Yolanda P. 3 1 45.46 20 Peales, Charito G. 3 2 47.91 21 Guiz, Roberto Jr. F. 3 4 36.86 22 Conde, Roa G. 3 5 36.86 23 Ramirez, Arlene B. 3 6 70.03 24 Mirasol, Evelyn V. 3 7 119.17 25 Penales, Isidro G. 3 9 45.46 26 Penales, Jaime G. 3 10 45.46 27 Rabino, Elvira A. 4 2 27.03 28 Llamas, Arve Kate B. 4 3 65.11 29 Llamas, Arjay Marione B. 4 4 67.57 30 Mortiga, Bella L. 4 5 67.57 31 Marco, Mark Joseph R. 4 7 33.17 32 Saldivar, Anna G. 4 9 54.06 33 Peales, Jenny G. 4 10 55.29 34 Pamesa, Rowena B. 4 12 108.11 35 Verano, Isabelo F. 4 20 28.26 36 Verano, Dante Jr. L. 5 2 52.83 37 Hermosa, Marilou L. 5 3 43.00 38 Hermosa, Rommel L. 5 4 43.00 39 Hermosa, Romelita L. 5 5 43.00 40 Hermosa, Richard L. 5 6 43.00 41 Lerit, Antolin Jr. B. 5 7 68.80 42 Jeruta, Joemy L. 5 8 67.57 43 Publico, Rosemarie C. 7 2 66.34 44 Mitra, Marcel Jr. A. 7 3 29.49 45 Mitra, Christian A. 7 4 29.49 46 Mitra, Jean Cristy A. 7 5 30.71 47 Villanueva, Benlon C. 7 6 67.57 48 Colo, Perlita G. 7 8 27.03 49 Ramiso, Abraham C. 8 1 19.66 50 Atebagos, Rolly M. 8 2 25.80 51 Corral, Rio B. 8 3 38.09 52 Corral, Levi B. 8 4 36.86 53 Aguilar, Elena M. 8 5 22.11 54 Abejuela, Fe M. 8 6 22.11 55 Maxilum, Jose R. 8 7 22.11 56 Maxilum, Nestor R. 8 8 22.11 57 Maxilum, Jelly R. 8 9 22.11 58 Atibagos, Rowil M. 8 10 25.80 59 Dignos, Rogen Jan R. 8 11 20.89 60 Jimenez, Rizaldy DR. 8 12 25.80 61 Racelis, Rosie J. 8 13 25.80 62 Delos Santos, Allan N. 8 14 38.09 63 Nacional, Marina D. 8 15 39.31 64 Oliva, Marino D. 8 16 50.37 65 Atibagos, Jeanelyn M. 8 17 46.69 66 Cos, Ruel B. 8 18 14.74 67 Nacional, Jelito B. 8 19 18.43 68 Dionela, Maricel G. 8 20 50.37 69 Luba, Elmer H. 8 21 44.23 70 Goo, Lynn G. 9 1 30.71 71 Goo, Grace G. 9 2 23.34 72 Placencia, Norberto B. 9 3 38.09 73 Lozada, Hilda D. 9 4 51.60 74 Torres, Estrella E. 9 5 33.17 75 Nacional, Arnel D. 9 6 44.23 76 Andaya, Zaldy Jr. D. 9 9 61.43 77 Andaya, Francis D. 9 10 50.37 78 Andaya, Isagani D. 9 11 56.51 79 Cortes, Ruel A. 9 12 38.09 80 Placencia, Jesus B. 9 13 38.09 81 Pumpac, Fe A. 9 14 36.86 82 Cristobal, Virgilio D. 10 1 49.14 83 Nacional, Allan C. 10 2 41.77 84 Nacional, Nancy C. 10 3 41.77 85 Balbuena, Ruben Jr. A. 10 4 50.37 86 Balbuena, Ruben Sr. L. 10 5 44.23 87 Nakamura, Joy V. 11 1 52.83 88 Verano, Joel A. 11 2 54.06 89 Formacil, Arnulfo R. 11 3 45.46 90 Dalanon, May Ann C. 11 5 34.40 91 Dalanon, Melchor V. 11 7 43.00 92 Rivera, Marichu D. 12 1 87.23 93 Dalanon, Imelda V. 12 2 87.23 94 Dalanon, Shirley V. 12 3 89.69 95 Bayon, Albert G. 13 1 57.74 96 Garcia, Eduardo L. 14 1 33.17 97 Cuevas, Allan G. 14 3 45.46 98 Cuevas, Zaldy G. 14 4 46.69 99 Cuevas, Arwin G. 14 5 46.69 100 Cuevas, Benedict G. 14 6 46.69 101 Cuevas, Catherine G. 14 7 46.69 102 Cuevas, Raffe G. 14 8 46.69 103 Lupague, Jerlyn P. 14 9 46.69 104 Lupague, Jinky P. 14 10 46.69 105 Abia, Ricky B. 15 1 47.91 106 Bico, Jovy V. 15 2 15.97 107 Lagco, Gemma A. 15 3 38.09 108 Atibagos, Levinido A. 15 4 58.97 109 Soriano, Rafael B. 15 5 40.54 110 Puntay, Argie S. 15 6 23.34 111 Liao, Antonio Jr. C. 15 7 47.91 112 Dulla, Connie L. 15 8 46.69 113 Liao, Mark Anthony C. 15 9 89.69 114 Cambaya, Minerva C. 15 10 27.03 115 Libot, Margie A. 15 11 31.94 116 Libot, Sergio C. 15 12 30.71 117 Encabo, Nesel A. 15 13 31.94 118 Altiche, Jonalyn A. 15 14 33.17 119 Tabigue, Bonifacio A. 15 15 46.69 120 Cambaya, Mark Angelo C. 15 17 25.80 121 Amican, Rosalinda B. 16 2 63.89 122 Briaga, Meriam A. 16 3 54.06 123 Briaga, Mara M. 16 4 54.06 124 Bajar, Monique M. 16 6 44.23 125 Briaga, Ros C. 16 7 44.23 126 Amican, Christopher B. 16 8 49.14 127 Gohilde, Chryzelle A. 16 9 49.14 128 Abayon, Crisenciano B. 17 2 38.09 129 Abayon, Jose Sr. M. 17 4 43.00 130 Abayon, Jose III G. 17 5 46.69 131 Abayon, Jose Jr. G. 17 6 39.31 132 Tuzon, Cynthia R. 18 1 41.77 133 Tuzon, Marylin R. 18 2 40.54 134 Rivera, Rossana E. 18 3 51.60 135 Rivera, Jennylen E. 18 4 55.29 136 Rivera, Jerson U. 18 6 70.03 137 Rivera, Lorena M. 18 7 25.80 138 Abayon, Charito E. 18 8 46.69 139 Abayon, Felisicimo Sr. B. 18 9 33.79 140 Abayon, Christine S. 18 10 33.17 141 Lupango, Fely R. 18 12 25.19 142 Tuzon, Cherry Lin R. 18 13 40.54 143 Hernandez, Barbara C. 19 1 47.91 144 Hernandez, Jennifer C. 19 2 46.69 145 Averilla, Lawrence Joseph D. 19 3 24.57 146 Hernandez, Sherwin C. 19 4 46.69 147 Santos, Michelle C. 19 5 47.91 148 Cabug, Pamela Joyce T. 19 6 46.69 149 Hernandez, Joy C. 19 7 47.91 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.