United Libis Homeowners Association, Inc. Phase I

January 21, 2016 BIR RULING NO. 041-16 Sec. 32, RA No. 7279; BIR Ruling No. 109-13; BIR Ruling No. 304-13 United Libis Homeowners Association, Inc. Phase I D. Bonifacio St., Canumay East, Valenzuela City Attention: Ma. Theresa L. Caramptana President Gentlemen : This refers to the letter of Eduardo T. Manicio, Executive Vice President of the Social Housing Finance Corporation (SHFC) dated May 27, 2015, endorsing the sale transaction between Philippine Veterans Bank and United Libis Homeowners Association, Inc. Phase I 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". aDSIHc Documents submitted disclose that Philippine Veterans Bank with Tax Identification Number 000-836-616-000 (hereinafter referred to as Landowner) is the registered owner of four (4) parcels of land covered by four (4) Transfer Certificates of Title (TCT): TCT No. Tax Declaration No. Lot No. Area (sq.m.) V-59874 C-033-01330 3 5,455 T-113461 C-033-00763 550-E-1 2,500 T-113463 C-033-00765 550-C-3-B-2 1,669 T-113459 C-033-00183 1463-B-1-A 202 total area 9,826 ======= all issued by the Registry of Deeds for the Valenzuela, Metro Manila. The aforesaid properties are situated at Canumay East, Valenzuela City. United Libis Homeowners Association, Inc. Phase I (TIN 416-262-460-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On March 27, 2015, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed the subject properties to United Libis Homeowners Association, Inc. Phase I at an agreed price of Fifteen Million Six Hundred Fifty Eight Thousand Four Hundred Sixty Five Pesos and 07/100 (P15,658,465.07). Pursuant to the certification issued by SHFC, 9,048.10 sq.m. out of 9,826 sq.m. covered by TCT Nos. V-59874, T-113461, T-113463 and T-113459 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, United Libis Homeowners Association, Inc. Phase I 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, United Libis Homeowners Association, Inc. Phase I has completely submitted on September 11, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that 9,048.10 sq.m. portion of the subject properties qualify and is actually a CMP project; 3) SHFC Letter-Guaranty No. 1024; 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 TCTs and Latest Tax Declarations of the Property 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: ETHIDa "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 landowner who sold its properties under CMP 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, Philippine Veterans Bank to United Libis Homeowners Association, Inc. Phase I of the 9,048.10 sq.m. out of 9,826 sq.m. covered by TCT Nos. V-59874, T-113461, T-113463 and T-113459 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 Certificate 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 property, to the effect that the said property shall be used for socialized housing pursuant to RA No. 7279. (BIR Ruling No. 109-13 dated March 21, 2013) 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 landowners are liable to pay the documentary stamp tax on the document conveying the afore-stated property 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 values determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 109-13 dated March 21, 2013) 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. 109-13 dated March 21, 2013) 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 9,048.10 sq.m. out of 9,826 sq.m. covered by TCT Nos. V-59874, T-113461, T-113463 and T-113459 by the landowner to United Libis Homeowners Association, Inc. Phase I is exempt from the imposition of VAT. (BIR Ruling No. 304-2013 dated August 6, 2013) 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 sellers are entitled to exemption from capital gains tax or income tax imposed under Sec. 24 (D) (1) 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 ascertained that the facts are different, then this ruling shall be considered as null and void. cSEDTC Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX United Libis Homeowners Association, Inc. Phase I D. Bonifacio St., Canumay East, Valenzuela City Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) 1 Caballero, Jimuel Calizo 1 1 21.95 2 Cabrera, Mario Pasaylo 1 2 40.47 3 Gam, Enerio Angcagon 1 3 45.69 4 Maldo, Jose Misal 1 4 57.01 5 Ysonza, Elizalde Boquecosa 1 5 56.58 6 Espera, Rolando Jr. Mendoza 1 6 42.01 7 Retes, Winston Banquiao 1 7 43.33 8 Pareja, Ana Marie Velarde 1 8 39.65 9 Cambaya, Edgar Orias 1 9 29.40 10 Gilig, Rico Manlapas 1 10 25.89 11 Toto, Lucita Salahid 1 11 30.25 12 Tuto, Rosie Bordomeo 1 12 23.97 13 Lance, Arjay Caracas 2 1 67.33 14 De Guzman, Dante Araas 2 2 52.57 15 Gamido, Dylen Pacultad 2 3 47.67 16 Virtudes, Jayson Matimtim 2 4 27.33 17 Cordova, Erlinda Miguel 2 5 27.21 18 Cansancio, Teodoro Jr. Teoso 2 6 36.12 19 Roldan, Olivia Collado 2 7 24.88 20 Gubuan, Conchita Roldan 2 8 34.74 21 Cuabo, Henry Larong 2 9 37.47 22 De Felix, Roland Sabang 2 10 46.16 23 Rafinian, Ramil Pinon 2 11 36.70 24 Raola, Beverly Castrudes 2 12 20.55 25 Jangit, Virginia Nequias 2 13 38.46 26 Yabao, Rodrigo Jr. Lopez 2 14 22.32 27 Alegado, Leonida Tagalog 3 1 43.97 28 De Guzman, Elsa Bautista 3 2 46.60 29 Gilig, Enry Ranes 3 3 73.39 30 Ladimo, Melania Yabao 3A 1 30.86 31 Yabao, Eduardo Lopez 3A 2 39.95 32 Filipino, Teresita Bagcal 3A 3 34.40 33 Filipino, Evelyn Villareal 3A 4 37.06 34 Cortez, Joel Buena 3A 5 32.11 35 Bautista, Ruth Estrada 3A 6 45.57 36 Bonifacio, Lauro Buban 3A 7 40.76 37 Bonifacio, Randy Buban 3A 8 33.29 38 Sumalinog, Jaqueline Magbago 3A 9 33.04 39 Vinluan, Liezl O. 3A 10 47.87 40 Vergara, Elwine Marcelino 3A 11 26.50 41 Dalida, Gilbert Peraman 3A 12 35.35 42 Bonifacio, Gerry Bolilan 3A 13 27.50 43 Valladolid, Purisima Sabalboro 3A 14 80.11 44 Laude, Eutemia Galiposo 4 1 34.85 45 Mahilum, Cecilia Rafael 4 2 31.41 46 Ursabia, Rodito Espinosa 4 3 30.13 47 Khan, Regina Monzon 4 4 33.96 48 Pante, Jacqueline Dava 4 5 25.14 49 De Felix, Jannet Mabuhay 4 6 24.05 50 Dela Cruz, Rene Flores 4 7 33.03 51 Villanueva, Anthony Gallano 4 8 50.18 52. Gutierrez, Paulito Sr. Monggosira 4 9 52.07 53 Rosales, Jackielou Blanca Olayta 4 10 53.42 54 Jusi, Nievez Ortiz 4 11 27.91 55 Prestoza, Gellisa Pongpong 4 12 37.70 56 Pongpong, Julio Climaco 4 13 54.98 57 Gipit, Abelardo Livantino 5 1 26.43 58 Morales, Mariano Callaycay 5 2 48.08 59 Bernales, Restituto Bual 5 3 51.75 60 Luna, Maricel Libres 5 4 48.25 61 Perion, Grace Flores 5 5 37.44 62 Ariola, Rowena Garcia 5 6 37.52 63 Logroo, Josefina Albialde 5 7 32.87 64 Vallega, Leona Olasiman 5 8 34.41 65 Reynon, Aniceto Prieto 5 9 44.80 66 Francisco, Marilyn Rosendal 5 10 52.17 67 Caracas, Florante Reomales 5 11 43.10 68 Farook, Fatima Pagcu 5 12 44.46 69 Bajarias, Gilbert Capa 5 13 32.47 70 Placencia, Marvi Pata 5 14 33.08 71 Gayas, Rommel Gulmatico 5 15 73.49 72 Jabonete, Bibiano Abalencia 5 16 21.88 73 Orphiano, Angelo Dela Pea 5 17 31.72 74 Renegado, Rodante Cogueron 5 18 45.45 75 Bitualia, Juanita Claveria 6 1 48.37 76 Arcega, Fernando Opeda 6 2 29.52 77 Estolano, Lumy Buyo 6 3 48.37 78 Dalagan, Aiza Estolano 6 4 48.10 79 Baldovino, Ruben Sibulo 6 5 45.00 80 Daniel, Melvin Villaruz 6 6 74.64 81 Estolano, Merlina Narciso 6 7 62.22 82 Palaypayon, Edgar Pilapil 7 1 46.29 83 Camino, Jennet Manalang 7 2 80.98 84 Obrigue, Bernabe Bernales 7 3 71.46 85 Regalado, Emilia Gilig 7 4 27.47 86 Gonzales, Michael Dela Pea 7 5 64.15 87 Unarce, Rene Sitcharon 7 6 51.01 88 Malicdem, Macarthur Bautista 7 7 29.11 89 Fontanilla, Elizabeth Vinluan 7 8 22.92 90 De Guzman, Isabel Bautista 7 9 52.90 91 Bitualia, Arnie Anala 7A 1 44.31 92 Cosmiano, Rene Rebuera 7A 2 16.74 93 Labante, Avelino Ocasla 7A 3 36.78 94 Unarce, Carlo John Bernales 7A 4 33.09 95 Dava, Ronald Nierra 7A 5 52.40 96 Fontanilla, Jenely Nacor 7A 6 30.67 97 Unarce, Candelaria Bernales 7A 7 32.84 98 Dandayanan, Lovelian Ventura 7A 8 53.93 99 Fontanilla, Ernesto Jr. Soon 7A 9 23.03 100 Fontanilla, Gaylord Soon 7A 10 23.05 101 Ayag, Arnel Lagarto 7A 11 31.99 102 Panelo, Anjo Maldo 7A 12 72.78 103 Cabubas, Michael Cruz 7A 13 36.82 104 Dalagan, Aiko Marie Estolano 8 1 66.88 105 Bagabaldo, Nelson Galapin 8 2 70.70 106 Obguia, Zyra Estolano 8 3 40.45 107 Dava, Leo Nierra 8 4 29.14 108 Rubiso, Fernando Deverla 8 5 57.78 109 Amor, Trixie Dela Pea 8 6 51.01 110 Torillo, Odelon Elisan 8 7 33.40 111 Noriega, Samuel Taguinod 9 1 70.50 112 Sator, Lucio Narciso 9 2 28.27 113 Novenario, Marilou Pollero 9 3 44.31 114 Dela Pea, Reybie Cano 9 4 43.72 115 Antipasado, Derlina Dugang 9 5 91.37 116 Acevedo, Richard Federis 9 6 69.39 117 Ocampo, Jane Lobosana 10 1 66.62 118 Lerum, Jesson Maldo 10 2 33.65 119 Taada, Denia Mantes 10 3 26.02 120 Espinola, Chona Valer 10 4 32.26 121 Tongcua, April Aducal 10 5 32.29 122 Jaro, Glenn Dalida 10 6 47.48 123 Naboa, Alexis Ariola 10 7 80.20 124 Almonte, Madaline Paca 10 8 51.29 125 Saralde, Cristy Olivo 10 9 47.62 126 Aducal, Liza Duran 10 10 31.14 127 Aducal, Cresencio Bada 10 11 25.73 128 Viray, Sally Olivo 10A 1 40.55 129 Montuya, Liza Malunes 10A 2 41.25 130 Corpuz, Lailyn Lacuata 10A 3 29.96 131 Porten, Allan Concordia 10A 4 23.21 132 Aducal, Paz Maga 10A 5 16.51 133 Bernales, Lydia Felecio 10A 6 59.31 134 Garcia, Flordeliz Martin 10A 7 29.51 135 Yu, Renato Pico 10A 8 23.11 136 Villanueva, Perla Milan 10A 9 29.39 137 Apostol, Sheryl Singgit 10A 10 49.90 138 Tulabing, Mark Bryan Villanueva 10A 11 50.81 139 Gales, Jocelyn Singgit 10A 12 71.83 140 Carampatana, Ma. Theresa Lara 10A 13 30.37 141 Dagoc, Antonio Cainoy 11 1 29.59 142 Lorenzo, Ruben Amistoso 11 2 22.39 143 Mercado, Reynoso Pa 11 3 47.67 144 Edullantes, Dindo Tenebro 11 4 26.68 145 Sagut, Rene Reserba 11 5 42.50 146 Lopez, Jesusa Lerin 11 6 41.54 147 Tucong, Alex Villazon 11 7 41.72 148 Paz, Arnold Mendoza 11 8 41.91 149 Apolinario, Jocelyn Panaga 11 9 41.34 150 Apolinario, Ginalyn Panaga 11 10 41.51 151 Apolinario, Michelle Panaga 11 11 41.62 152 Delos Santos, Rodolfo Bien 11 12 38.14 153 Bien, Mia Rocel Menil 11 13 38.62 154 Pernitez, Diana Rose Monzon 11 14 30.49 155 Durano, Cecilio Jr. Lucero 11 15 44.76 156 Bombeo, Edwelo Cosare 12 1 40.70 157 Bombeo, Artemio Cosare 12 2 39.84 158 Lerin, Maximo Jr. Cervantes 12 3 32.60 159 Granada, Allan Tomboc 12 4 51.09 160 Cosare, Cresanta Dagoc 12 5 56.14 161 Cosare, Evelyn Cascabel 12 6 54.62 162 Agado, Rodelia Padernal 12 7 66.84 163 Oloya, Richard Libunao 12 8 62.75 164 Cervantes, Gemma Tumabang 12 9 69.12 165 Oloya, Rommel Libunao 12 10 23.85 166 Villojan, Harold Monotilla 12 11 37.08 167 Villojan, Eduardo Dolatre 12 12 35.63 168 Dizon, Roche Siazat 12 13 60.09 169 Carampatana, Ma. Luisa Lara 13 1 45.03 170 Carampatana, Edilberto Jr. Lara 13 2 45.71 171 Carampatana, Ma. Crisanta Lara 13 3 46.07 172 Visda, Annie Singgit 13 4 36.22 173 Quimno, Archer Cenas 13 5 28.61 174 Cidro, Honorio Amoyan 13 6 25.96 175 Layron, Gerald Pace 13 7 54.54 176 Layron, Joseph Pace 13 8 55.60 177 Limpioso, Carmen Manganohoy 13 9 33.94 178 Moran, Elmer San Antonio 14 2 51.13 179 Caracas, Alvin Camba 14 3 31.43 180 Callao, Leny Amad 14 4 26.30 181 Aum, Charles Romano 14 5 28.82 182 Legal, Annaliza Torzar 14 6 53.36 183 Palomata, Susana Legal 14 7 40.41 184 Duallo, Ric Eulogio 15 1 62.17 185 Suello, Noemi Orbigoso 15 2 46.20 186 Llabore, Belen Mariano 15 3 43.29 187 Cosare, Julito Pizarras 16 1 46.80 188 Delos Reyes, Glenda Pedro 16 2 45.90 189 Cortero, Gerardo Valenzuela 16 3 36.86 190 Brillante, Legario Portugisa 16 4 40.70 191 Delante, Mercy Baldoza 16 5 39.42 192 Villagracia, Elias Palcon 16 6 73.09 193 Espejo, Purisima Zamora 16 7 98.77 194 Igharas, Ariel Bernardo 16 8 29.55 195 Mendoza, Dieza Perion 16 9 40.55 196 Icotanim, Jayson Obalo 16 10 42.77 197 Red, Cherry Taller 16 11 34.53 198 Pabia, Ricky Morente 16 12 27.25 199 Langreo, Mylyn Pablo 16 13 23.95 200 Cabubas, Imelda Labong 16 14 34.61 201 De Guzman, Rolando De Vera 16 15 32.66 202 Solomon, Margierose Gambot 16 16 38.54 203 Gambot, Marvin Sindayen 16 17 62.50 204 Lerin, Rommel Sagut 16 18 46.69 205 Escalona, Helena Zausa 16 19 64.64 206 Novenario, Bonabel Pollero 17 1 80.38 207 Vergara, Sonifo Jr. De Vera 17 2 91.91 208 Adarayan, Reynaldo Pinca 17 3 72.22 209 Tabaloc, Dante Quiniones 17 4 60.28 210 Ponsica, Jeffrey Isik 17 5 57.83 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.