Non-Taxability of Conveyances of Realty, Not in Connection With a Sale, to Trustees or Other Persons Without Consideration

February 16, 1987 BIR RULING NO. 045-87 209 000-00 045-87 Gentlemen : This refers to your letter dated September 24, 1986, requesting information as to whether the Deed of Assignment executed by you in favor of Cityland Condominium IV, Inc. is subject to documentary stamp taxes. It is represented that you are a corporation engaged in real estate business specifically sale and/or development of residential farmlot subdivisions, townhouses and condominium projects; that it has constructed Cityland Condominium IV in accordance with the Condominium Act: that inasmuch as majority of the units have already been sold out and more than fifty percent (50%) of the units have been fully paid by their respective buyers, you as the developer, assigned in favor of Cityland Condominium IV, Inc., the condominium corporation, all its rights, participation, title and interest over the land titles declared as part of the common area of the project, together with all the common areas in Cityland Condominium IV as well as the management of the condominium project for the common benefit of all unit buyers and/or owners. In reply, please be informed that "conveyances of realty, not in connection with a sale, to trustees or other persons without consideration are not taxable." (Sec. 185, Regulations No. 26 or the Revised Documentary Stamp Tax Regulations). In the instant case, the Deed of Assignment in question is without consideration and the assignment is not in connection with a sale made to the condominium corporation. In fact, your sales of condominium units were made in favor of individual unit owners of the condominium project; and the purpose of the assignment to the condominium corporation is for the management of the project for the common benefit of the unit owners. (Section 10, R.A. No. 4726 or the Condominium Act). Accordingly, the aforesaid Deed of Assignment is not subject to the documentary stamp tax imposed by Section 209 of the Tax Code. However, the acknowledgment is subject to the documentary stamp tax on certificates, pursuant to Section 201 of the same Code. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner