Better Land Homeowners Association, Inc.

February 19, 2016 BIR RULING NO. 066-16 RA No. 7279; BIR Ruling No. 053-15 Better Land Homeowners Association, Inc. Purok 6, Brgy. San Antonio, Los Baos, Laguna Attention: Norma H. Albarico President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated November 4, 2015, endorsing the sale transaction between Ariel C. Rivera and Better Land 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". Documents submitted disclose that Ariel C. Rivera (TIN 104-347-371-000) (hereinafter referred to as Landowner) is the registered owner of a parcel of land, identified as Lot 5-A, of the subd., plan (LRC) Psd-302197, approved as a non-subd., project, being a portion of Lot 5, Psd-50765, LRC Rec. No. F. Patent covered by Transfer Certificate of Title (TCT) No. 87796 issued by the Registry of Deeds for the Calamba Branch. The aforesaid property is situated at Brgy. San Antonio, Los Baos, Laguna with an area of Sixteen Thousand square meters (16,000 sq.m.), more or less. Better Land Homeowners Association, Inc. (TIN 461-305-253-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On February 17, 2015, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed the subject property to Better Land Homeowners Association, Inc. at an agreed price of Twelve Million Pesos (P12,000,000.00). Pursuant to the certification issued by SHFC, the subject property covered by TCT No. 87796 actually comprises a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Better Land 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. HTcADC In support of its request, Better Land Homeowners Association, Inc. has completely submitted on November 13, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that the subject property qualifies and is actually a CMP project; 3) SHFC Letter of Guaranty No. LCMP-33; 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 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: "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 Ariel C. Rivera to Better Land Homeowners Association, Inc. of the subject property covered by TCT No. 87796 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 Homeowner's 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. 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 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 realty or its fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. 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 title 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 sellers are 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 Better Land Homeowners Association, Inc. Purok 6, Brgy. San Antonio, Los Baos, Laguna Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) 1 Abello, Lucely F. 1 24 63.76 2 Araco, Emmanuel S. 1 16 63.76 3 Avio, Victor A. 1 8 63.76 4 Bataller, Janeda B. 1 25 79.70 5 Delda, Michael A. 1 19 63.76 6 Dimapilis, Angelito A. 1 26 73.32 7 Dio, Gina O. 1 18 63.76 8 Eroles, Mhel T. 1 4 63.76 9 Galo, Wilma D. 1 20 63.76 10 Lerado, Jacqueline A. 1 22 63.76 11 Lim, Jose L. 1 3 63.76 12 Magsipoc, Melba P. 1 1 73.32 13 Mariano, Michael L. 1 10 63.76 14 Pedimonte, Rogelio R. 1 6 63.76 15 Miranda, Jen P. 1 9 63.76 16 Parado, Eric V. 1 23 63.76 17 Renegado, Ramil M. 1 15 63.76 18 Rodgriguez, Delia F. 1 11 63.76 19 Saginsin, Severina R. 1 13 63.76 20 Sanchez, Loida D. 1 2 78.10 21 Sungahid, Jisamen O. 1 12 63.76 22 Tagapan, Tirso G. 1 7 63.76 23 Torio, Mary Jean P. 1 21 63.76 24 Trimor, Macaria A. 1 17 63.76 25 Tulio, Elena G. 1 5 63.76 26 Villamayor, Josie A. 1 14 63.76 27 Alinea, Byron E. 2 11 63.76 28 Alinea, Vladimir E. 2 9 63.76 29 Alvarado, Elibeth P. 2 5 63.76 30 Bais, Christselda A. 2 10 63.76 31 Balaguer, Ramil A. 2 7 63.76 32 Baldo, Cristina S. 2 24 63.76 33 Banasihan, Agapito P. 2 16 63.76 34 Belleza, Wilma N. 2 6 63.76 35 Belleza, Henry N. 2 8 63.76 36 Bolaos, Gloria Z. 2 23 63.76 37 Campollo, Angeline C. 2 18 63.76 38 Coronel, Senadora G. 2 20 63.76 39 Dao, Anita L. 2 3 63.76 40 Demontao, Rudy B. 2 22 63.76 41 Forrosuelo, Mercy D. 2 19 63.76 42 Jebone, Ronnie L. 2 25 79.70 43 Kaligayahan, Rodrigo M. 2 17 63.76 44 Macasaet Rex Diel 2 14 63.76 45 Marcelino, Amelita 2 2 66.95 46 Mendoza, Guillermo T. 2 26 73.32 47 Napalang, Robert C. 2 4 63.76 48 Orillo, Merlinda y W. 2 21 63.76 49 Otero, Richard de los Reyes 2 12 63.76 50 Pabulayan, Gertrudes S. 2 1 63.76 51 Recodig, Emily O. 2 13 63.76 52 Recohermoso Christopher 2 15 63.76 53 Alforte, Reyna May V. 3 11 63.76 54 Bagongon, Ma. Deborah V. 3 16 63.76 55 Bandala, Mildred G. 3 23 94.04 56 Cabaltera, Jobert I. 3 5 63.76 57 Catapangan, Ron Ron J. 3 14 63.76 58 De los Santos, Gemma B. 3 13 63.76 59 Estrella, Jennet G. 3 9 63.76 60 Fajardo, Melinda B. 3 1 102.01 61 Fortuna, Ronald J. 3 12 63.76 62 Gajeto, Jaquelyn S. 3 15 63.76 63 Gibe, Leon O. 3 10 63.76 64 Jaramilla, Maricel Dela Rosa 3 17 63.76 65 Marquez, Agapito Magpusao 3 19 63.76 66 Milagrosa, Marcial M. 3 4 63.76 67 Olmilla, Marites B. 3 18 63.76 68 Omeres, Amelita O. 3 2 105.20 69 Palmero, Rene M. 3 8 63.76 70 Martos, Cristina R. 3 7 63.76 71 Ramirez, Liza T. 3 22 63.76 72 Razon, Gloria L. 3 21 63.76 73 Rivera, Grecy L. 3 3 63.76 74 Sales, Joan I. 3 6 63.76 75 Tacsiat, Josilyn F. 3 20 63.76 76 Zoilo, Milma G. 3 24 87.67 77 Antonio, Jinky Rose Delos Reyes 4 12 63.76 78 Arazo, Ma. Leonila T. 4 1 102.01 79 Arienda, Wilma L. 4 19 63.76 80 Balaguer, Jr., Donato A. 4 16 63.76 81 Dacir, Ernesto S. Jr. 4 20 63.76 82 De Mesa, Julio P. 4 10 63.76 83 Astorga, Belma T. 4 24 76.51 84 Entrata, Jennifer D. 4 23 84.48 85 Felix, Jose Randy D. 4 18 63.76 86 Fernandez, Albert G. 4 15 63.76 87 Gapoy, Rey G. 4 17 63.76 88 Louis, Melinda E. 4 3 63.76 89 Manaquil, Lita C. 4 21 63.76 90 Maravilla, Carlito Jr. B. 4 7 63.76 91 Millado, Sheilla E. 4 14 63.76 92 Ocenar, Michelle V. 4 4 63.76 93 Rangasa, Josephine P. 4 8 63.76 94 Riola, Teresa C. 4 5 63.76 95 Tatel, Cristina T. 4 2 105.20 96 Timajo, Genoveva F. 4 11 63.76 97 Timajo, Larry T. 4 9 63.76 98 Timajo, Margie I. 4 13 63.76 99 Venerayan, Lourdes D. 4 22 63.76 100 Zalameda, Joi Anne B. 4 6 63.76 101 Alabata, Florentino I. 5 13 63.76 102 Albarico, Norma H. 5 15 100.42 103 Castro, Arnel F. 5 1 87.67 104 Davo, Rosalinda T. 5 9 63.76 105 Eusebio, Mary Rose L. 5 11 63.76 106 Gonzales, Maria Madonna S. 5 14 63.76 107 Gorospe, Ricarte Q. 5 10 63.76 108 Lenox, Marilyn G. 5 18 63.76 109 Macatabas, Pablo Jr. M. 5 17 63.76 110 Manalo, Aristeo V. 5 4 63.76 111 Mila, Marissa R. 5 5 63.76 112 Montajes, Antonio O. 5 16 63.76 113 Morales, Rosalita A. 5 19 78.10 114 Olazo, Marissa P. 5 3 63.76 115 Pascua, Miriam G. 5 7 63.76 116 Pastor, Rosebel A. 5 6 63.76 117 Ramirez, Brigette T. 5 2 63.76 118 Resurreccion, Donna Lyn L. 5 12 63.76 119 Yunting, Janny S. 5 8 63.76 120 Antaran, Delia M. 6 2 76.51 121 Bautista, Joselito T. 6 18 63.76 122 Fideli, Leslie Delos Reyes 6 19 63.76 123 Galicia, Noel B. 6 20 63.76 124 Jatico, Gemma L. 6 5 63.76 125 Mercado, Grace C. 6 6 63.76 126 Navales, Juan A. 6 4 63.76 127 Neri, Lynly U. 6 3 63.76 128 Nery, Joel P. 6 17 63.76 129 Noche, Ma. Luisa J. 6 16 63.76 130 Pascual, Johnny S. 6 9 63.76 131 Perales, Gloria O. 6 11 63.76 132 Ramos, Emmanuel P. 6 14 63.76 133 Rances, Belinda U. 6 13 63.76 134 Rances, Jenifer R. 6 15 63.76 135 Tandang, Arlyn D. 6 21 63.76 136 Tapire, Elmer N. 6 10 63.76 137 Taway, Julius F. 6 8 63.76 138 Toledo, Alvin T. 6 24 84.48 139 Torres, Marvin R. 6 23 82.89 140 Villafranca, Edmond S. 6 1 79.70 141 Villarta, Jerose T. 6 22 63.76 142 Yamson, Arlene R. 6 12 63.76 143 Yunting, Jeson S. 6 7 63.76 144 Ajero, Josefina L. 7 17 63.76 145 Ajero, Riza O. 7 11 63.76 146 Asilo, Jaime N. 7 2 79.70 147 Azotea, Angeles L. 7 23 79.70 148 Baroro, Maricel V. 7 9 63.76 149 Barrameda, Ana Liza B. 7 21 63.76 150 Barrameda, Emma B. 7 19 63.76 151 Batitis, Irza Krister G. 7 16 63.76 152 Caintic, Noel A. 7 10 63.76 153 Cangao, Sheldon B. 7 6 63.76 154 Capaya, Crispin B. 7 12 63.76 155 Catena, Hasmin A. 7 13 63.76 156 De Mesa, Ofelia P. 7 7 63.76 157 Degorio, Emily M. 7 14 63.76 158 Donilla, Molina G. 7 3 63.76 159 Domingo, Eric P. 7 15 63.76 160 Fajardo, Carmelita S. 7 18 63.76 161 Jacla, Ruben G. 7 4 63.76 162 Macasinag, Noe S. 7 1 81.29 163 Magas, Arman P. 7 8 63.76 164 Micosa Jr., Dorico L. 7 24 81.29 165 Sabedoria, Joselito I. 7 20 63.76 166 Taway, Joyce F. 7 5 63.76 167 Yap, Jhune Mark V. 7 22 63.76 168 Ajero, Emelyn A. 8 16 63.76 169 Ajero, Lorna L. 8 14 63.76 170 Avila, Alexander V. 8 3 63.76 171 Ayes, Noel C. 8 4 63.76 172 Bolaos, Felicidad B. 8 23 79.70 173 Briones, Brizel Erika Lhane C. 8 7 63.76 174 Dela Torre Anastaciia Dela Cruz 8 18 63.76 175 Encinas, Leomar E. 8 6 63.76 176 Filio, Maricon M. 8 21 63.76 177 Galano, Adelita A. 8 13 63.76 178 Gibas, Ma. Luisa S. 8 10 63.76 179 Gracilla, Percival M. 8 19 63.76 180 Gulay, Benito A. 8 22 63.76 181 Gulay, Joselito 8 20 63.76 182 Gumayao, Meriam D. 8 24 81.29 183 Lalap, Donna C. 8 12 63.76 184 Lalongisip, Roberto A. 8 11 63.76 185 De Mesa, Nova P. 8 15 63.76 186 Madamba, Romel B. 8 2 79.70 187 Platino, Lilibeth M. 8 5 63.76 188 Sangyon, Melita D. 8 1 81.29 189 Soriano, Nerissa F. 8 8 63.76 190 Yadao, Rogelio V. 8 9 63.76 191 Zoilo, Lorna R. 8 17 63.76 192 Alvarez, Rolando D. 9 10 63.76 193 Antonio, Crispin A. 9 14 63.76 194 Bolaos, Johnson B. 9 3 63.76 195 Cervantes, Gracelyn B. 9 5 63.76 196 Delos Santos, Renz Allain P. 9 6 63.76 197 Escosura, Mary Ann Q. 9 4 63.76 198 Gripon, Salvador M. 9 1 73.32 199 Jose, Amiel Albert S. 9 9 63.76 200 Magas, Reynaldo P. 9 2 63.76 201 Nesperos Cliford 9 8 63.76 202 Nival, Alvin V. 9 7 63.76 203 Odo, Roger E. 9 15 76.51 204 Odoo, Emma O. 9 11 63.76 205 Orolfo, Mary Christ B. 9 12 63.76 206 Teao, Pio Jr. T. 9 13 63.76 207 Aguila, Cristina F. 10 5 63.76 208 Alvarez, Leah Joy D. 10 26 63.76 209 Averion, Aristeo P. 10 3 63.76 210 Averion, Arvin P. 10 2 63.76 211 Belmonte, Andrew N. 10 8 63.76 212 Catelo, Remiel Eroles 10 18 63.76 213 Dacir, Eugenio S. 10 24 63.76 214 Degorio, Junard M. 10 7 63.76 215 Empillo, Elenita Lagahit 10 31 63.76 216 Gasulas, Ma. Cristina N. 10 15 63.76 217 Layosa, Carmen D. 10 9 63.76 218 Linaban, Larry G. 10 33 63.76 219 Macasinag, Dante M. 10 17 63.76 220 Marcos, Marissa C. 10 13 63.76 221 Masungsong, Paulo L. 10 11 63.76 222 Muit, Emirlena O. 10 23 63.76 223 Muit, Charlene G. 10 22 63.76 224 Navarez, Rafael V. 10 4 63.76 225 Ouano, Mario F. 10 25 63.76 226 Padilla, Melchor de Rama 10 21 63.76 227 Palusa, Richard R. 10 14 63.76 228 Pilla, Eric L. 10 10 63.76 229 Portea, Severino L. 10 20 63.76 230 Rombano, Rogelio Alvarez 10 12 63.76 231 Renevo, Cristopher T. 10 6 63.76 232 Rentosa, Vicente B. 10 30 63.76 233 Resuriaga, Hilario A. 10 27 63.76 234 Resuriaga, Salvacion A. 10 34 63.76 235 Rioveros, Dennis R. 10 19 63.76 236 Rodriguez, John Paul A. 10 16 63.76 237 Ruiz, Michelle De Claro 10 29 63.76 238 Salon, Ernesto M. 10 1 68.54 239 Sapin, Luzviminda G. 10 28 63.76 240 Tangson, Percival L. 10 32 63.76 241 Valdez, Maricris K. 10 35 68.54 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.