Whether Deed of Sale Can Be Registered without Proof of Payment of Capital Gains Tax

May 10, 1985 BIR RULING NO. 067-85 34-h 148-84 067-85 Gentlemen : This refers to your letter dated April 17, 1985 stating that a parcel of land, with a residential building and other improvements thereon, was sold on May 18, 1966 by Edilberto C. Casano in favor of Paulita I. Karunungan and Lourdes I. Karunungan for P24,000.00 with assumption of a mortgage obligation in the principal amount of P17,500.00 with the Social Security System: that the property was acquired by the vendor in 1963; that the mortgage obligation was settled only on March 10, 1975; and that it is only now that the Deed of Release of Mortgage and the Deed of Sale will be presented for registration. Based on the foregoing representations, you now request opinion as to whether or not the aforesaid Deed of Sale can be registered without proof of payment of the capital gains tax, if any. In reply, please be informed that Section 8 of Revenue Regulations No. 8-79 implementing B.P. Blg. 37 provides as follows: "SEC. 8. Effectivity . This Regulations shall apply to transactions involving sales or dispositions of real property entered into on or after September 7, 1979. A deed of conveyance of real property acknowledged before a notary public on or after September 7, 1979, shall be deemed to be a sale or disposition of real property on or after September 7, 1979. Under the above-quoted provision of the regulations, the effectivity of the law depends on the date of the deed of conveyance was acknowledged before a notary public. Hence, if the deed was acknowledged before September 7, 1979, the provisions of Batas Pambansa Blg. 37 will not be applied. (BIR Ruling dated November 9, 1979) Accordingly, inasmuch as the aforesaid Deed of Sale evidencing the conveyance of the property was acknowledged before a notary public on August 11, 1966 or before September 7, 1979, the provisions of B.P. Blg. 37 imposing a final schedular tax shall not be applicable to the capital gains, if any, realized by the vendor. Such being the case, the certification required under said law need not be presented to the Register of Deeds before registration of the aforesaid Deed of Sale is effected in the corresponding registry of real property. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner