BIR Ruling No. 075-15

March 30, 2015 BIR RULING NO. 075-15 RA 7279; BIR Ruling No. 040-2010; BIR Ruling No. 342-2011 National Housing Authority Region XII and ARMM-A 3/F Insular Life Bldg., Pioneer Avenue General Santos City Attention: Ms. Carmencita D. Pineda Regional Manager Gentlemen : This refers to your letter dated February 16, 2010, as indorsed by the Regional Director of Revenue Region No. 18, Koronadal City on August 24, 2010, requesting for exemption from payment of capital gains taxes on the transfer by Edmundo G. Garcia or EGG for brevity of his property to Dac Ville Homeowners Association, Inc. Phase II, a legal association of underprivileged and homeless citizens pursuant to Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992. It is represented that EGG (TIN 142-400-616) is the registered owner of a parcel of land covered by Original Certificate of Title (OCT) No. P-5079 and described as Cadastral Lot No. 746-B, Survey No. CSD-11-007581-D with an area of 37,894 sq.m. located at Barangay Mabuhay, General Santos City. On the other hand, Dac Ville Homeowners Association, Inc. Phase II (TIN 283-021-404) with Housing and Land Use Regulatory Board (HLURB) Certificate of Registration No. 12-08-01, is a non-stock, non-profit organization duly registered with HLURB Region 12. On February 4, 2010, EGG has agreed to sell his lot to Dac Ville Homeowners Association, Inc. Phase II thru a Deed of Absolute Sale at an amount of P100.00 per sq.m. under the Community Mortgage Program (CMP) of the Social Housing Finance Corporation (SHFC), a subsidiary of the National Home Mortgage Finance Corporation (NHMFC) for an agreed price of P3,396,435.00 and by direct purchase for P392,965.00. SHFC certified that 33,964.35 sq.m. of the subject property is actually a CMP Project. In support of your request, you have submitted the following documents: 1) Written Application for Exemption filed with the Law Division; 2) Certified true copies of the Original Certificate of Title (OCT) and Tax Declaration of the property to be transferred; 3) Original copy of the Deed of Absolute Sale executed by and between EGG and Dac Ville Homeowners Association, Inc. Phase II dated February 4, 2010; DHaECI 4) Certification from the SHFC that the property was acquired through CMP; 5) Certified true copy of the HLURB Certificate of Registration and Articles of Incorporation of the community association; 6) Copy of the Masterlist of qualified beneficiaries duly certified by the NHA; 7) Copies of the TIN cards of EGG and Dac Ville Homeowners Association, Inc. Phase II; 8) Copies of the capital gains tax and documentary stamp tax returns filed with the appropriate RDO; and 9) 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 landowner who sold his property for use in a socialized housing project is exempt from the payment of capital gains tax. Such being the case, the sale of 33,964.35 sq.m. portion of the property covered by OCT No. P-5079 by EGG to Dac Ville Homeowners Association, Inc. Phase II is exempt from the capital gains tax. However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Secs. 20 and 32 of RA 7279. Such being the case, the document conveying the property shall be subject to documentary stamp tax 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 the 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. 040-2010 dated August 27, 2010) IcTEaC Finally, 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 beneficiary association of the socialized housing program shall be caused to 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. Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the properties transferred under the CMP are qualified beneficiaries and therefore, the sellers are entitled to exemption for capital gains tax or income tax imposed under the Tax Code of 1997. (BIR Ruling No. 342-2011 dated September 8, 2011) The Master List of member-beneficiaries, consisting of one-hundred ninety seven (197) qualified individuals, as certified by the NHA which are listed in Annex "A" hereof shall form part of this Ruling. 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 ATTACHMENT Dac Ville Homeowners Association, Inc. Phase II Mabuhay, General Santos City List of Member Beneficiaries Who Availed Financing in Land Acquisition through Financing of the Community Mortgage Program Lot Allocation No. Name of Household Head Blk Lot Homelot Share of Total (LastName, Fname, Mname) No. No. Area (m2) Open Space (m2) 1 Vergara, Annson Joy Zamora 1 4 95 66.56 161.56 2 Alcaya, Jenelyn Garcia 1 6 95 66.56 161.56 3 Bitantos, Sonia Flamiano 1 7 95 66.56 161.56 4 Cruz, Lorilin Arbaan 1 8 95 66.56 161.56 5 Gian, Febreth Joy Omagad 1 9 95 66.56 161.56 6 Gian, Diezen Omagad 1 10 95 66.56 161.56 7 Bacalso, Lydia Landero 1 11 95 66.56 161.56 8 Mahusay, Elizabeth Danao 1 12 95 66.56 161.56 9 Sumaya, Jimmy Garin 1 13 100 70.07 170.07 10 Marigon, Irish Landao 1 14 101 70.07 171.07 11 Tinapay, Angeles Labastida 2 1 98 68.66 166.66 12 Tinapay, Marlon Labastida 2 2 98 68.66 166.66 13 Ditcheta, Willy Egao 2 3 100 70.07 170.07 14 Tinapay, Carlo Ace Labastida 2 4 100 70.07 170.07 15 Sagnip, Dexter Bermonde 2 5 100 70.07 170.07 16 Tinapay, Janvire Labastida 2 6 100 70.07 170.07 17 Wenceslao, Miguela Abregoso 2 7 100 70.07 170.07 18 Seva, Melanie Romitman 2 8 100 70.07 170.07 19 Quiamco, Derwin Romitman 2 11 100 70.07 170.07 20 Romitman, Ma. Cristina Zamora 2 12 100 70.07 170.07 21 De Lara, Wilnia Lumpan 2 13 98 68.66 166.66 22 Tariao Jr., Gervacio Untao 3 2 100 70.07 170.07 23 Cantoja, Emily Hermosisima 3 3 100 70.07 170.07 24 Visaya, Hanily Tabar 3 4 100 70.07 170.07 25 Leteratus, Nelson Palmetos 3 5 100 70.07 170.07 26 Tan, Jackeline Labeseros 3 6 100 70.07 170.07 27 Galula Gemelisa Borinaga 3 7 100 70.07 170.07 28 Baga, Josephine Agbon 3 8 101 70.07 171.07 29 Bantaculo, Erlinda Surigao 3 9 100 70.07 170.07 30 Saquin, Gemelyngalola 3 10 100 70.07 170.07 31 Zapanta, Rosela Selgas 3 11 100 70.07 170.07 32 Bayubay, Joy Doraido 3 12 100 70.07 170.07 33 Projo, Reggie Balane 3 13 100 70.07 170.07 34 Ogoc, Germie Dela Cerna 3 14 100 70.07 170.07 35 Ortega, Girlie Flores 3 15 100 70.07 170.07 36 Villazorda, Benjun Donor 3 16 100 70.07 170.07 37 Minoza, Sheryl Albert 3 17 100 70.07 170.07 38 Masillones, Alberto Ceballos 3 18 100 70.07 170.07 39 Puno, Gloria Martinito 3 19 100 70.07 170.07 40 Malabarbas, Anastacia Suaybaguio 3 20 107 74.97 181.97 41 Mahusay, Salome Pepito 4 2 90 63.06 153.06 42 Alejado, Arlene Sabellano 4 3 95 66.56 161.56 43 Cuesta, Cristina Sabellano 4 4 95 66.56 161.56 44 Malunes, Eizar Vincent Asesor 4 5 95 66.56 161.56 45 Yata, Guillerma Villarubia 4 6 95 66.56 161.56 46 Piquero, Jonie Delos Reyes 4 7 95 66.56 161.56 47 Gadia, Diana Rose Pecson 4 8 95 66.56 161.56 48 Gadia, Jonna Lyn Pecson 4 9 95 66.56 161.56 49 Gadia, Leonora Pecson 4 10 95 66.56 161.56 50 Pecson, Ines Gay Pastera 4 11 95 66.56 161.56 Total 4908 3437.42 8345.42 ===== ====== ====== 51 Pecson, Noel Pastera 4 12 95 66.56 161.56 52 Landao Jr., Lemuel Pecson 4 13 101 70.77 171.77 53 Landao Sr., Lemuel Gupong 4 14 100 70.07 170.07 54 Tinapay, Marjorie Labastida 5 1 98 68.66 166.66 55 Seracarpio, Abhez Tinapay 5 2 98 68.66 166.66 56 Rendon, Roy Sobrevega 5 4 100 70.07 170.07 57 Secadon, Ena Ecalla 5 5 100 70.07 170.07 58 Inoc, Maricel Abapo 5 6 100 70.07 170.07 59 Pecajas, Belsie Taculod 5 7 100 70.07 170.07 60 Mercado, Lorna Villarente 5 8 100 70.07 170.07 61 Corros, Marlon Galindo 5 9 100 70.07 170.07 62 Agullana, Ailen Gian 5 10 100 70.07 170.07 63 Bicoy, Cristino Tejada 5 12 100 70.07 170.07 64 Gadiana, Pablo Jr. Ramos 5 14 98 68.66 166.66 65 Mercado, Julie Mae Gian 6 1 107 74.97 181.97 66 Anthony, Rolly Huqueriza 6 2 111 77.77 188.77 67 Gian, Romeo Jr. Omagad 6 3 108 75.67 183.67 68 Anthony, Cherry Huqueriza 6 4 107 74.97 181.97 69 Valdez, Gemma Cagalawan 6 5 108 75.67 183.67 70 Taneza, Emmalyn Valdez 6 6 108 75.67 183.67 71 Grapila, Rubina Maribao 6 7 109 76.37 185.37 72 Salvoda, Roseller Tibong 6 8 107 74.97 181.97 73 Autentico, Noel Cabaron 6 9 109 76.37 185.37 74 Marcellana, Gloria Galla 6 10 107 74.97 181.97 75 Taculod, Leonor V Icaro 6 11 110 77.07 187.07 76 Bustamante, Roderic Santillano 6 12 107 74.97 181.97 77 Abrea, Jonathan Sr. Lumbab 6 13 110 77.07 187.07 78 Bastareche, Bernie Espora 6 14 107 74.97 181.97 79 Sabellano, Rubena Alicaway 6 15 110 77.07 187.07 80 Manatad, Pepito Maglasang 6 16 107 74.97 181.97 81 Pandan, Rowena Hernaez 6 17 111 77.77 188.77 82 Rospero, Melodina Buac 6 18 107 74.97 181.97 83 Carpenteros, Johnny Curativo 6 20 114 79.87 193.87 84 Capillas, Edwin Along 7 1 112 78.47 190.47 85 Simtim, Jemuel Along 7 2 112 78.47 190.47 86 Susada, Jinky Marquez 7 3 107 74.97 181.97 87 Blancaflor, Kristine Ladres 7 4 107 74.97 181.97 88 Blancaflor, Ronilo Sr. Buendia 7 5 107 74.97 181.97 89 Rencio, Tessa Joan Izola T 7 6 107 74.97 181.97 90 Singer, Joelson Reyes 7 7 107 74.97 181.97 91 Rockliff, Jonathan Craus 7 8 107 74.97 181.97 92 Vicio, Josephine Singer 7 9 107 74.97 181.97 93 Sarillana, Joelinie Rencio 7 10 107 74.97 181.97 94 Balmonte, Roy Dagyo 7 11 107 74.97 181.97 95 Aninon, Felix Delos Trayco 7 12 107 74.97 181.97 96 Landao, Ricky Gupong 7 13 107 74.97 181.97 97 Malunes, Julius Asesor 7 14 107 74.97 181.97 98 Arellano, Sherlyn Saluwage 7 15 107 74.97 181.97 99 Canete, Josephine Hetes 7 16 107 74.97 181.97 100 Santillana, Jonaliza Bermudez 7 17 107 74.97 181.97 Total 5283 3701.56 8984.56 ===== ====== ====== 101 Millan, Pablo Dianala 7 18 107 74.97 181.97 102 Luchana, Emanuel L. 7 19 114 79.87 193.87 103 Bawasanta, Oswaldo Baflor 7 20 114 79.87 193.87 104 Bombita, Joe Y. Leyte 8 1 106 74.27 180.27 105 Bombita, Agustin Anislag 8 2 106 74.27 180.27 106 Leyte, Joel Gomez 8 3 100 70.07 170.07 107 Calong, Charmie Mante 8 4 100 70.07 170.07 108 Maristela, Rosita Maiso 8 6 100 70.07 170.07 109 Pecajas, Shirley Cruza 8 7 100 70.07 170.07 110 Maristela, Xyra Mae Maiso 8 8 100 70.07 170.07 111 Pecajas, Celia Dela Cruz 8 9 100 70.07 170.07 112 Tatel, Teresita Bernal 8 11 100 70.07 170.07 113 Senarillos, Danilo 8 12 100 70.07 170.07 114 Benitez, Julieta Amolo 8 14 105 73.57 178.57 115 Dua, Felix Lamban 9 1 106 74.27 180.27 116 Calong, Gilbert Mante 9 2 106 74.27 180.27 117 Ebao, Sherlyn Dua 9 3 100 70.07 170.07 118 Calong, Lolita Mante 9 4 100 70.07 170.07 119 Macain, Alicia Ponio 9 5 100 70.07 170.07 120 Barredo, Catherine Calong 9 6 100 70.07 170.07 121 De Gracia, Constancio Boyles 9 7 100 70.07 170.07 122 Langres, Analy Montilla 9 8 100 70.07 170.07 123 Sulla, Rolinda Magallano 9 9 100 70.07 170.07 124 Leyte, Crispina Dela Cruz 9 10 100 70.07 170.07 125 Pajarillo, Florenda Geyrozaga 9 11 100 70.07 170.07 126 Flores, Mark Anthony Collano 9 12 100 70.07 170.07 127 Villarin, Eddie Burre 9 13 105 73.57 178.57 128 Flores, Gina Villarin 9 14 105 73.57 178.57 129 Serato, Romeo Sr. Langris 10 1 106 74.27 180.27 130 Bulat-Ag, Melodhena Belarmino 10 2 106 74.27 180.27 131 Dayanan, Rona Serato 10 3 100 70.07 170.07 132 Serato, Romeo Jr. Montilla 10 4 100 70.07 170.07 133 Serato, Rowen Montilla 10 5 100 70.07 170.07 134 Undo, Loreto Dagansina 10 6 100 70.07 170.07 135 Pinote, Vermilit Blaz 10 7 100 70.07 170.07 136 Camacho, Rowena Sanchez 10 8 100 70.07 170.07 137 Catalan, Editha Wagas 10 9 100 70.07 170.07 138 Rezalado, Warlita E 10 10 100 70.07 170.07 139 Mante, Ronelo Ponio 10 11 100 70.07 170.07 140 Padao, Gerelito Bantayan 10 12 100 70.07 170.07 141 Mante, Ricardo Lumba 10 13 105 73.57 178.57 142 Mante, Noel Ponio 10 14 105 73.57 178.57 143 Bayo, Joey Luchana 11 1 112 78.47 190.47 144 Mante, Jocelyn Holasca 11 2 120 84.08 204.08 145 Borinaga, Mirasol Bakiao 11 3 100 70.07 170.07 146 Acut, Candido Mepranum 11 4 100 70.07 170.07 147 Fernandez, Eduardo Paguican 11 6 100 70.07 170.07 148 Estoquia, Elisa Cabangon 11 7 100 70.07 170.07 149 Kubon, Roy Asis 11 8 100 70.07 170.07 150 Vega, Cristino Castaneda 11 9 100 70.07 170.07 Total 5128 3592.96 8720.96 ===== ====== ====== 151 Serato, Recjon Sagaldia 11 10 100 70.07 170.07 152 Vega Jr., Isidro Castaneda 11 11 100 70.07 170.07 153 Vega, Mellyn Castaneda 11 12 100 70.07 170.07 154 Vega Sr., Isidro Jorge 11 13 105 73.57 178.57 155 Rubia, Charlie Parilla 12 1 91 63.76 154.76 156 Rubia, Alejandro Caballero 12 2 98 68.66 166.66 157 Paisones, Roselyn Rubia 12 3 100 70.07 170.07 158 Bantaculo, Juliet Rubia 12 4 100 70.07 170.07 159 Romitman, Elvie Francisco 12 5 100 70.07 170.07 160 Yangyang, Teresita Martinez 12 6 100 70.07 170.07 161 Anito Jr., Julio Canete 12 8 100 70.07 170.07 162 Sanchez, Emma Badana 12 9 100 70.07 170.07 163 Sanchez, Cris Ian Badana 12 10 100 70.07 170.07 164 Yangyang, Zenaida Belmonte 12 11 100 70.07 170.07 165 Mabaga Jr., Felomino Amistoso 12 12 100 70.07 170.07 166 Miramonte, Raquel Deodor 12 14 106 74.27 180.27 167 Tulio, Robert Caresma 13 1 94 65.86 159.86 168 Torres, Lemuel Manangan 13 2 101 70.77 171.77 169 Pasaan, Ricardo Jr. Meliton 13 3 95 66.56 161.56 170 Calaque, Imelda Caday 13 4 95 66.56 161.56 171 Luzon, Agerico Canete 13 5 95 66.56 161.56 172 Sarillana, Ruth Lumingkit 13 7 95 66.56 161.56 173 Capillo, Vilma Francisco 13 8 95 66.56 161.56 174 Radin, Marichu Larita 13 9 95 66.56 161.56 175 Malabarbas, Daisy Undang 13 10 95 66.56 161.56 176 Sakkam, Vilma Danao 13 12 95 66.56 161.56 177 Millan, Julius Alegria 13 13 106 74.27 180.27 178 Millan, Ruby Anthony 13 14 106 74.27 180.27 179 Mindana, Carlos Celeste 14 1 83 58.15 141.15 180 Ca-Ang, Leonila Mahusay 14 2 100 70.07 170.07 181 Aspacio, Florencio Garol 14 3 100 70.07 170.07 182 Rizardo, Anabel Consular 14 4 100 70.07 170.07 183 Pechon, Nerissa Consular 14 5 100 70.07 170.07 184 Projo, Richel Balani 14 6 100 70.07 170.07 185 Barrientos, Samie Mulat 14 8 100 70.07 170.07 186 Papa, Wendy Claire Almocera 14 9 100 70.07 170.07 187 Nierra, Armela Munoz 14 10 100 70.07 170.07 188 Autentico, Dennis Cabaron 14 11 100 70.07 170.07 189 Pastor, Jasmin Danao 14 12 100 70.07 170.07 190 Pechon, Adam Pastera 14 13 100 70.07 170.07 191 Cantoja, Sandy Suico 14 14 100 70.07 170.07 192 Mibulos, Leonora Mante 14 15 100 70.07 170.07 193 Danao, Mercedita Belocura 14 16 100 70.07 170.07 194 Maya, Merolyn Almodal 14 17 100 70.07 170.07 195 Aranez, Arman Mora 14 18 100 70.07 170.07 196 Autentico, Jr., Rodolfo Palma 14 19 100 70.07 170.07 197 Velarde, Enrique Jr. Lumbab 14 20 103 72.17 175.17 Sub-Total 4653 3260.15 7913.15 from 1-50 4908 3437.42 8345.42 from 51-100 5283 3701.56 8984.56 from 101-150 5128 3592.96 8720.96 Total 19972 13992.35 33964.35 ===== ======= =======