Special Assessments Not Part of Acquisition Cost of Condominium Unit

June 13, 1985 BIR RULING NO. 088-85 34-h 000-00 088-85 M a d a m : This refers to your letter dated March 12, 1985, requesting on behalf of your client, MAKATI TUSCANY CORPORATION, opinion on whether special assessments imposed by the Condominium Corporation on condominium owners which are over and above the condominium dues could be annotated on the Condominium Certificate of Title and be made part of the acquisition cost, and thereby mitigate the onerous feature of the capital gains tax in case of sale of condominium units. In reply, please be informed that under Revenue Memorandum Order No. 21-80, the deduction of cost of property, improvement and expenses of sale shall be considered to arrive at the net capital gain realized from the sale or other disposition of real property by a citizen of the Philippines or a resident alien, subject to the schedular capital gains tax imposed by Section 34(h) of the Tax Code, as amended by Batas Pambansa Blg. 37. Special assessments, like fees charged by condominium corporations for maintenance of the common area, security guard, garbage, repair of facilities, and the like, are not part of acquisition cost of the condominium unit, but are considered personal expenses on the part of the owners thereof. Such being the case, said special assessments are not part of the acquisition cost and will not reduce the capital gain should an owner sell his condominium unit. Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner