Sale of Condominium Units Below P1,000,000.00 Each, Exempt from VAT

July 7, 1998 BIR RULING NO. 110-98 RR6-97-000-00-110-98 Alakor Corporation 9th Floor, Quad Alpha Centrum 125 Pioneer Street, Mandaluyong City Metro Manila Attention: Mr . Alfredo C . Ramos President Gentlemen : This refers to your letter dated January 19, 1998 stating that you are a VAT-registered Company presently developing a residential condominium project in Old Cabalan, Olongapo City, known as Buena Vista Homes; and that the current selling prices of said units are as follows: 34 square meters P500,000.00 37 square meters P544,000.00 39 square meters P574,000.00 42 square meters P617,000.00 Based on the foregoing, you are requesting for confirmation of your opinion that you are exempt from the payment of VAT on the condominium units you are selling. In reply, please be informed that pursuant to Section 4.103-1(B)(w)(4) of Revenue Regulations No. 7-95, as amended by Revenue Regulations No. 6-97, the sale by real estate dealers and/or lessors of house and lot and other residential dwellings valued at One Million Pesos (P1,000,000.00) and below shall be exempt from VAT. Accordingly, since the current prices of your condominium units are below P1,000,000.00 each, we hereby confirm your opinion that you are exempt from VAT on your sale of said condominium units, pursuant to Section 109(w) of the Tax Code of 1997. However, since you are a non-VAT taxpayer, you shall pay a tax equivalent to three percent (3%) of your quarterly gross sales or receipts pursuant to Section 116 of the same Code. This ruling is being issued on the basis of the foregoing facts as represented. However, the same shall considered null and void if it turns out later that the facts are different from those as represented. prcd Very truly yours, (SGD.) LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue