Ana Maria Heights Homeowners Association, Inc.

November 15, 2018 BIR RULING NO. 1363-18 Republic Act (RA) No. 7279; BIR Ruling No. 005-2011 Ana Maria Heights Homeowners Association, Inc. Calamansian, Barangay 177, Zone 15 Camarin, Caloocan City Attention: AAA _______________ Gentlemen : This refers to your letter dated March 28, 2018, requesting exemption from the payment of taxes relative to the transfer of title of land from Ana Maria Heights Homeowners Association, Inc. in favor of its qualified member-beneficiaries 1 pursuant to Republic Act (RA) 7279, otherwise known as the "Urban Development and Housing Act of 1992." Documents submitted disclosed that Ana Maria Heights Homeowners Association, Inc. is the registered owner of several parcels of land covered by the following Transfer Certificate of Titles (TCTs) issued by the Registry of Deeds for Caloocan City: No. TCT No. Location Area No. TCT No. Location Area Blk. No. Lot No. Blk. No. Lot No. 1 C-412883 1 1 50 174 C-413090 5 27 36 2 C-412884 1 2 50 175 C-413091 5 28 36 3 C-412885 1 3 50 176 C-413092 5 29 36 4 C-412886 1 4 50 177 C-413093 5 30 36 5 C-412887 1 5 50 178 C-413094 5 31 36 6 C-412888 1 6 50 179 C-413095 5 32 36 7 C-412889 1 7 50 180 C-413096 5 33 36 8 C-412890 1 8 50 181 C-413097 5 34 36 9 C-412891 1 9 50 182 C-413098 5 35 36 10 C-412892 1 10 50 183 C-413099 5 36 36 11 C-412893 1 11 50 184 C-413100 5 37 36 12 C-412894 1 12 50 185 C-413101 5 38 36 13 C-412895 1 13 50 186 C-413102 5 39 36 14 C-412896 1 14 40 187 C-413103 5 40 36 15 C-412897 1 15 40 188 C-413104 5 41 36 16 C-412898 1 16 50 189 C-413105 5 42 36 17 C-412899 1 17 50 190 C-413106 5 43 36 18 C-412900 1 18 50 191 C-413107 5 44 36 19 C-412901 1 19 50 192 C-413108 5 45 36 20 C-412902 1 20 50 193 C-413109 6 1 45 21 C-412903 1 21 50 194 C-413110 6 2 35 22 C-412904 1 22 50 195 C-413111 6 3 35 23 C-412905 1 23 50 196 C-413112 6 4 50 24 C-412906 1 24 50 197 C-413113 6 5 50 25 C-412907 1 25 50 198 C-413114 6 6 50 26 C-412908 1 26 50 199 C-413115 6 7 50 27 C-412909 1 27 50 200 C-413116 6 8 50 28 C-412910 1 28 50 201 C-413694 7 1 51 29 C-412911 1 29 50 202 C-413695 7 2 51 30 C-412912 1 30 50 203 C-413696 7 3 36 31 C-412913 1 31 50 204 C-413697 7 4 36 32 C-412914 1 32 50 205 C-413698 7 5 36 33 C-412915 1 33 50 206 C-413699 7 6 36 34 C-412916 1 34 50 207 C-413700 7 7 36 35 C-412917 1 35 50 208 C-413701 7 8 36 36 C-412918 1 36 37 209 C-413702 7 9 36 37 C-412920 2 1 72 210 C-413703 7 10 36 38 C-412921 2 2 50 211 C-413704 7 11 36 39 C-412922 2 3 49 212 C-413705 7 12 36 40 C-412923 2 4 48 213 C-413706 7 13 36 41 C-412924 2 5 48 214 C-413707 7 14 36 42 C-412925 2 6 48 215 C-413708 7 15 36 43 C-412926 2 7 48 216 C-413709 7 16 36 44 C-412927 2 8 48 217 C-413710 7 17 36 45 C-412928 2 9 48 218 C-413711 7 18 36 46 C-412929 2 10 48 219 C-413712 7 19 36 47 C-412930 2 11 48 220 C-413713 7 20 36 48 C-412931 2 12 48 221 C-413714 7 21 36 49 C-412932 2 13 48 222 C-413715 7 22 36 50 C-412933 2 14 49 223 C-413716 7 23 36 51 C-412934 2 15 49 224 C-413717 7 24 36 52 C-412935 2 16 50 225 C-413718 7 25 36 53 C-412936 2 17 50 226 C-413719 7 26 36 54 C-412937 2 18 50 227 C-413720 7 27 36 55 C-412938 2 19 50 228 C-413721 7 28 36 56 C-412939 2 20 50 229 C-413722 7 29 36 57 C-412940 2 21 53 230 C-413723 7 30 36 58 C-412942 3 1 67 231 C-413724 7 31 36 59 C-412943 3 2 68 232 C-413725 7 32 36 60 C-412944 3 3 50 233 C-413726 7 33 36 61 C-412945 3 4 50 234 C-413727 7 34 36 62 C-412946 3 5 50 235 C-413728 7 35 36 63 C-412947 3 6 50 236 C-413729 7 36 36 64 C-412948 3 7 50 237 C-413730 7 37 36 65 C-412949 3 8 50 238 C-413731 7 38 36 66 C-412950 3 9 50 239 C-413732 7 39 36 67 C-412951 3 10 50 240 C-413733 7 40 36 68 C-412952 3 11 50 241 C-413733 7 41 36 69 C-412953 3 12 50 242 C-413735 7 42 36 70 C-412954 3 13 50 243 C-413736 7 43 36 71 C-412955 3 14 50 244 C-413737 7 44 36 72 C-412956 3 15 50 245 C-413738 7 45 45 73 C-412957 3 16 50 246 C-413739 7 46 45 74 C-412958 3 17 50 247 C-413740 8 1 69 75 C-412959 3 18 50 248 C-413741 8 2 39 76 C-412960 3 19 50 249 C-413742 8 3 50 77 C-412961 3 20 50 250 C-413743 8 4 40 78 C-412962 3 21 50 251 C-413744 8 5 50 79 C-412963 3 22 50 252 C-413745 8 6 40 80 C-412964 3 23 50 253 C-413746 8 7 50 81 C-412965 3 24 50 254 C-413747 8 8 50 82 C-412966 3 25 50 255 C-413748 8 9 50 83 C-412967 3 26 50 256 C-413749 8 10 50 84 C-412968 3 27 50 257 C-413750 8 11 50 85 C-412969 3 28 50 258 C-413751 8 12 50 86 C-412970 3 29 50 259 C-413752 8 13 50 87 C-412971 3 30 50 260 C-413753 8 14 50 88 C-412972 3 31 50 261 C-413754 8 15 50 89 C-412973 3 32 50 262 C-413755 8 16 50 90 C-412974 3 33 50 263 C-413756 8 17 50 91 C-412975 3 34 50 264 C-413757 8 18 50 92 C-412976 3 35 50 265 C-413758 8 19 50 93 C-412977 3 36 50 266 C-413759 8 20 50 94 C-412978 3 37 60 267 C-413760 8 21 50 95 C-412979 3 38 50 268 C-413761 8 22 50 96 C-412980 3 39 57 269 C-413762 8 23 50 97 C-412981 3 40 68 270 C-413763 8 24 50 98 C-413014 4 1 59 271 C-413764 8 25 50 99 C-413015 4 2 59 272 C-413765 8 26 50 100 C-413016 4 3 50 273 C-413766 8 27 50 101 C-413017 4 4 50 274 C-413767 8 28 50 102 C-413018 4 5 50 275 C-413768 8 29 50 103 C-413019 4 6 50 276 C-413769 8 30 50 104 C-413020 4 7 50 277 C-413771 8 33 50 105 C-413021 4 8 50 278 C-413772 8 33 50 106 C-413022 4 9 50 279 C-413773 8 34 50 107 C-413023 4 10 50 280 C-413774 8 35 66 108 C-413024 4 11 50 281 C-413775 8 36 50 109 C-413025 4 12 50 282 C-413776 8 37 50 110 C-413026 4 13 50 283 C-413777 8 38 50 111 C-413027 4 14 50 284 C-413778 8 39 50 112 C-413028 4 15 50 285 C-413779 8 40 50 113 C-413029 4 16 50 286 C-413780 8 41 50 114 C-413030 4 17 50 287 C-413781 8 42 50 115 C-413031 4 18 50 288 C-413782 8 43 44 116 C-413032 4 19 50 289 C-413783 8 44 50 117 C-413033 4 20 50 290 C-413784 8 45 41 118 C-413034 4 21 50 291 C-413785 8 46 44 119 C-413035 4 22 50 292 C-413786 9 1 67 120 C-413036 4 23 50 293 C-413787 9 2 50 121 C-413037 4 24 50 294 C-413788 9 3 50 122 C-413038 4 25 50 295 C-413789 9 4 50 123 C-413039 4 26 50 296 C-413790 9 5 50 124 C-413040 4 27 50 297 C-413791 9 6 50 125 C-413041 4 28 50 298 C-413792 9 7 50 126 C-413042 4 29 50 299 C-413793 9 8 50 127 C-413043 4 30 50 300 C-413794 9 9 50 128 C-413044 4 31 50 301 C-413795 9 10 50 129 C-413045 4 32 50 302 C-413796 9 11 50 130 C-413046 4 33 50 303 C-413797 9 12 50 131 C-413047 4 34 50 304 C-413798 9 13 50 132 C-413048 4 35 50 305 C-413799 9 14 50 133 C-413049 4 36 50 306 C-413800 9 15 50 134 C-413050 4 37 50 307 C-413801 9 16 50 135 C-413051 4 38 50 308 C-413802 9 17 50 136 C-413052 4 39 50 309 C-413803 9 18 50 137 C-413053 4 40 50 310 C-413804 9 19 50 138 C-413054 4 41 50 311 C-413805 9 20 50 139 C-413055 4 42 50 312 C-413806 9 21 50 140 C-413056 4 43 50 313 C-413807 9 22 50 141 C-413057 4 44 50 314 C-413808 9 23 50 142 C-413058 4 45 50 315 C-413809 9 24 50 143 C-413059 4 46 50 316 C-413810 9 25 50 144 C-413060 4 47 50 317 C-413811 9 26 50 145 C-413061 4 48 50 318 C-413812 9 27 50 146 C-413062 4 49 57 319 C-413813 9 28 50 147 C-413063 4 50 59 320 C-413814 9 29 50 148 C-413064 5 1 40 321 C-413815 10 1 50 149 C-413065 5 2 40 322 C-413816 10 2 50 150 C-413066 5 3 41 323 C-413817 10 3 50 151 C-413067 5 4 36 324 C-413818 10 4 50 152 C-413068 5 5 36 325 C-413819 10 5 50 153 C-413069 5 6 36 326 C-413820 10 6 50 154 C-413070 5 7 36 327 C-413821 10 7 50 155 C-413071 5 8 36 328 C-413822 10 8 50 156 C-413072 5 9 36 329 C-413823 10 9 50 157 C-413073 5 10 36 330 C-413824 10 10 50 158 C-413074 5 11 36 331 C-413825 10 11 50 159 C-413075 5 12 36 332 C-413826 10 12 50 160 C-413076 5 13 36 333 C-413827 10 13 50 161 C-413077 5 14 36 334 C-413828 10 14 50 162 C-413078 5 15 36 335 C-413829 10 15 50 163 C-413079 5 16 36 336 C-413830 10 16 50 164 C-413080 5 17 54 337 C-413831 10 17 50 165 C-413081 5 18 36 338 C-413832 10 18 50 166 C-413082 5 19 54 339 C-413833 10 19 50 167 C-413083 5 20 36 340 C-413834 10 20 50 168 C-413084 5 21 54 341 C-413835 10 21 50 169 C-413085 5 22 36 342 C-413836 10 22 50 170 C-413086 5 23 54 343 C-413837 10 23 50 171 C-413087 5 24 36 344 C-413838 10 24 41 172 C-413088 5 25 36 345 C-413839 10 25 42 173 C-413089 5 26 36 that the aforesaid lots were acquired through a loan under the Community Mortgage Program (CMP), with the Foundation for Development Alternatives, Inc. (FDAI) as Originator, per Certification dated October 21, 2005 issued by the Social Housing Finance Corporation (SHFC); and that based on same Certification, said project was taken-out on May 31, 2004 in the loan amount of Php21,785,185.69, involving 345 beneficiaries. CAIHTE In reply, please be informed that the transfer of the subdivided lots in favor of the individual members-beneficiaries of Ana Maria Heights Homeowners Association, Inc. is not subject to either the capital gains tax (CGT) imposed under Section 27 (D) (5) of the National Internal Revenue Code of 1997, as amended, or the creditable withholding tax (CWT) imposed under Revenue Regulations (RR) No. 2-98, as amended, considering that said transfer is only a formality to finally effect the transfer of the subject property to its member-beneficiaries who actually bought the same from the former owner through the association. In other words, the association is merely transferring the ownership of the property to its member-beneficiaries who actually own the same. Moreover, the said transfer is not subject to the donor's tax imposed under Section 99 of the National Internal Revenue Code of 1997, as amended, since there is no donative intent on the part of Ana Maria Heights Homeowners Association, Inc. to donate the property to its members-beneficiaries, considering that it could not donate property the ownership of which already belongs to the members-beneficiaries themselves. Furthermore, under Section 196 of the National Internal Revenue Code of 1997, as amended, the deeds or documents subject to the documentary stamp tax (DST) imposed therein are those where the realty sold are granted, assigned, transferred, donated, or otherwise conveyed to a purchaser or purchasers, or to any other person or persons designated by such purchaser or purchasers, thereby excluding the instant case from its purview considering that the supposed purchasers are actually the owners thereof. Accordingly, the transfer of the subdivided lots in favor of the member-beneficiaries is not subject to DST under Section 196 of the National Internal Revenue Code of 1997, as amended. However, the notarial acknowledgment to the deed of conveyance/sale is subject to the DST of P30.00 2 pursuant to Section 188 of the National Internal Revenue Code of 1997, as amended. It is, however, understood that the Certificate Authorizing Registration (CAR) shall only be issued after the submission of the requirements provided under Revenue Memorandum Order (RMO) No. 15-2003 and after it is established upon proper verification by the Revenue District Officer (RDO) concerned that, considering the rules on valuation of real property, the actual selling price per sale transaction in this case does not exceed P450,000.00 3 for house and lot and P180,000.00 for lot only for each qualified member-beneficiaries. 4 This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. DETACa Very truly yours, (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue Footnotes 1. Please see attached Masterlist of Beneficiaries consisting of ten (10) pages and containing 345 beneficiaries. 2. Republic Act (RA) No. 10963 increased the DST from P15.00 to P30.00 effective January 01, 2018. 3. HUDCC Resolution No. 1, Series of 2013, promulgated on October 16, 2013, approving the adjustment of price ceiling for horizontal socialized housing from P400,000.00 per house and lot to P450,000.00. 4. BIR Ruling No. 005-11 dated January 19, 2011.