Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc.

April 18, 2016 BIR RULING NO. 138-16 RA No. 7279; BIR Ruling No. 053-15 Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. Purok Masinulondon, Brgy. Punta Taytay, Bacolod City Attention: Philip D. Burata President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated December 10, 2015, endorsing the sale transaction between Angelina Pahila-Garrido, et al., and Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. for exemption from the payment of Capital Gains Tax and other taxes in accordance with the Republic Act (RA) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992". Documents submitted disclose that a parcel of land, identified as Lot 641-B-3, Psd-06450-023348, being a portion of Lot 641-B, Psd-62488 covered by Transfer Certificate of Title (TCT) No. 092-2015000323 1 issued by the Registry of Deeds for Bacolod City is registered under the names of the following co-owners: Name share/proportion 1 Angelina Pahila-Garrido, married to Buenaventura Garrido 1/6 2 Ramon D. Pahila, married to Ida Go Pahila 1/6 3 Meraflor P. Bugador, married to Caesar Bugador 1/6 4 Domingo D. Pahila, married to Analy Olingco Pahila 1/6 5 Candido D. Pahila, married to Jesusa Demerin Pahila 1/6 6 Catalino D. Pahila, married to Erda Trizna Dianal 1/6 The aforesaid property is situated at Brgy. Punta Taytay, Bacolod City with an area of Twenty Four Thousand Eight Hundred Sixty Three square meters (24,863 sq.m.), more or less Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. (TIN 401-441-297-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On December 29, 2014, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed Ten Thousand One Hundred Thirty Six square meters (10,136 sq.m.) portion of the subject property to Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. at an agreed price of Eight Million Seven Hundred Seventeen Thousand Eight Hundred Twenty Pesos (P8,717,820.00). Pursuant to the certification issued by SHFC, 10,136 sq.m. out of 24,863 sq.m. covered by TCT No. 092-2015000323 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 2 For this purpose, Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. secured a housing loan under the CMP, a financing assistance program of the SHFC a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). Documentary Stamp Tax (DST) due on the sale has been paid. In support of its request, Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. has completely submitted on December 23, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that 10,136 sq.m. portion of the subject property qualify and is actually a CMP project; 3) SHFC Letter-Guaranty No. CMP-1049; 4) Certified true copy of the Deed of Absolute Sale to the Community Association; 5) Certified true copy of the Articles of Incorporation of the Community Association; 6) Certified true copy of the Masterlist of Qualified Beneficiaries duly certified by the SHFC; CAIHTE 7) Certified true copies of the TCTs and Latest Tax Declarations of the Property Sold to the Community Association; 8) Certified true copy of the Location Plan of the Lot Sold to the Community Association; 9) TIN ID/BIR Certificate of Registration of the seller and the Homeowner Association; and 10) 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 landowners who sold their properties for use in a socialized housing project are exempt from the payment of capital gains tax. Such being the case, the sale by the landowners to Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. of the 10,136 sq.m. out of 24,863 sq.m. covered by TCT No. 092-2015000323 is exempt from the capital gains tax. 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 Homeowner's Association shall 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. (BIR Ruling No. 053-15 dated February 27, 2015) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 32 of RA 7279. Accordingly, the landowners are liable to pay the documentary stamp tax on the document conveying the afore-stated property 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 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. 053-15 dated February 27, 2015) Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the property transferred under the CMP are qualified beneficiaries and therefore, the sellers are entitled to exemption from capital gains tax or income tax imposed under the Tax Code of 1997. 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 ANNEX Domingo F. Pahila Sr. Ph 1 Homeowners Association, Inc. Purok Masinulondon, Brgy. Punta Taytay, Bacolod City Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) 1 Pilapil, Selfa H. 1 1 61.31 2 Manga, Danilo S. 1 2 61.31 3 Manga, Eduardo, Jr. G. 1 3 61.31 4 Segovia, Imee C. 1 4 61.31 5 Gomez, Maricel S. 1 5 61.31 6 Divino, Danilo, Jr. M. 1 6 61.31 7 Manga, Gary B. 1 7 61.31 8 Soriano, Virgie A. 1 8 61.31 9 Siason, Romeo Zaldy A. 1 9 61.31 10 Calpez, Emily M. 1 10 61.31 11 Orlido, Merle M. 1 11 61.31 12 Intal, Rosalie M. 1 12 61.31 13 Tio, Ignatius Irvin V. 1 13 61.31 14 Tio, Sandra V. 1 14 61.31 15 Guadalupe, Iris Christelle T. 1 15 61.31 16 Loresto, Jane Girl G. 1 16 61.31 17 Octaviano, Estela G. 1 17 61.31 18 Loresto, Hermilo G. 1 18 61.31 19 Gestano, Aziel S. 1 22 61.31 20 Saliba, Cargie C. 2 1 61.31 21 Saliba, Carmegie C. 2 2 61.31 22 Saliba, Christine Marie C. 2 3 61.31 23 Saliba, Gregorio G. 2 4 61.31 24 Palma, Soledad D. 2 12 61.31 25 Pioquinto, Even S. 2 14 61.31 26 Sangco, Mario R. 2 16 61.31 27 Panoncillo, Joy M. 2 17 61.31 28 Sangco, Alfredo R. 2 18 61.31 29 Panoncillo, John Michael M. 2 19 61.31 30 Montelibano, Rhett Josef A. 2 20 61.31 31 Alova, Kecelle Ann C. 2 21 61.31 32 Mijares, Doname O. 2 22 61.31 33 Dama, Mitchell D. 2 23 61.31 34 Janayon, Evelyn May L. 2 24 61.31 35 Sevilla, Regie P. 2 25 61.31 36 Malacad, Roland V. 2 26 61.31 37 Sevilla, Analisa P. 2 27 61.31 38 Getino, Ronnie Jay M. 2 28 61.31 39 Getino, Felicidad M. 2 29 61.31 40 Tapang, Vebita R. 2 30 61.31 41 Balgoma, Eden May F. 2 31 61.31 42 Torillo, Rolly R. 2 32 61.31 43 Salvo, Analiza C. 2 33 61.31 44 Villa, Johnrey T. 2 34 61.31 45 Villa, July T. 2 35 61.31 46 Verba, Rey V. 2 36 61.31 47 Morales, Grace B. 2 37 64.04 48 Morada, May G. 2 38 61.31 49 Garcia, Mariah Kharianne C. 3 1 68.13 50 Parojillo, Grace V. 3 2 68.13 51 Garcia, Jezalyn Marie C. 3 3 61.31 52 Garcia, Olivia V. 3 4 61.31 53 Garcia, Septhema G. 3 5 61.31 54 Villa, Josiel S. 3 6 61.31 55 Villa, Consejo S. 3 7 61.31 56 Chan, Patrick S. 3 8 61.31 57 Villa, Greg S. 3 9 61.31 58 Goboli, Joseph A. 3 10 61.31 59 Villa, Razel P. 3 11 61.31 60 Estrella, Regie D. 3 12 61.31 61 Nicavera, Rosalie S. 3 13 61.31 62 Geca, Augustus Ceasar C. 3 14 61.31 63 Monit, Angie M. 3 15 61.31 64 Kho, Ma. Suzette D. 3 16 61.31 65 Monit, Andy M. 3 17 61.31 66 Flojemon, Herbert P. 3 18 61.31 67 Adoptante, Jermin A. 3 19 61.31 68 Flojemon, Hero P. 3 20 61.31 69 Lacson, Julius E. 3 21 61.31 70 Lacson, Helen E. 3 22 61.31 71 Crisostomo, Melinda A. 3 23 61.31 72 De Leon, Erwin D. 3 24 61.31 73 Uy, Ronnie A. 3 25 61.31 74 Gamboa, Judy D. 3 26 61.31 75 Ramos, Joel N. 3 27 61.31 76 Servelo, Brisinni M. 3 28 61.31 77 Villaflor, Jeonie E. 3 29 61.31 78 Monillo, Even Rey A. 3 30 61.31 79 Ganancial, Jhoinie G. 3 31 61.31 80 Calma, Mercedita C. 3 32 61.31 81 Guillena, Aniver M. 3 33 61.31 82 Aguyapa, Ivan O. 3 34 61.31 83 Malazarte, Carmencita B. 4 1 72.22 84 Tecson, Ricson John M. 4 2 72.22 85 Hofilea, Leo Glenn M. 4 3 61.31 86 Tecson, Florence Marie M. 4 4 61.31 87 Bascar, Jeaneth A. 4 5 61.31 88 Toroy, Josefa M. 4 6 61.31 89 Bascar, Jesah Jay A. 4 7 61.31 90 Sumalinog, Mitchelle Anne P. 4 8 61.31 91 Abatayo, Jihan D. 4 9 61.31 92 Balaso, John Ray C. 4 10 61.31 93 Arroz, Charen A. 4 11 61.31 94 Lacorte, Junjun N. 4 12 61.31 95 Arroz, Susanita N. 4 13 61.31 96 Broola, Tomas M. 4 14 61.31 97 Guilaran, Rogie P. 4 15 61.31 98 Mansalon, Jocelyn P. 4 16 61.31 99 Toledano, Junelyn P. 4 17 61.31 100 Mansalon, Jimmy D. 4 18 61.31 101 Salgado, Rany V. 4 19 61.31 102 Anacleto, Cheryl M. 4 20 61.31 103 Dizon, Geraldine E. 4 21 61.31 104 Ebarsabal, Glenda E. 4 22 61.31 105 Gani, Jenny Rose R. 4 23 61.31 106 Madrona, Junely A. 4 24 61.31 107 Segovia, Elda D. 4 25 61.31 108 Abetona, Jovie B. 4 26 61.31 109 Santillana, Grace J. 4 27 61.31 110 Chua, Ma. Darlene M. 4 28 61.31 111 Jauod, Imelda J. 4 29 61.31 112 Alova, Nicholas T. 4 30 61.31 113 Intes, Rolly E. 4 31 72.22 114 Intes, Marivic G. 4 32 72.22 115 Saldoa, Lenny Rose I. 4 33 61.31 116 Pecha, Augusto N. 5 1 69.49 117 Gallenero, Jimmy F. 5 2 69.49 118 Castillo, Jessei, Jr. N. 5 3 61.31 119 Maceda, Virdie V. 5 4 61.31 120 Prudente, Jezrel B. 5 5 61.31 121 Prudente, Jeonrel B. 5 7 61.31 122 Yee, Mercy C. 5 9 61.31 123 Suela, Romeo C. 5 11 61.31 124 Jabagat, Glenn Ray P. 5 12 61.31 125 Makilan, Lani S. 5 13 61.31 126 Benjamin, Lea D. 5 14 61.31 127 Sillarico, Roselyn S. 5 15 61.31 128 Saldo, Marites S. 5 16 61.31 129 Yude, Rollie S. 5 17 61.31 130 Templado, Michael T. 5 18 61.31 131 Toroy, Micho Jay M. 5 19 61.31 132 Orlido, Jennifer D. 5 20 61.31 133 Suela, Evelyn A. 5 21 61.31 134 Daguno, Jesus, Jr. M. 5 22 61.31 135 Santinor, Jovie C. 5 23 61.31 136 Daguno, Doris M. 5 24 61.31 137 Bedayo, Adornado M. 5 25 61.31 138 Quiocson, Delia C. 5 26 61.31 139 Dewara, Rudy E. 5 27 61.31 140 Bejemino, Baby Luselle S. 5 28 61.31 141 Dewara, Justina Che-Che S. 5 29 61.31 142 Perez, Eufemia B. 6 1 61.31 143 Payomo, Carmela B. 6 2 61.31 144 Perez, Joy B. 6 3 61.31 145 Tranquilino, Charity O. 6 4 61.31 146 Ledesma, Roda H. 6 5 61.31 147 Ledesma, Pearl H. 6 6 61.31 148 Neri, Aileen S. 7 1 98.10 149 Guanco, Irene R. 7 2 61.31 150 Burata, Philip D. 7 3 61.31 151 Zamora, Joy J. 7 4 64.04 152 Daguno, Rommel D. 8 1 64.04 153 Sabido, Aida S. 8 2 65.40 154 Daguno, Genedina D. 8 3 61.31 155 Sabido, Ferdinand S. 8 4 61.31 156 Montizor, Jo-Ann V. 8 5 61.31 157 Gemillan, Carmen B. 8 6 61.31 158 Sebigan, Juanita S. 8 7 61.31 159 Burata, Nio D. 8 8 61.31 160 Goboli, Mary Joi P. 8 9 61.31 161 Madrid, Emil S. 8 10 61.31 162 Goboli, Leoncio, Jr. A. 8 11 70.85 163 Burata, Leo D. 8 12 70.85 Footnotes 1. Formerly: TCT No. T-167926. 2. See Annex for the masterlist of qualified beneficiaries.