Tax Benefits of Beneficiaries of the National Government Center Housing Project

August 31, 1999 BIR RULING NO. 138-99 Sec. 25 R.A. 7279-000-00-138-99 Home Insurance and Guaranty Corporation 349 Sen. Gil J. Puyat Avenue Makati, Metro Manila Attention: Mr . Wilfredo F . Hernandez Gentlemen : This refers to your letter dated September 1, 1997 addressed to then Honorable Secretary of Finance Roberto de Ocampo, requesting, in behalf of the beneficiaries of the National Government Center Housing Project (NGCHP) properly classified as an area for priority development located in Barangays Commonwealth and Holy Spirit, Quezon City, and administered by the Housing and Urban Development Council (HUDCC) and Home Insurance and Guaranty Corporation (HIGC) along with other various government agencies, exemption from the payment of documentary stamp tax , registration fees and other fees for the issuance of transfer/condominium certificates of title. llcd It is represented that the National Government Center Housing Project came about when then President Cory Aquino issued Proclamation No. 137 excluding from the operation of Proclamation No. 1826 which established the National Government Center Site at Quezon City, 150 hectares of land within the Center for disposition to qualified beneficiaries; that pursuant to the Memorandum of Agreement (MOA) among the Department of Public Works and Highways (DPWH), Department of Environment and Natural Resources (DENR), Department of Finance (DOF), HIGC, HUDCC and National Government Center Housing Committee (NGCHC) dated May 4, 1989, the DOF, among others, agreed to recommend to the Bureau of Internal Revenue (BIR), the exemption of the aforesaid socialized housing project from the payment of all taxes and related charges in the transfer of titles; that DOF undertook to assist HIGC in obtaining the requested exemption from the BIR; that under the Urban Development and Housing Act (UDHA), socialized housing refers to housing programs and projects covering houses and lots or homelots only undertaken by the Government or the private sector for the underprivileged and homeless citizens, and which shall include sites and services development, long-term financing, liberalized terms on interest payments and such other benefits; that this definition was adopted in Section 2(c) of Revenue Regulations No. 9-93; that under UDHA and Revenue Regulations No. 9-93, " areas for priority development " refers to those areas declared as such by existing statutes and pertinent executive issuances; that considering NGCHP came into existence by virtue of Proclamation No. 137, then it may be considered as an area for priority development; that under Memorandum Order No. 151, also issued by then President Aquino dated January 27, 1988, which created the NGCHC and which provided the guidelines for the implementation of Proclamation No. 137, NGCHP was considered a prototype for a new and more expeditious alternative method of developing an area for priority development; and that the implementation of the housing project is now in full swing and the Administration has named it as a flagship project. In reply, please be informed that pursuant to Section 25 of Republic Act No. 7279, otherwise known as Urban Development and Housing Act of 1992, which provides as follows: "SEC. 25. Benefits . In addition to the benefits provided under existing laws and other related issuances to occupants of areas for priority development , zonal improvement program sites and slum improvement and resettlement program sites, such occupants shall be entitled to priority in all government projects initiated pursuant to this Act. They shall also be entitled to the following support services: "(a) . . . "(b) . . . "(c) an exemption from the payment of documentary stamp tax, registration fees, and other fees for the issuance of transfer certificate of titles; "xxx xxx xxx." (Emphasis supplied.) Since the National Government Center Housing Project (NGCHP) came about by virtue of Presidential Proclamation No. 137 issued by then President Aquino, segregating from the National Government Center Site a portion thereof consisting of one hundred fifty (150) hectares for disposition to qualified beneficiaries in consonance with its socialized housing project, and thereafter creating the National Government Center Housing Committee (NGCHC), then the same have effectively became one of this country's "areas for priority development" falling within the coverage of RA 7279. Thus, qualified beneficiaries of NGCHP are entitled to benefits provided for under the above-quoted Section 25, among others, exemption from payment of documentary stamp tax, registration fees, and other fees for the issuance of the certificates of title. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it shall be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) BEETHOVEN L. RUALO Commissioner of Internal Revenue