BIR Ruling No. 140-15

May 4, 2015 BIR RULING NO. 140-15 RA No. 7279; BIR Ruling No. 109-13 Maravilla Urban Poor Homeowners Association, Inc . Lawingan, Labuan, Zamboanga City Attention: Raquel N. Oliva President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated January 23, 2015, endorsing the sale transaction between Preciosa Maravilla Climaco and Shirley O. Maravilla and Maravilla Urban Poor 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 Preciosa Maravilla Climaco and Shirley O. Maravilla (hereinafter referred to as Landowners) are the respective registered owners of two (2) parcels of land covered by two (2) Transfer Certificates of Title (TCT): Landowner TCT No. Tax Declaration No. Area (sq. m.) Preciosa Maravilla Climaco 1 T-187,535 1101003301322 20,122 Shirley O. Maravilla 2 T-147,982 1101003301321 20,127 total area 40,249 ===== both issued by the Registry of Deeds for the Zamboanga City. The aforesaid properties are situated at Labuan, Zamboanga City. Maravilla Urban Poor Homeowners Association, Inc. (TIN 425-528-258-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On September 11, 2014, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed the subject properties to Maravilla Urban Poor Homeowners Association, Inc. at an agreed price of Eighteen Million One Hundred Twelve Thousand Fifty Pesos (P18,112,050.00). Pursuant to the certification issued by SHFC, the subject properties covered by TCT Nos. T-187,535 and T-147,982 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 3 For this purpose, Maravilla Urban Poor 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 on November 26, 2014. In support of its request, Maravilla Urban Poor Homeowners Association, Inc. has completely submitted on January 30, 2014 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that the subject property qualifies and is actually a CMP project; 3) Certified true copy of the Deed of Absolute Sale to the Community Association; 4) Certified true copy of the Articles of Incorporation of the Community Association; 5) Certified true copy of the Masterlist of Qualified Beneficiaries duly certified by the SHFC; 6) Certified true copies of the TCTs and Latest Tax Declarations of the Property Sold to the Community Association; 7) Certified true copy of the Location Plan of the Lot Sold to the Community Association; 8) TIN ID/BIR Certificate of Registration of the seller and the Homeowner Association; and 9) 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 Maravilla Urban Poor Homeowners Association, Inc. of the subject properties covered by TCT Nos. TCT Nos. T-187,535 and T-147,982 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 Homeowners 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. 109-13 dated March 21, 2013) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 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 realties or their fair market values determined in accordance with Section 6(E) of the said Code, whichever is higher. (BIR Ruling No. 109-13 dated March 21, 2013) 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 titles 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 RMO15-2003. (BIR Ruling No. 109-13 dated March 21, 2013) 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 Sec. 24 (D)(1) the Tax Code of 1997, as amended. 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 Maravilla Urban Poor Homeowners Association, Inc .Lawingan, Labuan, Zamboanga City Name of Beneficiary Blk. No. Lot No. Total Area (sq.m.) 1 CECILE R. BADIANGO 1 1 189.63 2 MARILOU S. SALAZAR 1 2 189.63 3 AIME G. BALTAZAR 1 3 189.63 4 ROSEMARIE A. DULALAS 1 4 189.63 5 RONEL M. CRUZ 1 5 189.63 6 LENIE B. COTAMORA 1 6 189.63 7 MARIBEL Y. ANGELES 1 7 189.63 8 MELANIE E. NORILLA 1 8 189.63 9 DINA S. LAJA 1 9 189.63 10 HURAIDA K. AMSANG 1 10 189.63 11 NIHMA I. ANDANI 1 11 189.63 12 MUKSAD G. LANGKASAN 1 12 205.43 13 LAILA A. ABDULLA 1 13 205.43 14 VILMA V. BANTALA 1 14 205.43 15 AVELINA D. TAHIL 1 15 189.63 16 NORHANA S. MOHAMMAD 1 16 189.63 17 JUN-JUN T. ALIPON 1 17 189.63 18 NARHA S. MUSTALI 1 18 203.85 19 ASBIRIN N. KAHALUDDIN 1 19 203.85 20 RAYHAN M. ALIH 1 20 203.85 21 SURAIDA S. ABDULPARANG 1 21 203.85 22 AMINA A. KALAING 1 22 202.27 23 SARIPA M. SAHIBUL 1 23 203.85 24 ABDUL RAHMAN L. EBI 1 24 189.63 25 LYDIA S. ALIH 1 25 189.63 26 NANING N. JAMLALON 1 26 189.63 27 HJI. OMAR N. TAJALA 1 27 189.63 28 MISBA S. MOHAMMOD 1 28 189.63 29 INSARA A. SUSULAN 1 29 189.63 30 AKMAD A. SUSULAN 1 30 189.63 31 RAHAM A. SUSULAN 1 31 189.63 32 RAMSID A. SUSULAN 1 32 189.63 33 WILFRIDO T. AGCADILI 2 1 202.27 34 JONATHAN A. JIMENEZ 2 2 202.27 35 RUBY B. DE GUZMAN 2 3 202.27 36 ANGELICA S. ENILOG 2 4 202.27 37 ADELFA S. QUIOZAN 2 5 189.63 38 AGNES B. SERANIA 2 6 189.63 39 MA. THERESA J. DELOS SANTOS 2 7 189.63 40 CATHERINE J. GREGORIO 2 8 189.63 41 PHILIP D. RODRIGUEZ, JR. 2 9 189.63 42 JOSEPH G. MIGUEL 2 10 189.63 43 JERALDINE B. ELUMBRA 2 11 203.85 44 JOCELYN G. GAMIT 2 12 202.27 45 MICHELLE M. ENRIQUEZ 3 1 202.27 46 MARILOU F. ENRIQUEZ 3 2 202.27 47 ROLANDO H. GUMIPAT 3 3 189.63 48 RODELIA E. GUMIPAT 3 4 189.63 49 HERMINIA M. CONTURNO 3 5 189.63 50 JESUS S. TAYCO 3 6 189.63 51 MARIE JEAN R. AMILHUSSIN 3 7 189.63 52 ARMAN D. SARAIL 3 8 189.63 53 ANTHONY D. SARAIL 3 9 205.43 54 RAYMOND D. SARAIL 3 10 203.85 55 CRIZEL MAE V. TADIFA 4 1 189.63 56 NOEL V. MUDAI 4 2 189.63 57 JALMAIDA U. IRINGAN 4 3 189.63 58 SHIEVELYN A. SAITAS 4 4 189.63 59 KELVIN KLEIN S. TAHARI 4 5 189.63 60 YAHYA B. AMBOR 4 6 189.63 61 VINCENT P. VILLACRUSIS 4 7 189.63 62 RICHARD C. VENTURA 4 8 189.63 63 JOCELYN L. TAUPAN 4 9 173.83 64 HABER P. JOE 4 10 173.83 65 RUCAIYA I. KALAING 4 11 173.83 66 JAHIRON I. KALAING 4 12 173.83 67 ANITA M. ALIMUDDIN 5 1 189.63 68 ANHAR T. TARHATA 5 2 189.63 69 MAHATHIER T. TAUPAN 5 3 189.63 70 ABDUL RAHMAN O. SIDIG 5 4 189.63 71 NURMINA U. MANAMAT 5 5 189.63 72 ABDULMASER J. ISMAEL 5 6 189.63 73 KATHLEEN M. BALUAN 5 7 189.63 74 WAHID K. SAID 5 8 189.63 75 SATRA K. SAID 5 9 173.83 76 SONNY K. SAID 5 10 173.83 77 AHADIA L. SABUDDIN 5 11 173.83 78 EDRIS T. SABUDDIN 5 12 173.83 79 PARDINA A. MARJINI 6 1 189.63 80 HALIMA I. AJANI 6 2 189.63 81 KIRAH M. ALIH 6 3 189.63 82 NIMRA G. AKUNNANG 6 4 189.63 83 EDUARDO P. AMPO 6 5 189.63 84 DAISY P. MALOLOT 6 6 189.63 85 RAYMART P. MALOLOT 6 7 189.63 86 DAN N. CACHERO 6 8 189.63 87 LEVI N. CACHERO 6 9 173.83 88 BEBELYN D. VILLAFLORES 6 10 173.83 89 REYNALDO E. DASMARINAS 6 11 173.83 90 JOSE BENNY V. DARULLO 6 12 173.83 91 LEIGH REA L. RENDAL 7 1 173.83 92 MA. ALICIA M. PULLIDO 7 2 173.83 93 CRYSTAL U. LAMAR 7 3 189.63 94 MARRIETA S. DE VILLA 7 4 189.63 95 NOEL V. FULLIDO 7 5 189.63 96 JACOB C. LEOPARDAS 7 6 189.63 97 ROSEBELLA D. LIM 7 7 189.63 98 ALAN A. CANAGAN 7 8 189.63 99 CHOIE F. MILLANES 7 9 189.63 100 NURMINA T. BUROY 7 10 189.63 101 MARINA U. BANTALA 7 11 189.63 102 AVELINA Y. FABIAN 7 12 189.63 103 SHEILA A. FAMISARAN 7 13 189.63 104 CECILE H. TALASING 7 14 189.63 105 SHEILA KAYE E. SERRA 7 15 189.63 106 MARVIN J. FERRER 7 16 189.63 107 GLADYS H. TENEPRE 7 17 189.63 108 GLORIA H. TENEPRE 7 18 189.63 109 ELLEN A. CONCEPCION 7 19 189.63 110 JANET P. AZUR 7 20 189.63 111 MARK ANTHONY O. TUBO 7 21 262.32 112 RUTH LIZA S. FERMO 7 22 260.74 113 HELEN D. VELASQUEZ 7 23 172.25 114 JESSICA C. BUENAVENTURA 7 24 173.83 115 RAQUEL N. OLIVO 8 1 205.43 116 RAYMOND N. OLIVO 8 2 205.43 117 DIONEBETH N. PAQUETTE 8 3 189.63 118 ESTHPENELLE JOY C. IPANTO 8 4 189.63 119 CISERO SHEAN N. IPANTO 8 5 189.63 120 LUZIEL MAY O. NAIGAR 8 6 189.63 121 DANIEL O. NAIGAR, JR. 8 7 189.63 122 MARVIN O. NAIGAR 8 8 189.63 123 DANIEL O. NAIGAR 8 9 189.63 124 FELIXBERTO R. PEREZ, JR. 8 10 189.63 125 JEVAN RAE R. PEREZ 8 11 189.63 126 ELSIE M. JADMAN 8 12 189.63 127 ADEMAR M. JADMAN, JR. 8 13 189.63 128 DIONRICKMAR M. JADMAN 8 14 189.63 129 ROWENA T. NAIGAR 8 15 189.63 130 RISEN GRACE T. NAIGAR 8 16 189.63 131 QUERUBEN G. RAMALLOSA 8 17 189.63 132 LEAFRISER T. NAIGAR 8 18 189.63 133 JENIFER R. RAMALLOSA 8 19 189.63 134 MARICEL R. EJERCITO 8 20 189.63 135 ROBERT S. NAIGAR 8 21 189.63 136 CHERRY FAYE S. NAIGAR 8 22 189.63 137 LORALYNE D. TANGKAPA 8 23 205.43 138 AIDA N. PEREZ 8 24 205.43 139 CAROLINE L. BERJAME 9 1 203.85 140 BERNARD J. FERRER 9 2 203.85 141 MARIVIC N. FERRER 9 3 189.63 142 ARIEL I. AIZON 9 4 189.63 143 ALEX I. AIZON 9 5 189.63 144 AMETHYST O. OLLAVE 9 6 189.63 145 EMELY D. LEONOR 9 7 189.63 146 RHODORA S. DAAROL 9 8 189.63 147 LIZETTE D. DORMIDO 9 9 189.63 148 DORIS JADE H. TAGNAWA 9 10 189.63 149 ROBERT JOHN S. CORRALES 9 11 189.63 150 PERLA S. PAING 9 12 189.63 151 RENATO A. EVANGELIO 9 13 189.63 152 MA. VICTORIA D. EYANA 9 14 189.63 153 VIRGINIA U. CLARITO 9 15 189.63 154 CHYRMONETTE U. CLARITO 9 16 189.63 155 HYDE D. CLARITO 9 17 189.63 156 GEMMA P. BALAN 9 18 189.63 157 MA. CORAZON F. LIBRERO 9 19 205.43 158 EUGENIO H. PILIPINO 9 20 205.43 159 SARAH JANE E. ALAR 9 21 205.43 160 MARISSA P. OPSAR 10 1 199.11 161 MARLON L. MANGLICMUT 10 2 202.27 162 MICHELLE S. ALABAN 10 3 189.63 163 LILIBETH H. DELOS REYES 10 4 189.63 164 JANET T. RIBALDE 10 5 189.63 165 AMORE T. RIBALDE 10 6 189.63 166 MARLON B. JOVEN 10 7 189.63 167 FLERIDA A. REYES 10 8 189.63 168 JEMINA L. VILLANUEVA 10 9 189.63 169 EMILY R. PALMA 10 10 189.63 170 ELENA E. REVILLAS 10 11 189.63 171 ALEX S. BUYONG 10 12 189.63 172 JAYSON A. MACASO 10 13 189.63 173 GOLDA MARIE A. MACASO 10 14 189.63 174 TADZMAHAL G. MACASO 10 15 189.63 175 ARMINA S. ABUBAKAR 10 16 189.63 176 ALJAYFAR A. ABUBAKAR 10 17 189.63 177 GASPAR A. ABUBAKAR 10 18 189.63 178 DENSON H. TAGNAWA 10 19 189.63 179 LEAH GRACE P. FRANCISCO 10 20 189.63 180 IMELDA S. DOMINGO 10 21 199.11 181 UBAY S. SALVADOR 10 22 200.69 182 JOSE RUBENSO G. PORLAS 12 1 202.27 183 VICENTE C. PAGADOR 12 2 202.27 184 ELMER C. PABUALAN 12 3 202.27 185 ROSALINE E. CASIDSID 12 4 203.85 186 AYLENE E. CASIDSID 12 5 203.85 187 LEAH MAY R. OSTERO 12 6 205.43 188 RODELYN R. HAMID 12 7 189.63 189 JUBILEE R. SIMBOL 12 8 189.63 190 ONSITA L. MIGATO 12 9 189.63 191 NANGIE D. HABER 12 10 189.63 192 MA. JANETH H. SUENO 12 11 189.63 193 JEZ H. TAGNAWA 12 12 189.63 194 RUBINA C. MANGKABONG 12 13 189.63 195 SHIRLYN J. DELOS SANTOS 12 14 189.63 196 ASELA H. MARAVILLA 12 15 189.63 197 ARLINE P. LIBRERO 12 16 189.63 198 RUDINA V. SUAREZ 12 17 189.63 199 JACKELINE A. MONILLAS 12 18 189.63 200 SUSAN G. MONTERNEL 12 19 189.63 201 MARIO A. GALLEBO 12 20 189.63 202 ERISH NELSON B. MARAVILLA 12 21 194.37 203 JOHNNY ROCKY C. OPSAR 12 22 194.37 204 MERIAM M. CLARITO 12 23 189.63 205 EDGAR L. GALLEBO 12 24 189.63 206 ARMAN S. FERMO 12 25 189.63 207 VIVIAN M. FEDELINO 12 26 189.63 208 CHRISTOPHER P. LAMGO 12 27 189.63 209 FARIDA J. HARON 12 28 189.63 210 FERRY ROSE A. ESPERAT 12 29 189.63 Footnotes 1. Married to Abelardo A. Climaco, Jr. 2. Married to Inocencio Villahermoso. 3. See Annex for the masterlist of qualified beneficiaries.