BIR Ruling No. 141-15

May 4, 2015 BIR RULING NO. 141-15 RA No. 7279; BIR Ruling No. 109-13 Ocean View Homeowners Association, Inc . Brgy. AltaVista, Ormoc City Attention: Alexander A. Noynay President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated January 26, 2015, endorsing the sale transaction between Maria Isabel Fiel, et al. and Ocean View 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 Maria Isabel Fiel, Roy Bernard Fiel, Geraldine Fiel, Mary Desiree Fiel, Sandra Angelica Fiel and Beula Coeli Fiel (hereinafter referred to as Landowners) are the registered owners of a parcel of land, identified as Lot 1631-B-1 of the subdivision plan, Psd-08-023532-D, being a portion of Lot 1631-B, Psd-08-008023-D covered by Transfer Certificate of Title (TCT) No. 51198 issued by the Registry of Deeds for the Ormoc City. The aforesaid property is situated at Brgy. AltaVista, Ormoc City with an area of Twenty One Thousand Twenty square meters (21,020 sq.m.), more or less. Ocean View Homeowners Association, Inc. (TIN 005-762-501-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On December 7, 2012, the parties executed a Deed of Absolute Sale whereby the Landowners transferred and conveyed the subject property to Ocean View Homeowners Association, Inc. at an agreed price of Ten Million Two Hundred Six Thousand Eight Hundred Seventeen and 14/100 Pesos (P10,206,817.14). Pursuant to the certification issued by SHFC, the subject property covered by TCT No. 51198 actually comprises a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Ocean View 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 January 6, 2015. In support of its request, Ocean View Homeowners Association, Inc. has completely submitted on January 30, 2015 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 TCT and Latest Tax Declaration 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's 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 Ocean View Homeowners Association, Inc. of the subject property covered by TCT No. 51198 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. 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 realty or its fair market value 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 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. 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 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 Ocean View Homeowners Association, Inc .Brgy. AltaVista, Ormoc City Name of Beneficiary Blk. No. Lot No. Total Area (sq.m) 1 OCAT, ERWIN M. 1 1 115.2044 2 MARTINITO, DANIEL C. 1 2 115.2044 3 MANSUETO, CLAUDIO S. 1 3 115.2044 4 LARINO, DINAH G. 1 4 115.2044 5 PAQUIDONGAN, NELJUN O. 1 5 115.2044 6 PARRILLA, MARJORIE L. 1 6 115.2044 7 CENTES, RHODORA A. 1 7 115.2044 8 ABANES, ARLENE B. 1 8 115.2044 9 EBCAS, MICHAEL B. 1 9 115.2044 10 MERAYON, LORNA B. 1 10 115.2044 11 LINGO, SHERYL MAY L. 1 11 115.2044 12 LAUDE, ROEL C. 1 12 115.2044 13 ARRADAZA, MARVIN A. 1 13 115.2044 14 TABIOLO, LUCRESIA C. 1 14 115.2044 15 CATAYOC, GOMERCINDO JR. R. 1 15 115.2044 16 ARBILON, ANGELITO V. 1 16 115.2044 17 ARBILON, JESSON V. 1 17 115.2044 18 GENARES, ROMEO R. 1 18 115.2044 19 ARBILON, MARILOU M. 1 19 115.2044 20 FLORENTINO, MARYCYRIL A. 1 20 115.2044 21 MATUGUINA, PAZ G. 1 21 137.6052 22 CASTAARES, MARICRIS G. 2 1 160.0061 23 SODOMIA, GUILLERMO M. 2 2 160.0061 24 MANDAL, EVELYN C. 2 3 160.0061 25 GARCISO, LLOYD M. 2 4 160.0061 26 FABIAN, GLEN Q. 2 5 160.0061 27 DELA CRUZ, JULIE ANNE LESLIE F. 2 6 144.0055 28 ALERTA, JEFFRY B. 2 7 144.0055 29 ALCOBER, JAKE S. 2 8 144.0055 30 DAFFON, JOEL M. 2 9 136.0052 31 NOYNAY, ALEXANDER A. 2 10 161.6062 32 GUTIEREZ, CATHERINE N. 2 11 160.0061 33 GUTIEREZ, TEOFILO P. 2 12 160.0061 34 MANGLE, ALBERTO JR. G. 2 13 160.0061 35 MANGLE, ALDREEN G. 2 14 160.0061 36 PEKITPEKIT, JULITO B. 2 15 160.0061 37 CASTAEDA, EUFRACIO JR. S. 2 16 144.0055 38 MANALO, GRETHEL T. 2 17 144.0055 39 ALCAREZ, MARCIAL M. 2 18 144.0055 40 PEREZ, DIOSCORA M. 2 19 136.0052 41 URBODA, KHRISTINE N. 2 20 134.4051 42 SANTILLAN, ALTHEA C. 3 1 128.0049 43 SANO/CIABU, RIKO/LORENA M. 3 2 115.2044 44 VILLARICO, MARY GRACE H. 3 3 115.2044 45 ACAB, RIZALINA C. 3 4 115.2044 46 CAPUYAN, JOCELYN L. 3 5 115.2044 47 CAPUYAN, MARIA SARAH O. 3 6 115.2044 48 ESTOPIN, JOCELYN F. 3 7 115.2044 49 MERIN, RAMERO S. 3 8 115.2044 50 SUGANO, FIDEL M. 3 9 115.2044 51 JAO, EDWIN G. 3 10 115.2044 52 NAZARIO, CELERINO JR. A. 3 11 144.0055 53 CASTAEDA, HANZEL E. 3 12 128.0049 54 ASIS, MARGIE M. 3 13 115.2044 55 REALES, TERESITA A. 3 14 115.2044 56 MAGNO, DIVINA L. 3 15 115.2044 57 SALSADO, AQUILINO L. 3 16 115.2044 58 QUILING, REYNATO E. 3 17 115.2044 59 ESTOPIN, IVIE A. 3 18 115.2044 60 BOBIER, ROSALINDA R. 3 19 115.2044 61 LATONIO, ELIZA B. 3 20 115.2044 62 YAP, NIEVES B. 3 21 115.2044 63 AGCANG, GREGORIO L. 3 22 123.2047 64 PEREZ, REYNALDO C. 4 1 128.0049 65 SINOY, MELODINA C. 4 2 115.2044 66 MIANO, RANIE S. 4 3 115.2044 67 YU, TRINIDAD M. 4 4 115.2044 68 MARTIONEZ, ALEXANDER A. 4 5 115.2044 69 FLORES, PETERSON A. 4 6 115.2044 70 FLORES, PEDRITO B. 4 7 115.2044 71 SULLA, GWENDOLYN N. 4 8 115.2044 72 NALDA, MARK N. 4 9 115.2044 73 CATIPAY, ALLEN NIO T. 4 10 115.2044 74 MANTUA, ANAFLOR B. 4 11 128.0049 75 CATAYAS, NELITA K. 4 12 115.2044 76 COLMINAS, BERNADETH N. 4 13 115.2044 77 LAUDE, MARILOU E. 4 14 115.2044 78 ZAMORA, JAMES PATRICK Z. 4 15 115.2044 79 TORREGOSA, LENY C. 4 16 115.2044 80 TORREGOSA, JASON C. 4 17 115.2044 81 NAUL, ARNEL W. 4 18 115.2044 82 COSTELO, ELGY L. 4 19 115.2044 83 PELONES, RENO C. 4 20 115.2044 84 CATIPAY, JOHN T. 4 21 158.4060 85 ALVARADO FATIMA M. 5 1 128.0049 86 APUYA, ANAMARIA P. 5 2 115.2044 87 SENILLO, MA. CLEOFE G. 5 3 115.2044 88 SENILLO, JOANNA G. 5 4 115.2044 89 ROLDAN, MARICEL J. 5 5 115.2044 90 RICARTE, GLENDA S. 5 6 115.2044 91 MAURE, MA. VIOLITA F. 5 7 115.2044 92 BULAWIT, ALMA T. 5 8 115.2044 93 YTANG, DANICHE A. 5 9 115.2044 94 SACAY, ROWENA G. 5 10 150.4057 95 ROSAL, GINA LINDA P. 5 11 128.0049 96 ABLEN, SALVIO P. 5 12 115.2044 97 DUMAGUIT, QUEENIE B. 5 13 115.2044 98 CAYA, DANILO L. 5 14 115.2044 99 PIL, MARTHIN S. 5 15 115.2044 100 PIL, ANA CRISTINA S. 5 16 115.2044 101 PARAC, MYRA D. 5 17 115.2044 102 JUMAO-AS, RUTH R. 5 18 115.2044 103 ROJAS, RENE BOY C. 5 19 115.2044 104 DONAIRE, RAMONITO R. 5 20 128.0049 105 DUARTE, CERISE N. 6 1 120.0046 106 CHUA, ELVIRA M. 6 2 115.2044 107 CORTES, JEREMEA C. 6 3 115.2044 108 SY, SHERLITA S. 6 4 115.2044 109 RAMOS, BENJAMIN C. 6 5 115.2044 110 RAMOS, MARILYN L. 6 6 115.2044 111 GABRIEL, RONELLA J. 6 7 115.2044 112 MONDRANO, SHELLA M. 6 8 115.2044 113 CATAYOC, CAMELO R. 6 9 158.4060 114 DUARTE, CHARLENE C. 6 10 120.0046 115 GARCIA, EDWIN D. 6 11 115.2044 116 VALLECERA, FILOMENA C. 6 12 115.2044 117 GASANG, CLAUDIO JR. S. 6 13 115.2044 118 LINTE, WILMA O. 6 14 115.2044 119 FIEL, NORBERT B. 6 15 115.2044 120 TUANDO, EDGAR D. 6 16 115.2044 121 BAEZ, FRANCY T. 6 17 115.2044 122 MAGNO, CAROLINA L. 6 18 124.8047 123 BAGAHANSOL, PATERNO P. 7 1 115.2044 124 VILLAGRACIA, LUZVIMINDA O. 7 2 115.2044 125 COBAR, ROVI D. 7 3 115.2044 126 ALFORO, ROSELYN T. 7 4 115.2044 127 ALFORO, HONEYLYN JOY T. 7 5 115.2044 128 ALFORO, CYRIL BENEDICT T. 7 6 115.2044 129 CATARUS, MANNY J. 7 7 115.2044 130 BALALITAN, MARIBEL L. 7 8 129.6049 131 BAUTISTA, RONIE JUN S. 7 9 115.2044 132 MERCADER, MARIO JR. C. 7 10 115.2044 133 MERCADER, MA. FLOR T. 7 11 115.2044 134 LAURENTE, ADONIS V. 7 12 115.2044 135 ARRADAZA, AILEENE P. 7 13 115.2044 136 MATURAN, EDGAR A. 7 14 115.2044 137 BATOON, JULIUS JR. N. 7 15 115.2044 138 PINO, MA. ELLA M. 7 16 115.2044 139 LLAMAS, ALTER O. 8 1 164.8063 140 GARRIDO, JEANA R. 8 2 166.4063 141 MANUBAG, CARMELA B. 9 1 153.6058 142 GODOY, RUENA M. 9 2 153.6058 143 BUENO, DELIA V. 9 3 153.6058 144 ACABAL, MARIFE A. 9 4 115.2044 145 VILLARMINO, ARVIN C. 9 5 115.2044 146 VILLARMINO, ALTHEA M. 9 6 115.2044 147 CANILLO, JONERONE A. 9 7 115.2044 148 CANILLO, NENITH A. 9 8 115.2044 149 ARRIESGADO, ROEL N. 9 9 115.2044 150 ORILLANO, VIRNIE A. 9 10 115.2044 151 NEBRIA, LEO LITO B. 9 11 115.2044 152 ARELLANO, RAMIL Q. 9 12 115.2044 153 ARELLANO, RIGOR Q. 9 13 115.2044 154 INDOLOS, RAQUEL R. 9 14 115.2044 155 RAMOS, RONALD L. 9 15 115.2044 156 TAN, KATRINA C. 9 16 115.2044 157 PEREZ, DIANNE T. 9 17 115.2044 158 MANAWATAO, DIONESIO A. 9 18 115.2044 159 VILLANUEVA, TEODORICO JOSE S. 9 19 115.2044 160 SUMAMBOT, MELODINA L. 9 20 115.2044 161 LIMOSNERO, EDWIN F. 9 21 120.0046 162 ESTRERA, BELLY M. 10 1 115.2044 163 CORMANES, IAN S. 10 2 121.6046 164 JABALLA, RODOLFO JR. O. 10 3 115.2044 165 DE ASIS, SNOOKY D. 10 4 115.2044 166 LLANTO, LUISYULGEN E. 10 5 115.2044 167 CAYANONG, JESSIE B. 10 6 115.2044 168 CAYANONG, JOEL B. 10 7 115.2044 169 PATON-OG, ROSELLE P. 10 8 115.2044 170 RONATO, JEAN M. 10 9 115.2044 171 BUO, NICANOR M. 10 10 176.0067 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.