BIR Ruling No. 143-15

May 4, 2015 BIR RULING NO. 143-15 RA No. 7279; BIR Ruling No. 294-14; BIR Ruling No. 283-14 Centerville Homeowners Association, Inc . Sitio Gitna, Barangay Sto. Cristo, San Jose del Monte City, Bulacan 3023 Attention: Mr. Ruben S. Ingusan President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated June 27, 2014, endorsing the sale transaction between Irene Porciuncula-Cruz , and Centerville 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 Irene Porciuncula-Cruz (TIN 293-121-038-000) is the registered owner of a parcel of land covered by: Transfer Certificate of Title Area (sq. m.) Tax Declaration No. 040-2011013997 9,954 99-21016-34840 issued by the Registry of Deeds for Meycauayan, Bulacan. The aforesaid property is situated at Brgy. Sto. Cristo, San Jose del Monte City, Bulacan. Centerville Homeowners Association, Inc . (TIN 250-758-324-000), on the other hand, is a homeowners' organization registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. 13869. On November 4, 2011, the parties executed a Deed of Absolute Sale whereby the owner transferred and conveyed Eight Thousand Five Hundred Three (8,503 sq.m.) portion of the subject property to Centerville Homeowners Association, Inc. at an amount of Eight Hundred Pesos (Php800.00) per square meter or at a total agreed price of Six Million Eight Hundred Two Thousand Four Hundred Pesos (Php6,802,400), Philippine Currency. Pursuant to a Certification issued by SHFC, Eight Thousand Five Hundred Three (8,503 sq.m.) out of the Nine Thousand Nine Hundred Fifty Four square meters (9,954 sq.m.) covered by TCT No. 040-2011013997 actually comprise a CMP Project and shall be proportionately distributed to the association's one hundred forty one (141) qualified member-beneficiaries (Annex A). For this purpose, Centerville Homeowners Association, Inc . secured a housing loan under the CMP, a financing assistance program of the Social Housing Finance Corporation a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). In support of its request, Centerville Homeowners Association, Inc . has completely submitted the following documents: 1) 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 Letter of Guaranty issued by the SHFC; 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; 7) Certified true copies of the TCT and Latest Tax Declaration 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; 10) BIR Form 2000-OT (Documentary Stamp Tax Return); and 11) 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 landowner who sold her property for use in a socialized housing project is exempt from the payment of capital gains tax. Such being the case, the sale by Irene Porciuncula-Cruz to Centerville Homeowners Association, Inc ., in so far as the Eight Thousand Five Hundred Three (8,503 sq.m.) portion of the property covered by TCT No. 040-2011013997 is concerned, 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. 294-14 dated July 23, 2014 ) 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 landowner is liable to pay the documentary stamp tax on the documents 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. 283-14 dated July 7, 2014 ) 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 Nos. 294-14 dated July 23, 2014 and 283-14 dated July 7, 2014 ) 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 seller is 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 A Centerville Homeowners Association, Inc .Sitio Gitna, Sto. Cristo, San Jose Del Monte City, Bulacan Master list of Beneficiaries Name of Beneficiary Block No. Lot No. Total Lot Area 1 Jasmin J. Bayan 1 1 72.05 2 Nenita P. Nombre 1 2 57.64 3 Michelle E. Porciuncula 1 3 57.64 4 Joel E. Porciuncula 1 4 57.64 5 Medina A. Porciuncula 1 5 57.64 6 Joselito A. Porciuncula 1 6 57.64 7 Jennifer P. Dela Cruz 1 7 57.64 8 Alex Jerson C. Ballori 1 8 57.64 9 Manuel B. Fuller, Jr. 1 9 57.64 10 Nelson C. Maximo 1 10 57.64 11 Leoncio D. Cruz, Jr. 1 11 57.64 12 Joselito Sd. Llantos 1 12 57.64 13 Marlon D. Padilla 1 13 57.64 14 Leo D. Eugenio 1 14 57.64 15 Laarni D. Eugenio 1 15 57.64 16 Rafael D. Eugenio 1 16 57.64 17 Pantalleon A. Eugenio 1 17 57.64 18 Judith A. Torres 1 18 57.64 19 Evangeline R. Bueno 1 19 57.64 20 Blena E. Requioma 1 20 57.64 21 Michelle M. Ancheta 1 21 57.64 22 Norlito S. Sabado 1 22 57.64 23 Marigen V. Cleto 1 23 57.64 24 Mellanie Cleto Cruz 1 24 57.64 25 Herminia M. Lustria 1 25 57.64 26 Mario M. Ocong 1 26 57.64 27 Pedro A. Docto, Jr. 1 27 57.64 28 Lucio A. Dotosme 1 28 57.64 29 Winnie D. Tomas 1 29 57.64 30 Magelyn D. Fernandez 1 30 57.64 31 Jocelyn B. Dotosme 1 31 57.64 32 Derio A. Dotosme 1 32 57.64 33 Danilo G. Salvador 1 33 57.64 34 Joel A. Bernales 1 34 57.64 35 Ruby U. Toloza 1 35 57.64 36 Joel P. Braga 1 36 57.64 37 Jose Larry L. Ignao 1 37 57.64 38 Rosalinda S. Ignao 1 38 57.64 39 Elsa Z. Pilongo 1 39 57.64 40 Mark Junel Z. Pilongo 1 40 57.64 41 Marlon T. Aranas 1 41 57.64 42 Rizza V. Padual 1 42 57.64 43 Jonathan H. Camodoc 1 43 57.64 44 Sebastian R. Camangeg 1 44 57.64 45 Teresita I. Tebigar 1 45 57.64 46 Raymond A. Pasiola 1 46 57.64 47 Angela T. Gabriel 1 47 57.64 48 Sergio P. Talacay Jr. 1 48 57.64 49 Teresita B. Dangco 1 49 67.72 50 Maricel S. Ponce 2 4 57.64 51 Loren C. Decena 2 5 57.64 52 Ruben S. Ingusan 3 1 61.96 53 Charmane J. Ingusan 3 2 63.40 54 Shella J. Ingusan 3 3 63.40 55 Mylene J. Dulay 3 4 63.40 56 Alma M. Nacuray 3 5 61.96 57 Amalia E. Agustin 3 6 57.64 58 Alanrey E. Agustin 3 7 57.64 59 Ernesto E. Villaraza 3 8 57.64 60 Manolo C. Egamino 3 9 57.64 61 Nora B. Valderama 3 10 57.64 62 Eduardo C. Egamino 3 11 57.64 63 Ricardo S. Paelma 3 12 60.52 64 Ludevina E. Tercias 3 13 61.96 65 James Lappay 4 1 63.40 66 Richard A. Babaran 4 2 64.84 67 Adelaida B. Astillero 4 3 64.84 68 Warlito Dm. Gogolin 4 4 64.84 69 Merlin Dm. Gogolin 4 5 63.40 70 Jose A. Paguinto 4 6 57.64 71 Paula Luz Z. Quevedo 4 7 57.64 72 Jamie Joyce S. Villanueva 4 8 57.64 73 Julieta A. Binondo 4 9 57.64 74 Rebecca C. Lapida 4 10 57.64 75 Emmanuel B. De Vera 4 11 57.64 76 Francis T. Padual 4 12 59.08 77 Jennie P. Talaue 4 13 60.52 78 Roberto A. Dotosme 5 1 64.84 79 Rosalie M. Sabado 5 2 66.28 80 Avegaile S. Sabado 5 3 66.28 81 Antoniette C. Samantra 5 4 66.28 82 Imelda T. Dalunag 5 5 64.84 83 Leonardo B. Lista 5 6 57.64 84 Almodiel A. Awis 5 7 57.64 85 Salvador B. Mengullo 5 8 57.64 86 Nur-Jenhees Anne A. Awis 5 9 57.64 87 Josefina A. Monsanto 5 10 57.64 88 Lolita S. Guanzon 5 11 57.64 89 Michelle J. Granada 5 12 59.08 90 Jenifer C. Alferez 5 13 60.52 91 Mc George A. Awis 6 1 66.28 92 Kinjurie Anne A. Awis 6 2 67.72 93 Analiza P. Manuel 6 3 67.72 94 Ronald S. Mendoza 6 4 67.72 95 Raquel S. Mendoza 6 5 66.28 96 Analyn O. Capatian 6 6 57.64 97 Elizabeth F. Samonte 6 7 57.64 98 Eduardo M. Lim 6 8 57.64 99 Rodolfo M. Blanco 6 9 57.64 100 Jose Raul Dm. Gogolin 6 10 57.64 101 Cecilia S. Batallon 6 11 57.64 102 Henry C. Gallon 6 12 57.64 103 Zarah Joy S. Bernardino 6 13 59.08 104 Danilo V. Diaropra, Jr. 7 1 66.28 105 Tita T. Loneza 7 2 67.72 106 Esperidion L. Quidor 7 3 67.72 107 Rolando C. Clavacio 7 4 67.72 108 Beverly A. Villafranca 7 5 66.28 109 Rowena B. Tiongco 7 6 57.64 110 Sonny T. Mayo 7 7 57.64 111 Gina B. Lazaro 7 8 57.64 112 Marie Grace S. Mayo 7 9 57.64 113 Ryvonette Ann V. Bries 7 10 57.64 114 Alberto C. Brul 7 11 57.64 115 Harvey V. Bries 7 12 59.08 116 Mary Jane Cacho 7 13 60.52 117 Milagros S. Justo 8 1 67.72 118 Cherry M. Batac 8 2 69.17 119 Evangeline M. Sison 8 3 69.17 120 Hazel B. Sison 8 4 69.17 121 Joey F. Flores 8 5 67.72 122 Erlinda T. Agnasin 8 6 57.64 123 Ronald A. Marcelo 8 7 57.64 124 Nery A. Etoc 8 8 57.64 125 Jocelyn C. Asis 8 9 57.64 126 Josefina J. Lapitan 8 10 57.64 127 Marites Dl. Guin 8 11 57.64 128 Ronaldo M. Mortos 8 12 59.08 129 Christopher R. Bustillo 8 13 60.52 130 Orlando A. Pasiola 9 1 67.72 131 Frederick A. Badidles 9 2 69.17 132 Noli E. Caballero 9 3 69.17 133 Kenneth P. Talacay 9 4 69.17 134 Elena P. Talacay 9 5 67.72 135 Ronnel C. Robel 9 6 57.64 136 Ria Katrina Robel 9 7 57.64 137 Marilou O. Dalisay 9 8 57.64 138 Jannah May H. Rubenecia 9 9 57.64 139 Gwendolyn S. Rubenecia 9 10 57.64 140 Rachel I. Rubenecia 9 11 76.37 141 Rochelle I. Rubenecia 9 12 60.52 TOTAL: 8,503.00 ======