Exemption of a Deed of Redemption from Documentary Stamp Tax

August 16, 1990 BIR RULING NO. 158-90 196 100-89 158-90 Gentlemen : This refers to your letter dated May 22, 1990 requesting in effect a ruling as to whether or not documentary stamp tax shall be paid by a registered owner of house and lot whose property had been mortgaged, foreclosed and eventually redeemed. cdtech It is represented that the Register of Deeds of Cainta Located in Pasig refused to register the certificate of redemption on your client's Mr. Jerry F. Bania property; that your said client is being required to pay the necessary documentary stamp tax amounting to P7,881.40 or 1% on the redemption price paid; that it is alleged that there is an existing BIR Regulation on the matter which said Register of Deeds could not produce; and that you are of the opinion that a deed of redemption is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code since the transaction which is subject to the documentary stamp tax is the conveyance of real property which is not so in redemption of real property which involved restoration of the property to the mortgagor debtor. Said deed of redemption is, however, subject to the three peso (P3.00) documentary stamp tax imposed by Section 188 of the Tax Code. In reply, please be informed that your opinion to the effect that a Deed of Redemption is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code, as amended is hereby confirmed. It is noted that under said Section of the Tax Code, the transaction which is subject to the documentary stamp tax is the conveyance of real property to the purchaser. This is not so in a redemption of real property which involves restoration of the property to the mortgagor-debtor from the purchaser. Said Deed of Redemption is, however, subject to the three-peso documentary stamp tax imposed by Section 188 of the Tax Code (BIR Ruling Nos. 530-88 and 100-89). Accordingly, the documentary stamp tax imposed under Section 196 of the Tax Code, as amended, is not due from the registered owner of a house and lot whose property had been mortgaged, foreclosed and eventually redeemed. However, the Deed of Redemption is subject to the three-peso documentary stamp tax imposed by Section 188 of the same Code. casia Very truly yours, (SGD.) JOSE U. ONG Commissioner