Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc.

May 4, 2016 BIR RULING NO. 164-16 RA No. 7279; BIR Ruling No. 053-15 Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. Purok Masinulondon, Brgy. Punta Taytay, Bacolod City Attention: Florencia P. Lacbanes President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated December 10, 2015, endorsing the sale transaction between Angelina Pahila-Garrido et al., and Domingo F. Pahila Sr. Phase 2 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 a parcel of land, identified as Lot 641-B-3, Psd-06450-023348, being a portion of Lot 641-B, Psd-62488 covered by Transfer Certificate of Title (TCT) No. 092-2015000323 1 issued by the Registry of Deeds for Bacolod City is registered under the names of the following co-owners: Name Share/Proportion 1 Angelina Pahila-Garrido, married to Buenaventura Garrido 1/6 2 Ramon D. Pahila, married to Ida Go Pahila 1/6 3 Meraflor P. Bugador, married to Caesar Bugador 1/6 4 Domingo D. Pahila, married to Analy Olingco Pahila 1/6 5 Candido D. Pahila, married to Jesusa Demerin Pahila 1/6 6 Catalino D. Pahila, married to Erda Trizna Dianal 1/6 The aforesaid property is situated at Brgy. Punta Taytay, Bacolod City with an area of Twenty Four Thousand Eight Hundred Sixty Three square meters (24,863 sq.m.), more or less. Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. (TIN 401-441-981-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On December 29, 2014, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed Ten Thousand Nine Hundred Fifty Two square meters (10,952 sq.m.) portion of the subject property to Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. at an agreed price of Nine Million Four Hundred Eighteen Thousand Seven Hundred Twenty Pesos (P9,418,720.00). Pursuant to the certification issued by SHFC, 10,952 sq.m. out of 24,863 sq.m. covered by TCT No. 092-2015000323 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 2 For this purpose, Domingo F. Pahila Sr. Phase 2 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. cSEDTC In support of its request, Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. has completely submitted on December 23, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that 10,952 sq.m. portion of the subject property qualify and is actually a CMP project; 3) SHFC Letter-Guaranty No. CMP-1050; 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 TCTs and Latest Tax Declarations 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; and 10) 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 Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. of the 10,952 sq.m. out of 24,863 sq.m. covered by TCT No. 092-2015000323 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. 053-15 dated February 27, 2015) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 32 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. 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. 053-15 dated February 27, 2015) 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 Domingo F. Pahila Sr. Phase 2 Homeowners Association, Inc. Purok Masinulondon, Brgy. Punta Taytay, Bacolod City Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 Recto, Ricarte S. 1 1 60.72 2 Recto, Rosalita S. 1 2 60.72 3 Recto, Berlin S. 1 3 60.72 4 Recto, Romel S. 1 4 60.72 5 Estanque, Jo-an M. 1 5 60.72 6 Estanque, Jennifer M. 1 6 60.72 7 Orbita, Mary Ann P. 1 7 60.72 8 Cordeniel, Mary Joy C. 1 8 60.72 9 De la Cruz, Ernie M. 1 9 60.72 10 Clemen, Kristine M. 1 10 60.72 11 Retome, Edgar A. 1 11 60.72 12 Cojo, Maricar A. 1 12 60.72 13 Hisona, Jessy S. 1 13 60.72 14 Vargas, Jason S. 1 14 60.72 15 Estoral, Dixie C. 1 15 60.72 16 Pelaez, Mark J. 1 16 60.72 17 Fernandez, Consolacion J. 1 17 87.70 18 Maraon, Gerard J. 2 1 60.72 19 Sueo, Genevieve T. 2 2 60.72 20 Eswan, Luzel G. 2 3 60.72 21 Salazar, Sergulyn M. 2 4 60.72 22 Maraon, Gino J. 2 5 60.72 23 Miranda, Joy C. 2 6 62.07 24 Calosa, May Ann B. 2 7 62.07 25 Toroy, Mark Joseph M. 3 1 60.72 26 Retes, Mary Grace A. 3 2 60.72 27 Toroy, Mardy Joyce M. 3 3 60.72 28 Adlong, Rene N. 3 4 60.72 29 Premacio, Hernani, Jr. J. 3 5 60.72 30 Malabago, Fersly S. 3 6 60.72 31 Saluta, Ricky D. 3 7 60.72 32 Sabanal, Prezyl B. 3 8 60.72 33 Toroy Myla Jane M. 3 9 60.72 34 Manayaga, Rhoda Mae S. 3 10 60.72 35 Enterado, Maribeth S. 3 11 60.72 36 Tambanillo, Radin M. 3 12 60.72 37 Pallorina, Josie C. 3 13 60.72 38 Malabago, Felix C. 3 14 60.72 39 Arro, Lyra G. 4 2 60.72 40 Dela Vega, Antonio III Y. 4 3 60.72 41 Arro, Beverly G. 4 4 60.72 42 Lacbanes, Florencia P. 4 5 60.72 43 Villa, Anna Marie T. 4 6 60.72 44 Penascosa, Rasem 4 7 60.72 45 Mabaquiao, Lolita C. 4 8 60.72 46 Alisen, Maricel D. 4 9 60.72 47 Fuentes, Jose Ronny S. 4 10 60.72 48 Sumalinog, Lester S. 4 11 60.72 49 Carmona, Ruel G. 4 12 60.72 50 Estember, Mary Joy G. 4 13 60.72 51 Tonog, Sharon G. 4 14 60.72 52 Pancho, Luzyl T. 4 15 60.72 53 Lila, Ma. Angie M. 4 16 60.72 54 Fuentes, Jennifer Anne M. 4 17 60.72 55 Medina, Brian Ray V. 4 18 60.72 56 Medina, Rachel V. 4 19 60.72 57 Doromal, Cynthia D. 4 20 60.72 58 Villavecer, Danilo Jr. M. 4 21 60.72 59 Terrana, Rosalinda T. 4 22 60.72 60 Terrana, John Ruzzel T. 4 23 60.72 61 Flores, Divine Grace B. 4 24 60.72 62 Flores, Dodgie B. 4 25 60.72 63 Villaluna, Rema M. 4 26 62.07 64 Gabiota, Rosie N. 5 1 60.72 65 Burata, Lea D. 5 2 60.72 66 Garcia, Maylen F. 5 3 60.72 67 Talapiero, Rosita P. 5 4 60.72 68 Agriam, Ria Lourdes L. 5 5 60.72 69 Espinosa, Flordeliza P. 5 6 60.72 70 Lopez, Adelyn Joyce D. 5 7 60.72 71 Quilantang, Salvacion E. 5 8 60.72 72 Prado, Jonalyn B. 5 9 60.72 73 Quilantang, Ryan Vincent E. 5 10 60.72 74 Libanan, Kristine Joy V. 5 11 60.72 75 Banggud, Anacris M. 5 12 60.72 76 Matuguina, Marlon G. 5 13 60.72 77 Atadero, Agosto B. 5 14 60.72 78 Ledisa, Arlene C. 5 15 60.72 79 Tan, Aldwin G. 5 16 60.72 80 Bertuso, Cherry C. 5 17 60.72 81 Noble, Elmer G. 5 18 60.72 82 Catubigan, Amy B. 5 19 60.72 83 Rapiosa, Eugenio A. 5 20 60.72 84 Catape, Rhea A. 5 21 60.72 85 Tolentino, Joyce Ann T. 5 22 60.72 86 Pia, Patricia B. 5 23 87.70 87 Mahinay, Rex S. 5 25 90.40 88 Chavez, Johanna Marie P. 5 26 60.72 89 Salimbot, Bernadeth P. 5 27 60.72 90 Gelsanao, Maria Belinda O. 5 28 60.72 91 Mahinay, Mia Erin P. 5 29 60.72 92 Trinidad, Luzel M. 5 30 60.72 93 Herrera, Jinky D. 5 31 60.72 94 Tayco, Wenefredo T. 5 32 60.72 95 Jalandoni, Helen V. 5 33 60.72 96 Tayco, Windel T. 5 34 60.72 97 Mondragon, Zion Oliver G. 5 35 60.72 98 Mondragon, Frinzanne Keith G. 5 36 60.72 99 Mondragon, Kristian Chalmer G. 5 37 60.72 100 Dagohoy, Charlene R. 5 3 8 60.72 101 Kho, Nathalie T. 5 39 60.72 102 Vasquez, Regina N. 5 40 60.72 103 Murillo, Babylou G. 5 41 60.72 104 Cordeniel, Emily Q. 5 42 60.72 105 Incienzo, Rene B. 6 1 72.86 106 Daguno, Roberto T. 6 2 60.72 107 Sario, Herminia E. 6 3 60.72 108 Tacorda, Kris John E. 6 4 60.72 109 Manayaga, Ma. Cresilda S. 6 5 60.72 110 Arbas, Ma. Juree L. 6 6 60.72 111 Arbas, Ma. Jolliree L. 6 7 60.72 112 Nemenzo, Ma. Reegilie A. 6 8 60.72 113 Tuason, Marites D. 6 9 60.72 114 Dela Ramos, Elma G. 6 10 60.72 115 Villavecer, Kate M. 6 11 60.72 116 Estiler, Bonney A. 6 12 60.72 117 Tuason, Marco D. 6 13 60.72 118 Sillar, Nelijandro S. 6 14 60.72 119 Naquita, Jerson T. 6 15 60.72 120 Daguno, Ronel B. 6 16 60.72 121 Verde, Joemarie G. 6 17 72.86 122 Begasa, Jose Mat T. 6 19 60.72 123 Sagal, Robert E. 6 20 60.72 124 Pagdato, Arman P. 6 21 60.72 125 Guanco, Rona R. 6 22 60.72 126 Gemillan, Ronalin E. 6 23 60.72 127 Chan, Zenaida C. 6 24 60.72 128 Arisgado, Noel T. 6 25 60.72 129 Macariola, Veviene Flor E. 6 26 60.72 130 Ellanet, Nilo B. 6 27 60.72 131 Edianel, Sandra C. 6 28 41.83 132 Escalante, Leopoldo Ernesto L. 7 1 53.97 133 Sevilla, Daniel A. 7 2 60.72 134 Wendica, Josue M. 7 3 60.72 135 Sion, Christina C. 7 4 60.72 136 Arevalo, April Kate A. 7 5 60.72 137 Tupas, Veronica M. 7 6 60.72 138 Minerva, Venice Joy S. 7 7 60.72 139 Saluta, Michelle R. 8 1 60.72 140 Tuberde, Martin C. 8 2 60.72 141 Rosaot, Mary Grace R. 8 3 60.72 142 Reyes, Cecilia S. 8 4 60.72 143 Reyes, Mary Jane M. 8 5 60.72 144 Estrella, Jimmy M. 8 6 60.72 145 Estrella, Divina L. 8 7 60.72 146 Uma, Mary Jane D. 8 8 60.72 147 Jalandoni, Charlie V. 8 9 60.72 148 Sundon, Marwinda P. 8 10 60.72 149 Siy, Mary Antonette B. 8 11 60.72 150 Young, Neil Lambert S. 8 12 60.72 151 Escosora, Jennifer A. 8 13 60.72 152 Pason, Florence A. 8 14 60.72 153 Flores, Ramilo D. 8 15 60.72 154 Bagioso, Nia L. 8 16 60.72 155 Fernandez, Denia C. 8 17 60.72 156 Recomono, Nerissa N. 8 18 60.72 157 Naquita, Nicolas O. 8 19 60.72 158 Tapio, Daisy C. 8 20 60.72 159 Villanueva, Mary Grace C. 8 21 60.72 160 Linco, Rose C. 8 22 60.72 161 Cornelio, Janice C. 8 23 60.72 162 Retome, Remy A. 8 24 60.72 163 Retome, Lydia A. 8 25 60.72 164 Torres, Analyn R. 8 26 58.00 165 Duldulao, Prima P. 8 28 60.72 166 Bitsuso, Rodel D. 8 29 60.72 167 Tusan, Warlito S. 8 30 60.72 168 Gelio-agan, Ronald B. 8 31 60.72 169 Casiple, Divina L. 8 32 60.72 170 Cajotol, Ariel G. 9 1 60.72 171 Macaranas, Glenda C. 9 2 60.72 172 Moscoso, Analiza G. 9 3 60.72 173 Montao, Nessa B. 9 4 60.72 174 Villaluna, Gina V. 9 5 60.72 175 Caete, Zane Gabriel R. 9 6 60.72 176 Caete, Emmy R. 9 7 60.72 177 Rodico, Jose Pio M. 9 8 60.72 178 Caete, Kevyn Joyce R. 9 9 60.72 179 Perio, Mary Joy B. 9 10 60.72 Footnotes 1. Formerly: TCT No. T-167926. 2. See Annex for the masterlist of qualified beneficiaries.