Don Vicente Villas Homeowner's Association, Inc. Phase 4

May 4, 2016 BIR RULING NO. 166-16 Section 32, RA No. 7279; BIR Ruling No. 053-15 Don Vicente Villas Homeowner's Association, Inc. Phase 4 Brgy. Pulo, Cabuyao, Laguna Attention: Michael R. Mejia President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated December 14, 2015, endorsing the sale transaction between Eleuterio H. Bella, Jr. and Don Vicente Villas Homeowner's Association, Inc. Phase 4 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 Eleuterio H. Bella, Jr., (married to Magdalena Cruz) is the registered owner of a parcel of land, identified as Lot 1-A of the subd. plan Psd-04-0192736, being a portion of Lot 1, Psu-48436 LRC Rec. No. 49140 covered by Transfer Certificate of Title (TCT) No. T-667742 issued by the Registry of Deeds for the Calamba City. The aforesaid property is situated at Brgy. Pulo, Cabuyao, Laguna with an area of Thirteen Thousand Nine Hundred Thirty Two square meters (13,932 sq.m.), more or less. Don Vicente Villas Homeowner's Association, Inc. Phase 4 (TIN 250-848-908-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On August 24, 2015, the parties executed a Deed of Absolute Sale whereby Eleuterio H. Bella, Jr. transferred and conveyed the subject property to Don Vicente Villas Homeowner's Association, Inc. Phase 4 at an agreed price of Twenty Million Three Hundred Seventy Six Thousand Three Hundred Eighty Five Pesos and 92/100 (P20,376,385.92). Where Nine Thousand Seven Hundred Sixty square meters (9,760 sq.m.) shall be under the CMP at an agreed price of Fourteen Million Two Hundred Seventy Four Thousand Five Hundred Eighty Five Pesos and 60/100 (P14,274,585.60). Pursuant to the certification issued by SHFC, 9,760 sq.m. out of 13,932 sq.m. covered by TCT No. T-667744 actually comprises a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Don Vicente Villas Homeowner's Association, Inc. Phase 4 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. In support of its request, Don Vicente Villas Homeowner's Association, Inc. Phase 4 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 9,760 sq.m. portion of the subject property qualifies and is actually a CMP project; 3) SHFC Letter of Guaranty No. 1110; 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; CAIHTE 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 Eleuterio H. Bella, Jr. to Don Vicente Villas Homeowner's Association, Inc. Phase 4 of 9,760 sq.m. out of 13,932 sq.m. covered by TCT No. T-667742 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 landowner is 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 ATTACHMENT DON VICENTE VILLAS HOMEOWNER'S ASSOCIATION, INC. PHASE 4 Brgy. Pulo, Cabuyao, Laguna Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 CUASAY RUFFA RIVAS 1 1 57.38 2 OLORAZA ELBERT PAUL SALAZAR 1 2 57.38 3 GUERRERO MARUJA ESTURES 1 7 57.38 4 COLEGIO JEN HANNAH JAMULOD 1 8 57.38 5 CIPRIANO AUGUSTO MACATOL 1 13 57.38 6 CIPRIANO CAMILLE BAAS 1 14 57.38 7 BORNASAL RIZALDY CLEOFE 1 19 57.38 8 LLANTE ZENAIDA ALMONTE 1 20 57.38 9 MEJIA ROSALINDA ROMERO 2 1 64.55 10 MEJIA MAY LIZA ROMERO 2 2 64.55 11 CATIPON RONALD CHAVEZ 2 5 57.38 12 ROMERO HIPOLITO V. 2 6 57.38 13 CATIPON MARIBETH TABADA 2 7 57.38 14 MIANA MARLON D. 2 8 57.38 15 CALDITO LENIE C. 2 9 57.38 16 MANALO SINFOROSO BOUNGALING 2 10 57.38 17 CABICO FRANCISCO JR. DE GUZMAN 2 11 57.38 18 MANALO ERWILSON BANCORO 2 12 57.38 19 DELA CRUZ BERNARD RIMAS 2 13 57.38 20 LIZA RUSTOME JAVA 2 15 57.38 21 DRIZ CORINA B. 2 17 71.73 22 ABERIN MARCELINO BAUTISTA 3 1 59.17 23 MENDEZ ANTONIETA BANGUIS 3 2 57.38 24 DE GUZMAN JASMIN LOGO 3 3 59.17 25 VALDEZ ESMERALDO JR. BASSIG 3 5 57.38 26 HERNANDEZ RONILO M. 3 6 57.38 27 VALDEZ JOANNE BASSIG 3 7 57.38 28 RACE ROCO BANGAYEN 3 9 57.38 29 RACE MELODIA BANGAYEN 3 10 57.38 30 MEJIA MICHAEL ROMERO 3 11 57.38 31 MEJIA MARY ROSE ROMERO 3 12 57.38 32 RACE DRIGO BANGAYEN 3 13 57.38 33 CONSTANTINO JHON COLLADO 4 4 57.38 34 TULIAO RHANDY CASIDSID 4 5 57.38 35 BRITO LUISA SOBERANO 4 6 57.38 36 TULIAO DORILYN CASIDSID 4 7 57.38 37 CINCO JOSEPH CRUZ 4 8 57.38 38 ALMALVEZ ERWIN FREYRA 4 13 57.38 39 ROMERO PATRICK JOHN M. 4 14 57.38 40 TACTACUN RICHEAL ARAULIA 4 15 57.38 41 ROMERO RICARDO V. 4 16 62.76 42 ANZANO ANA DIVINAGRACIA 4 17 57.38 43 GAMBOA ENILLEN MECCA 4 18 64.55 44 YATCO ALVIN LACAR 4 19 60.97 45 CABICO JESSICA DE GUZMAN 5 1 64.55 46 CARAGA GRACE GALISTE 5 2 64.55 47 CALDITO NELITO CELEBRIA 5 3 57.38 48 GALESTE ROMELO PENDOS 5 4 57.38 49 LABITIGAN JOSE ACE 5 5 57.38 50 ABAS DONALIN ABANILLA 5 7 57.38 51 GABIN MARIO BALASE 5 9 57.38 52 PANILA STEFANIE MAY BUSA 5 14 57.38 53 PANILA NERELYN SUMAGPANG 5 16 57.38 54 PANILA MERVIN B. 5 18 57.38 55 PANILA ERNIE B. 5 20 57.38 56 SANTIAGO ERLINDA YABOT 5 22 57.38 57 SANTIAGO JULIE YABOT 5 24 57.38 58 TINASAS EDNA BILASA 5 27 57.38 59 ATILLANO MARILOU ARENIO 5 28 57.38 60 TINASAS BLECILDA BILASA 5 29 57.38 61 ATILLANO RANDY ARENIO 5 30 57.38 62 TINASAS NOLLYNA BILASA 5 31 57.38 63 GEOCA CARLITO G. 5 33 57.38 64 REGALADO DANDY DANIOUS 5 35 57.38 65 YTAC LIZEL OCAMPO 5 37 75.31 66 RAMBOYONG EMELITA BARCI 6 3 57.38 67 DE OCAMPO MARY CRIS M. 6 4 57.38 68 TINASAS RODOLFO BILASA 6 5 57.38 69 BENITEZ RAYMUNDO SEOLO 6 6 57.38 70 NACASABOG AGAPITA JEMINIA 6 7 57.38 71 SANGALANG CRISANTA A. 6 8 57.38 72 NACASABOG ROSARIO JEMINIA 6 9 57.38 73 ALBUERO CHRISTOPHER PARALE 6 10 57.38 74 CANOY ARLENE V. 6 12 57.38 75 DELA ROSA MARK ANTHONY LORING 6 13 57.38 76 MAASIM LORNA LANSIGAN 6 14 57.38 77 RIVERO DIMPHNA A. 6 16 57.38 78 ORINE LAYNE OBINARYO 6 17 57.38 79 RIVERO FRANCIS AVEN 6 18 57.38 80 SALAS BERNADETTE ABAJENSIA 6 24 57.38 81 SUACILLO DARIUS JUMAWID 6 26 57.38 82 LAGARTO DELMA P. 6 30 57.38 83 IROG ISAGANI ALMONTE 6 32 57.38 84 CABICO LUZVIMINDA DE GUZMAN 6 33 57.38 85 PEAPE MARIA LUISA VELASCO 6 34 57.38 86 MACADAEG JIMEFER FABRIGAS 6 35 57.38 87 PAMENTAHON EVELYN S. 6 37 69.93 88 OLIMPIADA MIGUELA LIZARDO 7 1 62.76 89 CIPRIANO JOSE M. 7 2 64.55 90 ALBANO TYRONE COLOMA 7 3 57.38 91 DESEMARANA ELEANOR A. 7 4 57.38 92 ARTATES VERGELIO AVELINO 7 5 57.38 93 PEREZ EMILIO VENTURA 7 6 57.38 94 CAMPOLLO ROSALIE REBOLLA 7 7 57.38 95 ORDOA JESUSA VENTURA 7 8 57.38 96 GUILLERMO ALDRIN BEATRINGO 7 9 57.38 97 MOSTOLES JOEL LAGMAY 7 10 57.38 98 LEGASTO JR. EDGARDO FORMARAN 7 12 57.38 99 RUBLICO RANDY PENAMANTE 7 14 57.38 100 MONTERO RENALI PEPITO 7 16 57.38 101 BENDOY JOEL DASOLVO 7 18 57.38 102 MORFE RALPH JUSTINE C. 7 26 57.38 103 BARRIENTOS MARILOU M. 8 1 62.76 104 DILLA MILLER ARGENTE 8 2 64.55 105 GARFIN KRISTI L. 8 3 57.38 106 LIRIO LINDA L. 8 5 57.38 107 PELAYO ANDREA LABATETE 8 13 57.38 108 NABARTE JOEBERT LONGARES 8 14 57.38 109 SOLANO CONSISA PELAYO 8 15 57.38 110 DOLOR FELOMINA A. 8 17 57.38 111 ANOL MARY JEAN CAPINIG 8 19 57.38 112 LORENZO CONCEPCION PACHA 8 21 57.38 113 MANCERA EMMA OLIQUINO 8 22 57.38 114 RONE GREGORIO BENDANILLO 8 23 57.38 115 ANOL MARIVIC CAPINIG 8 24 57.38 116 RODA MARY JANE ACHINA 8 25 57.38 117 ANOL VERGEL CAPINIG 8 26 57.38 118 BALCE JOY ANDAL 8 27 60.97 119 ALMALVEZ EDLYN FREYRA 8 28 60.97 120 BESMONTE RONILO ARAOJO 9 2 64.55 121 ORION ELIZABETH CASTILLON 9 4 57.38 122 MORALES EMELYN BEDIONES 9 5 57.38 123 ARIAR ARLEN BALUTAN 9 6 57.38 124 MORALES ELISA BEDIONES 9 7 57.38 125 FRAGATA RODEL REVILLA 9 8 57.38 126 DE CHAVEZ DYNA ANCHETA 9 9 57.38 127 NIEVA HELEN PADILLA 9 10 57.38 128 PERLAS NICOMEDES CRISPO 9 11 57.38 129 BELARMINO ANGELIE PADILLA 9 12 57.38 130 OLIMPO NENITA CABILING 9 14 57.38 131 CORREGIDOR GLADYS CARILLA 9 15 57.38 132 VILLAESTER VIVIAN BELBES 9 16 57.38 133 DIPLOMO MARICEL ACHENA 9 18 57.38 134 RAYELA LUZ BALDEO 9 20 57.38 135 CAPUNO MARIFLOR AGUSTIN 9 22 57.38 136 CADIENTE MARIVIC AGUSTIN 9 24 57.38 137 PELAEZ REMEDIOS PANTOJA 10 1 62.76 138 CLEOFAS MARVIN ROSAL 10 2 64.55 139 HERMINIGILDO MATEO LAPURGA 10 3 57.38 140 CLEOFAS JR. ROMEO ROSAL 10 4 57.38 141 BARSAGA ROSAN RAMOS 10 6 57.38 142 CLEOFAS JOEL ROSAL 10 8 57.38 143 CENAL ELVIRA OCAMPO 10 14 57.38 144 TABIL MARYCAR CARA 10 16 57.38 145 ROMERO ALEXANDER P. 10 19 57.38 146 PANGULONG RHOANA B. 10 21 57.38 147 PAGULONG MYLENE RONQUILLO 10 22 57.38 148 PAGULONG JOMEL RONQUILLO 10 23 57.38 149 PAGULONG IAN RONQUILLO 10 24 57.38 150 TAZON JEFFREY DIAZ 10 25 68.14 151 TAZON JERRY DENAVERDE 10 26 68.14 152 MAYORES FELY DE VELLINA 10 27 68.14 153 BORROMEO CYRIL POLSOTIN 11 3 57.38 154 TIONGZON ANDRES SEVILLE 11 4 57.38 155 POLSOTIN ELIZABETH BARIA 11 7 57.38 156 TIMOLA LENY NARCA 11 8 57.38 157 TIMOLA LINA NARCA 11 9 57.38 158 GEOCA ANDREW L. 11 10 57.38 159 SUELO PETER RIVA 11 11 57.38 160 TIZON MARILYN ALIHIO 11 12 57.38 161 TAGAMA RODORA ESPOSO 11 13 57.38 162 GOJAS ROSE-ANN TAGAMA 11 14 57.38 163 OBANDO RODEL MALAKAS 11 15 57.38 164 COPINO MARISSA SALVADORA 11 16 57.38 165 PAGULONG LOUIE RONQUILLO 11 18 57.38 166 GUALBERTO JESS MAR DACUT 11 19 57.38 167 GUALBERTO LOVELY MELODY DACUT 11 20 57.38 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.