BIR Ruling No. 167-15

June 5, 2015 BIR RULING NO. 167-15 RA No. 7279; BIR Ruling No. 294-14; BIR Ruling No. 283-14 Tinig Buklod Para sa Bahay Pangarap ng Sitio Sitio Bukid, Brgy. Riverside, San Pedro, Laguna Attention: Ms. Rose C. Pepito President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated September 30, 2014, endorsing the sale transaction between Viewer's Palace Development Corporation and Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III 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". ETHIDa Documents submitted disclose that Viewer's Palace Development Corporation , (TIN 000-641-930-000) is the registered owner of a parcel of land covered by Transfer Certificate of Title (TCT), to wit: TCT No. Area (sq.m.) Tax Declaration No. T-204264 20,202 24-0013-00188 issued by the Registry of Deeds for Calamba, Laguna. The aforesaid property is situated at Brgy. Riverside, San Pedro, Laguna. Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III (TIN 415-953-000-000), on the other hand, is a homeowners' organization registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. 14896. On July 28, 2014, the parties executed a Deed of Absolute Sale whereby the owner transferred and conveyed Five Thousand Five Hundred Twenty square meters (5,520 sq.m.) portion of the subject property to Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III at a total agreed price of Seven Million Three Hundred Eighty Two Thousand One Hundred Sixteen Pesos & 80/100 (Php7,382,116.80), Philippine Currency. Pursuant to a Certification issued by SHFC, Five Thousand Five Hundred Twenty square meters (5,520 sq.m.) out of the Twenty Thousand Two Hundred Two square meters (20,202 sq.m.) covered by TCT No. T-204264 actually comprise a CMP Project and shall be proportionately distributed to the association's one hundred thirty six (136) qualified member-beneficiaries (Annex A). For this purpose, Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III 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, Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III 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 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 Association; and cSEDTC 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 landowner who sold its property for use in a socialized housing project is exempt from the payment of capital gains tax. Such being the case, the sale by the landowner to Tinig Buklod Para sa Pangarap ng Sitio Bukid Homeowners Association, Inc. Phase III , in so far as the Five Thousand Five Hundred Twenty square meters (5,520 sq.m.) portion of the property covered by TCT No. T-204264 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. SDAaTC 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 Tinig Buklod Para sa Bahay Pangarap ng Sitio Bukid 'Association, Inc. Phase III Sitio Bukid, Brgy. Riverside, San Pedro, Laguna Master list of Beneficiaries Block Lot Total Name of Beneficiary No. No. Lot Area 1 Balbuena, Rolando J. 1 1 40.54 2 Balbuena, Marina C. 1 2 40.54 3 Salvaten, Fe E. 1 3 40.54 4 Salvaten, Reagan E. 1 4 40.54 5 Sedol, Elizabeth C. 1 5 40.54 6 Reformina, Rope C. 1 6 40.54 7 Leones, Jobany D. 1 7 40.54 8 Ortega, Jessie M. 1 8 40.54 9 Doncillo, Faulin D. 2 2 40.54 10 Filipinas, Alfonso R. 2 3 40.54 11 Palomo, Julius T. 2 4 40.54 12 Ponciano, Lourdez F. 2 5 40.54 13 Gomez, Erwin S. 2 6 40.54 14 Pineda, Aida G. 2 7 40.54 15 Adalla, Leziel V. 2 8 40.54 16 Faicol, Evy C. 2 9 41.98 17 De Guzman, Jerun F. 2 10 40.54 18 Gavilo, Ruel M. 2 11 40.54 19 Moreno Jr., Pablo R. 2 12 40.54 20 Gutierrez, Rodolfo R. 2 13 40.54 21 Gutierrez, Ryan R. 2 14 40.54 22 Baclea-An, Sylvia S. 3 1 40.54 23 Baclea-An, Fernando S. 3 2 40.54 24 Cordero, Cecilia P. 3 3 40.54 25 Carias, Bernabe S. 3 4 40.54 26 Tumalon, Gregorio L. 3 5 40.54 27 Saborrido, Alejandro G. 3 6 40.54 28 Santiago, Scholastica E. 3 7 40.54 29 Blancaver, Floradel B. 3 8 40.54 30 Buena Elma G. 3 9 40.54 31 Valino, Ma. Victoria C. 3 10 40.54 32 Valencia, Jaime E. 3 11 40.54 33 Valino, Pascual C. 3 12 40.54 34 Esguerra, Alberto, Jr. C. 3 13 40.54 35 Velasco, Alejandro E. 3 14 40.54 36 Perez, Charrence T. 3 15 40.54 37 Gavilo, Ronaldo M. 3 17 40.54 38 Rojas, John Richard W. 3 18 40.54 39 Garciano, Reynante O. 3 19 40.54 40 Heramis, Ma. Lyn A. 3 21 40.54 41 Heramis, Arnold A. 3 22 40.54 42 Celeste, Nestor D. 3 23 40.54 43 Pepito, Rose C. 3 24 40.54 44 Maligsa, Romnick P. 3 25 40.54 45 Esguerra, Lazaro C. 3 26 40.54 46 Labay, Rachel R. 4 1 40.54 47 Guttierez, Ronel R. 4 2 40.54 48 Moreno, Pamvi R. 4 3 40.54 49 Balingit, Benito S. 4 4 40.54 50 Januario, Rowena N. 4 5 40.54 51 Laguna, Leonida V. 4 6 40.54 52 Laroya, Nelsie D. 4 7 40.54 53 Bautista, Myna V. 4 8 40.54 54 Nobleza, Camille G. 4 9 40.54 55 Blanco, Carlos A. 4 10 40.54 56 Bearneza, Crisielyn M. 4 11 40.54 57 Annaliza, Macalino M. 4 12 40.54 58 Gestiada, Julieta M. 4 13 40.54 59 Cambel, Jr., Rodrigo A. 4 14 40.54 60 Lumongsod, Marlyn A. 4 15 40.54 61 Mahinay, Jocrison A. 4 16 40.54 62 Rojo, Sheryl T. 4 17 40.54 63 Rojo, Ma. Erlinda Q. 4 18 40.54 64 Paigan, Marlon C. 4 21 40.54 65 Paigan, Joy C. 4 22 40.54 66 Suazo, Kimberly C. 4 23 40.54 67 Galo, Olimpio D. 5 1 40.54 68 De Jesus Jr., Roman P. 5 2 40.54 69 Mendoza, Chito S. 5 3 40.54 70 De Leon, Ma. Luz E. 5 4 40.54 71 Villanueva, Ma. Sol E. 5 5 40.54 72 Dagsaan, Mark Vincent G. 5 6 40.54 73 Verdadero, Myrna B. 5 7 40.54 74 Florano, Carolina E. 5 8 40.54 75 Saez, Yolanda C. 5 9 40.54 76 Nobleza, Wilfredo S. 5 10 40.54 77 Tan, Alex A. 5 11 40.54 78 Germino, Jose Ryan G. 5 12 40.54 79 Bautista Jr., Hilario A. 5 13 40.54 80 Nobleza, Noli S. 5 14 40.54 81 Villanueva, Jovelyn H. 5 15 40.54 82 Eli, Jeff Raymond F. 5 16 40.54 83 Solomon, Edna P. 5 17 40.54 84 Dela Cruz, Arlene A. 5 18 40.54 85 Pineda, Cirilo D. 5 19 40.54 86 Ruiz, Jasmine B. 5 20 40.54 87 Mallabo, Annabelle G. 5 21 40.54 88 Male, Alexander C. 5 22 40.54 89 Mallabo, Bernardo G. 5 23 40.54 90 Francisco, Glenn D. 5 24 40.54 91 Canales, Rose T. 5 25 40.54 92 Velasco, Marietta R. 5 26 40.54 93 Villanueva, Lucila T. 5 27 40.54 94 Camposagrado, Wilmor V. 5 28 40.54 95 Marcelo, Tiotimo L. 5 29 40.54 96 Diones, Meralyn A. 5 30 40.54 97 Macalino, Marianne M. 5 31 40.54 98 Bartolata, Jose Ralvy M. 5 32 40.54 99 Mondejar, Narciso E. 5 33 40.54 100 Ibarreta, Lorena W. 5 34 40.54 101 Nobleza, Lore Jane W. 5 35 40.54 102 Alcalde, Reynaldo D. 5 36 40.54 103 Panis, Abigail Dlc. 5 37 40.54 104 De Padua, Melchor A. 5 38 40.54 105 Gamad, Allan B. 5 39 40.54 106 De Padua, Reynaldo A. 5 40 40.54 107 Dadobo, Chris S. 5 41 40.54 108 Arellano, Veronica L. 6 2 40.54 109 Desalit, Octavio D. 6 3 40.54 110 Lorico, Nio M. 6 4 40.54 111 Maiwat, Perfecto A. 6 5 40.54 112 Magat, Leonor B. 6 6 40.54 113 Leones, Jessica V. 6 7 40.54 114 Perez, Kyng-Yzaak T. 6 8 40.54 115 Perez, Khim-Annie T. 6 9 40.54 116 De Leon, Gener B. 6 10 40.54 117 Mendoza, Zerina A. 6 11 40.54 118 Nabung, Maurice Albert S. 6 12 40.54 119 Ruiz, Alfredo C. 6 13 40.54 120 Ruiz, Necea B. 6 14 40.54 121 Yaguel, Rachelle Anne R. 6 15 40.54 122 Matan, Rodelio R. 6 16 40.54 123 Matan, Dhelmar D. 6 17 40.54 124 Gimpao Jr., Daniel G. 6 20 40.54 125 Aceron, Phoebe S. 6 21 40.54 126 Ceraos, John Jesus F. 6 22 40.54 127 Ceraos, Nestle F. 6 23 40.54 128 Ceraos, Wilfredo F. 6 24 40.54 129 Atun, Corito M. 6 25 40.54 130 Duapa, Edito B. 6 26 40.54 131 Abelgas, Alexander O. 6 27 40.54 132 Araza, Jaime W. 6 28 40.54 133 Inocencio, Shiela Mae W. 6 29 40.54 134 Paigan, Emelyn C. 6 30 40.54 135 Geraldez, Lenie P. 6 31 40.54 136 Abordo, Armando T. 6 32 46.33 Total 5,520.00 =======