Computation of Amount of Documentary Stamps to Be Affixed on Documents for Consolidation of Title to Foreclosed Properties

September 30, 1985 BIR RULING NO. 174-85 34-h 002-85 174-85 Gentlemen : This refers to your letters dated March 26 and April 9, 1985 stating that you are in possession of eight (8) transfer certificates of title of foreclosed properties and to consolidate your title to said properties, you have applied for the issuance of a certificate authorizing registration from the District Officer of Revenue District Office No. 35-A, Marikina, Metro Manila, who required you to pay the documentary stamp tax based on the value appearing in the tax declaration instead of the bid price of the foreclosed properties. Based on the foregoing, you now request information as to the correct basis of computing the amount of documentary stamps to be affixed on the documents to be executed in consolidating your title to the foreclosed properties; and exemption from all taxes, charges and fees of whatever nature as provided for under B.P. Blg. 63. In reply, please be informed that where several parcels of land were unsuccessfully offered for sale at public auction to satisfy the unpaid obligation of the debtor-mortgagor, the mortgaged properties are deemed sold to you at the bid price which is equal to the sum of the mortgage value, interests and bank charges. Since the bid price constituted as the consideration for the conveyance of the property from the debtor-mortgagor to you, it is the amount that should be taken into account in determining the value of the documentary stamp tax to be paid on the document of foreclosure; not the value appearing in the tax declaration (see U.S. Isham, 17 Wall, D96, 84 U.S. 496) Sec. 171 of Regulations No. 26 or the Documentary Stamp Tax Regulations provides: "Sec. 171. Tax on deed executed by sheriff, referee, or commissioner, how computed . The stamp tax on a deed of real property executed by a sheriff, referee, or commissioner to a mortgagee who bids in the property at foreclosure sale to satisfy a mortgage loan, should be computed upon the amount bid for the property plus the costs, if paid by the purchaser." With respect to your claim for exemption from all taxes, please be informed that the tax exemptions/privileges enjoyed by private development banks under Section 10 of Republic Act No. 4093 as amended by B.P. Blg. 63 which had been withdrawn by P.D. 1955 effective October 15, 1984 were restored and allowed to continue until December 31, 1984 only pursuant to Resolution No. 2-84 dated December 21, 1984 of the Fiscal Incentives Review Board (FIRB). Such being the case, your claim for exemption from taxes after December 31, 1984 cannot be granted for lack of legal basis. cdt Very truly yours, (SGD.) RUBEN B. ANCHETA Acting Commissioner