Conveyance of Real Property Not in Connection With Sale Not Taxable

May 4, 1993 BIR RULING NO. 182-93 CONVEYANCE OF REAL PROPERTY NOT IN CONNECTION WITH SALE NOT TAXABLE 196 052-91 182-93 State Investment House, Inc. 4th Floor, State Center Building 333 Juan Luna Street Binondo, Manila Attention: Mr . Armando T . Sam President This refers to your letter dated February 8, 1993, requesting for exemption from the payment of documentary stamp tax on the Deed of Conveyance you executed with State Financing Center Condominium Corporation (SFCCC) on December 17, 1992, relative to the transfer of ownership of your realty, known as State Financing Center Building, situated at Ortigas Avenue, Greenhills, Mandaluyong, Metro Manila, covered by TCT No. 13254, in favor of State Financing Center Condominium Corporation, in compliance with the provisions of the Condominium Act. aisadc It is represented that you are the owner/developer of a condominium project consisting of a ten (10) storey building constructed on a parcel of land located at Ortigas Avenue, Greenhills, Mandaluyong, Metro Manila, covered by TCT No. 132543; that the said project was developed and completed in accordance with the requirements of the Condominium Act; that at present, about 80% of the condominium units have already been sold to unit owners, and for the past ten years, the maintenance, administration and management of the project has been turned over to SFCCC; that on this basis and in compliance with the provisions of the Condominium Act, you assigned and obeyed all rights, interests, participations and claims over title including the common areas of the said condominium project in favor of SFCCC which accepted the same; and that from the nature of the above conveyance, you are of the opinion that since the transfer of the property was not in connection a sale as there was no consideration involved, said conveyance is not subject to documentary stamp tax. In reply, please be informed that conveyance of realty not in connection with a sale, to trustees or other persons without consideration are not taxable (Sec. 195, Revenue Regulations No. 26, otherwise known as the Revised Documentary Stamp Tax Regulation). In the instant case, the Deed of Conveyance in question is without consideration as the conveyance is not in connection with a sale made to the condominium corporation. In fact, the sale by you of the condominium unit were made in favor of the individual unit owners of the condominium project; and the purpose of the conveyance to the condominium corporation is for the management of the project for the common benefit of the unit owners (Section 10, R.A. No. 4726, Condominium Act.) Accordingly, the aforesaid Deed of Conveyance is not subject to the documentary stamp tax imposed by Section 196 of the Tax code, as amended. However, the acknowledgment is subject to the documentary stamp tax on certification in the amount of P3.00, pursuant to Section 188 of the Tax Code, as amended. VICTOR A. DEOFERIO, JR. Deputy Commissioner of Internal Revenue