BIR Ruling No. 208-12

March 22, 2012 BIR RULING NO. 208-12 RA No. 7279; BIR Ruling No. 130-10; BIR Ruling No. 040-10 Simon Peter Village Homeowners Association, Inc. Purok Guanzon, Brgy. Mansiligan, Bacolod City Attention: Gidione D. Gale, Jr. Acting President Gentlemen : This refers to your undated letter, requesting tax exemption from the payment of Capital Gains Tax and other taxes in accordance with Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992. It appears that Eng'r Vicente M. Gimena with Tax Identification Number 104-016-646-000 married to Precywinda L. Gimena, is the registered owner of parcels of land covered by two (2) Transfer Certificates of Title, to wit: TCT No. T-238189 Lot 1625-E-2-B-2-I, Psd-06-044130, being a portion of lot 1625-E2-B-2, Psd-06-043329 with an area of ten thousand twenty square meters (10,020 sq. m.), more or less, situated in the Brgy. of Mansilingan, Bacolod City. TCT No. T-319932 Lot 5-A, Psd-06-047815, being a portion of Lot 5, Pcs-06-003173 with an area of ten thousand square meters (10,000 sq. m.), more or less, situated in the Brgy. of Mansilingan, Bacolod City. issued by the Registry of Deeds for Bacolod City. Simon Peter Village Homeowners Association, Inc. with Tax Identification Number 262-111-092-000, on the other hand, is a homeowner's organization registered with the Housing and Land Use Regulatory Board (HLURB). On November 3, 2011, the parties executed a Deed of Sale whereby the owner transfers and conveys the subject properties to Simon Peter Village Homeowners Association, Inc. at an agreed price of Fourteen Million Ninety Eight Thousand Five Hundred Forty Four Pesos and 46/100 (P14,098,544.46). Pursuant to a certification issued by Social Housing Finance Corporation, the subject properties covered by TCT No. T-238189 and T-319932 are actually a CMP Project and shall be proportionately distributed to the association's 186 qualified member-beneficiaries. 1 For this purpose, Simon Peter Village Homeowners Association, Inc. secured a housing loan under the Community Mortgage Program (CMP), a financing assistance program of the Social Housing Finance Corporation (SHFC) a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). TaHDAS In reply, please be informed that pursuant to Sections 20 and 32 of RA No. 7279, pertinent portions of which state that: "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: (d) Exemption from the payment of the following: (2) Capital gains tax on raw lands used for the project; xxx xxx xxx. 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 of the aforestated properties by the owner to Simon Peter Village Homeowners Association, Inc., 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 Certificates of Title of the land to be issued in the name of the Homeowners Association shall be caused to be annotated by the Register of Deeds having jurisdiction over the properties, to the effect that the said properties shall be used for socialized housing pursuant to R.A. No. 7279. (BIR Ruling No. 130-10 dated December 1, 2010) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 of RA 7279. Accordingly, Eng'r Vicente M. Gimena is liable to pay the documentary stamp tax on the document conveying the afore-stated properties imposed under Section 196 of the Tax Code of 1997, based on the consideration contracted to be paid for such realties or their fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 130-10 dated December 1, 2010) 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 titles 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 RMO15-2003. (BIR Ruling No. 040-10 dated August 27, 2010) aEAIDH Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the properties 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. 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 SIMON PETER VILLAGE HOMEOWNERS ASSOCIATION, INC. Purok Guanzon, Brgy. Mansiligan, Bacolod City Name of Beneficiary Blk. No. Lot Total Area No. (sq. m.) 1 Talanquines, Mark F. 1 1 107.6345 2 Beton, Mark Grace 1 2 107.6345 3 Pilaro, Francisco, Jr. M. 1 3 107.6345 4 Necio, Ofelia P. 1 4 107.6345 5 Agabon, Estelita L. 1 5 107.6345 6 Ba-at, Anna Luz 1 6 107.6345 7 Ba-at, Ma. Lourdes 1 7 107.6345 8 Benoman, Wilfredo, Sr. C. 1 8 107.6345 9 Benoman, Wilfredo, Jr. Y. 1 9 107.6345 10 Heradura, Rowell C. 2 1 107.6345 11 Plaza, Ramil H. 2 2 107.6345 12 Arojo, Cecilia 2 3 107.6345 13 Cuevas, Rico H. 2 4 107.6345 14 Piel, Rosalie H. 2 5 107.6345 15 Andaya, Loredel A. 2 6 107.6345 16 Alvarado, Mini S. 2 7 107.6345 17 Ferarris, Elia C. 2 8 107.6345 18 Almieda, Erma C. 2 9 107.6345 19 Ornillo, April Rose S. 2 10 107.6345 20 Cabartes, Cherrylyn C. 2 11 107.6345 21 Nicor, Evangelene C. 2 12 107.6345 22 Maestre, Hermie Z. 2 13 107.6345 23 Fuentespina, Ermelyn 2 14 107.6345 24 Dela Cruz, Marilou G. 3 1 107.6345 25 Dela Cruz, Reymund G. 3 2 107.6345 26 Desuyo, Marcos L. 3 3 107.6345 27 Plaza, Manuel L. 3 4 107.6345 28 Belbar, Lucio B. 3 5 107.6345 29 Mahilum, Myrel A. 3 6 107.6345 30 Esnardo, Marilyn B. 3 7 107.6345 31 Nobles, Peejay M. 3 8 107.6345 32 Entierro, Leo L. 3 9 107.6345 33 Entierro, Ma. Lynne L. 3 10 107.6345 34 Agabon, Jeffrey L. 3 11 107.6345 35 Hisona, Jane E. 3 12 107.6345 36 Estrologo, Edesa F. 4 1 107.6345 37 Estrologo, Manuel, Jr. F. 4 2 107.6345 38 Conjendo, Rocky 4 3 107.6345 39 Acuyong, Reggie D. 4 4 107.6345 40 Esparas, Mariano S. 4 5 107.6345 41 Ayeng, FC 4 6 107.6345 42 Senosa, Ma. Fe 5 1 107.6345 43 Arcea, Rolando 5 2 107.6345 44 Bantolinao, Nenette 5 3 107.6345 45 Arceo, Maricel M. 5 4 107.6345 46 Bat-og, Teresita P. 5 5 107.6345 47 Bat-og, Grace Marie P. 5 6 107.6345 48 Aliboga, Rosalina A. 6 1 107.6345 49 Gregorio, Fely E. 6 2 107.6345 50 Balayo, Ma. Luisa 6 3 107.6345 51 Gustillo, Rhona 6 4 107.6345 52 Casuela, Emy Rose D. 6 5 107.6345 53 Buen, Teody S. 6 6 107.6345 54 Cuevas, Vergil S. 6 7 107.6345 55 Salvacion, Emily S. 6 8 107.6345 56 Gallego, Grace 6 9 107.6345 57 Gale, Gidione, Jr. D. 6 10 107.6345 58 Jabagat, July V. 6 11 107.6345 59 Jabagat, Lorna V. 6 12 107.6345 60 Magsico, Linalie 7 1 107.6345 61 Sim, Rogelio 7 2 107.6345 62 Torrecarion, Joan T. 7 3 107.6345 63 Labaton, George A. 7 4 107.6345 64 Ba-al, Melinda C. 7 5 107.6345 65 Vibar, Joel B. 7 6 107.6345 66 Mangubat, Juna S. 7 7 107.6345 67 Tuballes, Ramil R. 7 8 107.6345 68 Belonio, Mary Crislyn G. 7 9 107.6345 69 Anong, Mae Ching R. 7 10 107.6345 70 Anonat, Kerr Leigh R. 7 11 107.6345 71 Anonat, Rhizah Mae R. 7 12 107.6345 72 Anonat, Roy Ronil R. 7 13 107.6345 73 Anonat, Erci Grace R. 7 14 107.6345 74 Anonat, Mel John R. 7 15 107.6345 75 Anonat, Joane Ervec R. 7 16 107.6345 76 Aballa, Janette R. 8 1 107.6345 77 Aballa, John Michael 8 2 107.6345 78 Disabelle, Noel Carlo V. 8 3 107.6345 79 Asillo, Ariel E. 8 4 107.6345 80 Pal, Alberto T. 8 5 107.6345 81 Tagle, Ofelia 8 6 107.6345 82 Espillo, Editha G. 8 7 107.6345 83 Barsabal, Arvin 8 8 107.6345 84 Espigar, Emilyn S. 8 9 107.6345 85 Quesio, Ernie S. 8 10 107.6345 86 Mambatac, Marianne R. 8 11 107.6345 87 Absalon, Lorabel E. 8 12 107.6345 88 Suansing, Danilo 8 13 107.6345 89 Absalon, Lobel E. 8 14 107.6345 90 Gonzales, Joanne D. 8 15 107.6345 91 Mascuana, Mary Ann M. 8 16 107.6345 92 Tagle, Rizalina 8 17 107.6345 93 Castillo, Emmanuel D. 8 18 107.6345 94 Anog, Joel 9 1 107.6345 95 Guanzon, Sandy C. 9 2 107.6345 96 Alipo-on, Fercey 9 3 107.6345 97 Guanzon, Tracy Jane D. 9 4 107.6345 98 Tirol, Fritz J. 9 5 107.6345 99 Jereza, Helen I. 9 6 107.6345 100 Lumawag, May Ailene 9 7 107.6345 101 Bersales, Ernesto, Jr. 9 8 107.6345 102 Logrunio, Julio S. 9 9 107.6345 103 Logrunio, Mavis Jun B. 9 10 107.6345 104 Mario, Mary Ann J. 9 11 107.6345 105 Estrabon, Mardy 9 12 107.6345 106 Tongol, Mae Ann S. 9 13 107.6345 107 Son, Haydee C. 9 14 107.6345 108 Agriam, Carmela P. 9 15 107.6345 109 Macanan, Mary Joy P. 9 16 107.6345 110 Fuentespina, Ederson O. 9 17 107.6345 111 Fuentespina, Ederwin O. 9 18 107.6345 112 Bascos, Eduardo T. 10 1 107.6345 113 Antay, Nomer A. 10 2 107.6345 114 Felasor, Emil 10 3 107.6345 115 Despi, Raymond T. 10 4 107.6345 116 Jumawan, Jerry 10 5 107.6345 117 Jabagat, Jeffrey 10 6 107.6345 118 Jabagat, Ge-Ar 10 7 107.6345 119 Soberano, Ma. Luisa 10 8 107.6345 120 Gervacio, Jenny G. 10 9 107.6345 121 Tabucon, Elmer G. 10 10 107.6345 122 Gayares, Isaias, Jr. L. 10 11 107.6345 123 Montederamos, Rowena 10 12 107.6345 124 Dela Torre, Nelson 11 1 107.6345 125 Visera, Lucia 11 2 107.6345 126 Malalay, Aracelie 11 3 107.6345 127 Alvarez, Shiela 11 4 107.6345 128 Aguilos, Rustico 11 5 107.6345 129 Tubongbanua, Arthur 11 6 107.6345 130 Bana-ag, Johnny 11 7 107.6345 131 Dorado, Ma. Teresa D. 11 8 107.6345 132 Semillano, Giovanni 11 9 107.6345 133 Despi, April T. 11 10 107.6345 134 Dionson, Wilson T. 11 11 107.6345 135 Francisco, Jollive L. 11 12 107.6345 136 Lachica, Lodeline C. 12 1 107.6345 137 Lachica, Shiela Mae C. 12 2 107.6345 138 Rasonable, Roxsan N. 12 3 107.6345 139 Dante, Joemarie 12 4 107.6345 140 Salamisan, Sarah Jean 12 5 107.6345 141 Aducal, Olivia 12 6 107.6345 142 Plaza, Pamela 12 7 107.6345 143 Plaza, Rainer Raul 12 8 107.6345 144 Salva, May Geraldine 12 9 107.6345 145 Salva, Rufino Edwin 12 10 107.6345 146 Planilla, Sharon Mae 12 11 107.6345 147 Lanutan, Jenelyn T. 12 12 107.6345 148 Carmen, Belly P. 12 13 107.6345 149 Pansoy, Salvacion 12 14 107.6345 150 Gonzaga, Bebelita 12 15 107.6345 151 Candari, Sam Gerard 12 16 107.6345 152 Flores, Richlie 12 17 107.6345 153 Candari, Cecilia T. 12 18 107.6345 154 Batinda-an, Amelia H. 13 1 107.6345 155 Batinda-an, Annaliza H. 13 2 107.6345 156 Tanes, Nashville 13 3 107.6345 157 Gabinera, Randy 13 4 107.6345 158 Flor, Rolly D. 14 1 107.6345 159 Arto, Ramir Tauson 14 2 107.6345 160 Buen, Jemela 14 3 107.6345 161 Moreno, Elisa 14 4 107.6345 162 Santiago, Dennis Aaron S. 14 5 107.6345 163 Canete, Rhodora R. 14 6 107.6345 164 Orada, Nanette 15 1 107.6345 165 Orada, Olivia 15 2 107.6345 166 Ninolia, Jane 15 3 107.6345 167 Gefulle, Yulafe M. 15 4 107.6345 168 Plotea, Fringes N. 15 5 107.6345 169 Florido, Lerio U. 15 6 107.6345 170 Gregorio, Rodrigo 15 7 107.6345 171 Salvacion, Rubin 15 8 107.6345 172 Rosana, Aileen 15 9 107.6345 173 Caracena, Jacinto 15 10 107.6345 174 Rubin, Aiza Pearl G. 15 11 107.6345 175 Gemoto, John Paul S. 15 12 107.6345 176 Tanes, Editha A. 16 1 107.6345 177 Betita, Omar B. 16 2 107.6345 178 Maquiran, Norma C. 16 3 107.6345 179 Maquiran, Omar Jibraeel C. 16 4 107.6345 180 Isidto, Collin Derk Y. 16 5 107.6345 181 Isidto, Dionisio Y. 16 6 107.6345 182 Villar, Sharon G. 16 7 107.6345 183 Dela Cruz, Camille Sylany G. 16 8 107.6345 184 Nemenzo, Visantly 16 9 107.6345 185 Nemenzo, Cresilda A. 16 10 107.6345 186 Ella, Jennifer A. 16 11 107.6345 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.