Malig-on Homeowners Association, Inc.

June 3, 2016 BIR RULING NO. 235-16 RA No. 7279; BIR Ruling No. 053-15 Malig-on Homeowners Association, Inc. Quincihan, Brgy. II, Hinigaran, Negros Occidental Attention: Jessie P. Jalbuena President Gentlemen : This refers to the letter of Bartolome G. Agustin Jr. dated June 6, 2015 duly indorsed by Revenue Region No. 12-Bacolod City, requesting for exemption of the sale transaction between Carmencita A. Rodriguez, et al., and Malig-on Homeowners Association, Inc. 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 Carmencita A. Rodriguez (married to Raymundo M. Rodriguez, Nilo G. Agustin (married to Fe Geraldine Tad-y, Ana Victoria A. Santiago (married to Lombardo Santiago) and Bartolome G. Agustin Jr. (married to Lina Castillo) (hereinafter referred to as Landowners) are the registered owners of two (2) parcels of land covered by following Transfer Certificates of Title (TCT): TCT No. Property Identification No. Lot No. Area (sq.m.) T-261642 09000200720 303-B 5,179 T-261643 09000200778 1 14,525 total area 19,704 ===== both issued by the Registry of Deeds for the Province of Negros Occidental. The aforesaid properties are situated at Quincihan, Brgy. II, Hinigaran, Negros Occidental. Malig-on Homeowners Association, Inc. (TIN 404-129-954-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On June 2, 2015, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed Seventeen Thousand Seven Hundred Seventy square meters (17,770 sq.m.) portion of the subject properties to Malig-on Homeowners Association, Inc. at an agreed price of Eleven Million Five Hundred Seven Thousand Twenty Two Pesos and 79/100 (P11,507,022.79). Pursuant to the certification issued by Social Housing Finance Corporation (SHFC), 17,770 sq.m. out of 19,704 sq.m. covered by TCT Nos. T-261642 and T-261643 actually comprises a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. For this purpose, Malig-on Homeowners Association, Inc. 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. CAIHTE In support of its request, Malig-on Homeowners Association, Inc. has completely submitted on July 15, 2015 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC, 17,770 sq.m. portion of the subject properties qualifies and is actually a CMP project; 3) SHFC Letter-Guaranty No. CMP-1077; 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 TCTs and Latest Tax Declarations of the Properties Sold to the Community Association; 8) Certified true copy of the Location Plan of the Lot Sold to the Community Association; 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 landowner who sold its property under CMP for use in a socialized housing project are exempt from the payment of capital gains tax. Such being the case, the sale by the landowner to Malig-on Homeowners Association, Inc. of the 17,770 sq.m. portion of the 19,704 sq.m. covered by TCT Nos. T-261642 and T-261643 are 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. 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 landowners are 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 realties or their fair market values determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 053-15 dated February 27, 2015) 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 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 Malig-on Homeowners Association, Inc. Quincihan, Brgy. II, Hinigaran, Negros Occidental Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 Diana, Arnel G. 1 1 85.58 2 Lumauag, Arlita D. 1 2 99.63 3 Onggo, Ronald A. 1 3 79.19 4 Pasinag Jr., Cenin A. 1 4 90.69 5 Pasinag, Jesryl A. 1 5 71.53 6 Jaudines, Domingo S. 1 6 77.92 7 Jaudines, Raymond G. 1 7 74.08 8 Examen, Helen Grace V. 1 8 91.97 9 Aguilar, Wilfredo T. 1 9 116.24 10 Pargoso, Rosini N. 1 10 90.69 11 Santoyo, Angelo Y. 1 11 98.35 12 Williams, Zarrah T. 1 12 98.35 13 Villanueva, Nonito P. 1 13 95.80 14 Lim, Melendy S. 1 14 113.68 15 Savillo, Judylyn S. 1 15 79.19 16 Servento Jr., Teody R. 1 16 77.92 17 Cayonga, Jeane N. 1 17 80.47 18 Rey, Reman John D. 2 1 75.36 19 Garcia, Fely M. 2 2 63.87 20 Magno, Wilma M. 2 3 63.87 21 Panganiban, Orpha G. 2 4 74.08 22 Diaresco, Rodelo J. 2 5 58.76 23 Cafifge, Joselito S. 2 6 65.14 24 Blanco, Editha C. 2 7 93.24 25 Monsale, Lorena V. 2 9 63.87 26 Monsale, Cyril V. 2 10 39.60 27 Mantiles, Nariza V. 2 11 65.14 28 Eglesia, Joemark P. 2 12 71.53 29 Mongcal, Ester May E. 3 1 121.34 30 Villo, Jippe P. 3 2 98.35 31 Mongcal, Marimie E. 3 3 98.35 32 Mongcal, Eltha May S. 3 4 98.35 33 Mongcal, Joie Mariel E. 3 5 99.63 34 Kumagay, Lorena E. 3 6A 85.58 35 Genteroles, Rex J. 3 6B 70.25 36 Sayson, Aleanor M. 3 7 91.97 37 Depra, Ricardo S. 3 8 84.30 38 Molina, Martin M. 3 9 91.97 39 Edianel, Ronnie S. 3 10 80.47 40 Limaco, Ana Delia E. 3 11 131.56 41 Begasa, Jonavin Mae L. 3 12 91.97 42 Arabejo, Dailyn E. 3 13 91.97 43 Nombres, Rommel T. 3 14 91.97 44 Nombres, Jollward T. 3 15 103.46 45 Moleta, Roger C. 4 1 80.47 46 Morancil, Irene T. 4 2 122.62 47 Barino, Dennis A. 5 1 58.76 48 Billones, Ramonito T. 5 2 113.68 49 Necor, Ryan Jul B. 5 3 63.87 50 Lagon, Steve P. 5 4 67.70 51 Billones, Miriam M. 5 5 34.49 52 Genosa, Eric G. 5 7 26.82 53 Ortiga, Vincent Ryan E. 5 9 42.15 54 Mayabason, Oliver F. 5 10 40.87 55 Ortiga, Jerryme L. 5 11 40.87 56 Saldevia, Ritchie T. 5 12 40.87 57 Prado, Theresa P. 5 13 40.87 58 Dequia, Almyr Caezar V. 1 1 113.68 59 Deanon, Gloria S. 1 2 104.74 60 Sellado, Nathalie V. 1 3 77.92 61 Andrade, Jerose R. 1 4 77.92 62 Tingson, Rocelyn S. 1 5 127.73 63 Soliminio, Ruel S. 2 1 65.14 64 Gayoba, Ma. Lilia S. 2 2 90.69 65 Sellado, Azur V. 2 3 94.52 66 Jabile, Vincent A. 2 4 93.24 67 Montua, Lerio S. 2 5 88.13 68 Mongyan, Ritchel S. 2 6 98.35 69 Marpa, Abner S. 2 7 71.53 70 Gonzaga, Reynald B. 2 8 58.76 71 Tano, Emelie B. 2 9 86.86 72 Dela Cruz, Edmund R. 2 10 86.86 73 Campo, Christina D. 2 11 83.03 74 Omero, Mark John D. 2 12 72.81 75 Marual, Ma. Johnna D. 2 13 84.30 76 Diaresco, Janrey Y. 3 1 71.53 77 Saldua, Mary Jane L. 3 2 100.91 78 Leonora, Noel V. 3 3 47.26 79 Leonora, Ana D. 3 4 90.69 80 Marual, Jerric D. 3 5 199.26 81 Medalla, Rona L. 3 6 150.72 82 Leonora, Abner V. 3 7 143.06 83 Medalla, Rea L. 3 8 68.97 84 Soliminio, Jimmy N. 3 9 83.03 85 Acosta, Romeo G. 3 10 144.34 86 Trasga, Malie A. 3 11 53.65 87 Estrellanes, Mae A. 3 12 57.48 88 Acosta, Roland G. 3 13 63.87 89 Hanaya, Aurora G. 5 2 143.06 90 Genosa Jr., Carlito V. 7 1 173.71 91 Genosa, Nilo V. 7 2 177.55 92 Genosa, Richard V. 7 4 137.95 93 Genodifa, Aymer J. 7 7 120.07 94 Examen, Elbert V. 7 8 116.24 95 Rodrigo, Arlyn G. 7 9 135.40 96 Genodifa, Rabina M. 7 10 83.03 97 Tupas, Rosa Mia G. 7 11 68.97 98 Gilbore, Lourdes B. 7 12 123.90 99 Gilbore, Snooky P. 7 13 107.29 100 Genosa, Erna G. 7 14 61.31 101 Genosa, Anamae T. 7 15 53.65 102 Genosa, Soledad G. 7 16 81.75 103 Jalbuena, Jessie P. 8 1 106.02 104 Magquilat, Nanette D. 8 2 121.34 105 Rey, Mark Anthony M. 8 3 129.01 106 Bajador, Archie M. 8 4 93.24 107 Hirata, Clarines B. 8 5 77.92 108 Bajador, Cherilyn M. 8 6 81.75 109 Bajador, Cris Vergel M. 8 7 77.92 110 Arevalo, Angie M. 8 8 108.57 111 Espaola, Evangeline V. 8 9 109.85 112 Servento, Merlina R. 8 10 159.66 113 Guance, Herbert C. 8 11 48.54 114 Servento, Rico A. 8 12 116.24 115 Azucena, Leonardo T. 8 13 49.82 116 Talabon, Soledad Diasy D. 8 14 103.46 117 Genodifa, Archie J. 8 15 150.72 118 Abada, Eurika A. 8 16 61.31 119 Genodifa, Aileen J. 8 17 90.69 120 Vidal, Roli John S. 8 18 62.59 121 Vidal, Olivia S. 8 19A 118.79 122 Vidal, Jeremy S. 8 19B 114.96 123 Vidal, Stiffany June S. 8 20 74.08 124 Muyco, Deltha M. 9 1 47.26 125 Blanco, Fernando I. 9 2 52.37 126 Guillermo, Gina N. 9 3 48.54 127 Canieso, Matthew M. 9 5 62.59 128 Orbillo, Michelle Joy E. 9 6 67.70 129 Tongcua, Tricia May M. 10 1 79.19 130 Jimenez, Jerry D. 10 2 97.08 131 Tongcua, Ma. Loven M. 10 3 79.19 132 Tortosa, Anita M. 10 4 93.24 133 Nonato, Fernando P. 10 5A 51.09 134 Vargas, Villa P. 10 5B 60.03 135 Espaola, Erly E. 10 6 72.81 136 Vargas, Jevy E. 10 7 68.97 137 Abais, Ritchely J. 10 8 108.57 138 Cezar, Ramela G. 10 9 68.97 139 Espaola, Ariel E. 10 10 88.13 140 Duazo, Nenita G. 10 11 100.91 141 Gasapo, Christopher G. 11 1 173.71 142 Ignal Jr., Elizard D. 11 2 75.36 143 Gayoso, Rene I. 11 3 63.87 144 Gayoso, Reynante I. 11 4 80.47 145 Pacheco Jr., Pompeo L. 11 5 109.85 146 Pelayo, Antonio A. 11 6 109.85 147 Gayoso Jr., Rodrigo I. 11 7 108.57 148 Diana, Armando G. 11 8 99.63 149 De Guia, Aldrin B. 11 9 90.69 150 Tangue, Melanie I. 12 1 114.96 151 Vasquez, Teresita P. 12 2 129.01 152 Gayona, Felix N. 12 3 116.24 153 Samillano, Josela M. 12 4 125.18 154 Masuela, April Joy G. 12 5 116.24 155 Cosas, Mary Gie M. 12 6 97.08 156 Morales, Salvacion A. 12 7 171.16 157 Torremucha, Mangie C. 12 8 103.46 158 Abilo, Criselda G. 12 9 168.61 159 Monsale, Catherine M. 12 10 94.52 160 Monsale, Jaypee M. 12 11 157.11 161 Garde, Cristobal N. 12 12 90.69 162 Espaola, Jeffrey E. 12 13 137.95 163 Aguilar, Joerex S. 12 14 116.24 164 Gayorgor, Marlon B. 12 15 122.62 165 Maalihan, Hermielie N. 12 16 154.56 166 Gebora, Joan B. 12 17 100.91 167 Espada, Ronnie D. 12 18 205.65 168 Depra, Eric S. 12 19 90.69 169 Fronda, Jennelyn B. 12 20 84.30 170 Cabulacan, Menchie M. 13 1 89.41 171 Ticao, Roselyn C. 13 2 89.41 172 De Guia, Redante B. 13 3 89.41 173 Aloba, Jestoni L. 13 4 89.41 174 Yu, Ma. Dolores S. 13 5 89.41 173 Perez, Elisa S. 13 6 89.41 176 Lalino, Jonah D. 13 7 97.08 177 Rasguerdo, Sarra P. 14 1 89.41 178 Genosa, Jory M. 14 2 91.97 179 Sanguillosa, Jimbee J. 14 3 89.41 180 Piad, Josephine S. 14 4 89.41 181 Fortin, Dona S. 14 6 89.41 182 Liboon, Ronnie P. 14 7 89.41 183 Fortin, Ronnie S. 14 8 89.41 184 De Leon, Juliet D. 14 9 89.41 185 Tady, Shaykey P. 14 10 89.41 186 Bitancor, Bobby N. 14 11 89.41 187 Dano-og, Merced M. 14 12 89.41 188 Jullano, Marivic M. 14 13 61.31 189 Jullano, Margie M. 14 14 66.42 190 Sison, Hana J. 15 1 79.19 191 Sison, Jona Fe J. 15 2 79.19 192 Tongcua, Nonette L. 15 3 77.92 193 Onggo, Ronaldo A. 15 4 77.92