BIR Ruling No. 256-13

July 10, 2013 BIR RULING NO. 256-13 RA 7279; BIR Ruling No. 040-2010; BIR Ruling No. 342-2011 National Housing Authority Region XII and ARMM-A 3/F Insular Life Bldg.,Pioneer Avenue General Santos City Attention: Ms. Carmencita D. Pineda Regional Manager Gentlemen : This refers to your letter dated January 5, 2010, as indorsed by the Regional Director of Revenue Region No. 18, Cotabato City on August 24, 2010, requesting for exemption from payment of capital gains taxes on the transfer by Myrna A. Mirabueno or MAM (TIN 136-405-379) of her lot to Dac Ville Homeowners Association, Inc. Phase III (TIN 272-927-465), a legal association of underprivileged and homeless citizens pursuant to Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992. It is represented that MAM is the registered owner of a parcel of land covered by Original Certificate of Title (OCT) No. P-5081 and described as Cadastral Lot No. 746-A, Survey No. CSD-11-007581-D with an area of 37,894 sq.m. located at Barangay Mabuhay, General Santos City. On the other hand, Dac Ville Homeowners Association, Inc. Phase III with Housing and Land Use Regulatory Board (HLURB) Certificate of Registration No. 12-08-02, is a non-stock, non-profit organization duly registered with HLURB Region 12. On December 23, 2009, MAM has agreed to sell her lot to Dac Ville Homeowners Association, Inc. Phase III thru a Deed of Absolute Sale at an amount of P100.00 per sq.m. under the Community Mortgage Program (CMP) of the Social Housing Finance Corporation (SHFC),a subsidiary of the National Home Mortgage Finance Corporation (NHMFC) for an agreed price of P3,323,636.00 and by direct purchase for P465,764.00. SHFC per Amended Certification No. 0485 dated September 7, 2012 states that 33,236.36 sq.m. of the subject property is actually a CMP Project. In support of your request, you have submitted the following documents: SacTCA 1) Written Application for Exemption filed with the Law Division; 2) Certified true copies of the Original Certificate of Title (OCT) and Tax Declaration of the property to be transferred; 3) Certified true copy of the Deed of Absolute Sale executed by and between MAM and Dac Ville Homeowners Association, Inc. Phase III dated December 23, 2009; 4) Certification from the SHFC that the property was acquired through CMP; 5) Certified true copy of the HLURB Certificate of Registration and Articles of Incorporation of the community association; 6) Copy of the Masterlist of qualified beneficiaries duly certified by the NHA; Copies of the TIN Certification of MAM and TIN card of Dac Ville Homeowners Association, Inc. Phase III; 7) Copies of the capital gains tax and documentary stamp tax returns filed with the appropriate RDO; and 8) Other pertinent documents. 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: xxx xxx xxx (d) Exemption from the payment of the following: xxx xxx xxx (2) Capital gains tax on raw lands used for the project; HDTSIE 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 landowner who sold her property for use in a socialized housing project is exempt from the payment of capital gains tax. Such being the case, the sale of the 33,236.36 sq.m. property by MAM to Dac Ville Homeowners Association, Inc. Phase III is exempt from the capital gains tax. However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 of RA 7279. Accordingly, Dac Ville Homeowners Association, Inc. Phase III 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. 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 the 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 No. 040-2010 dated August 27, 2010) Finally, 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 beneficiary association of the socialized housing program shall be caused to 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. 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 sellers are entitled to exemption for capital gains tax or income tax imposed under the Tax Code of 1997. (BIR Ruling No. 342-2011 dated September 8, 2011) EITcaD The Master List of member-beneficiaries, consisting of one-hundred ninety eight (198) qualified individuals, as well as their corresponding lot allocation and area (in sq.m.) occupied by each of them shall form part of this Ruling. 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 Master List of Qualified Beneficiaries of Dac Ville Homeowners Association, Inc. Phase III Lot Allocation No. Name Household Head Blk Lot Total Last Name, FName, Mname No. No. (m2) 1 DEL CORRO, RANDY ABERGONZADO 1 1 160.72 2 RANES, WILFREDO OCIONES 1 2 174.12 3 ANITO, JOEY CANETE 1 3 150.68 4 CATALAN, TOMMY WAGAS 1 4 150.68 5 CAPILLAS, EDDIE ESCALA 1 5 150.68 6 MAGNO, IRENEA SOMBILON 1 6 150.68 7 MAGSIPOC, EDGARDO SUELAS 1 8 150.68 8 BOMBITA, ABELLOUR CAINONG 1 9 150.68 9 PEPITO, WILFREDO TOMAS 1 10 150.68 10 BASAS, AGRIFINA GEROLAGA 1 12 150.68 11 SABELLANO, JOSELITO ALICAWAY 1 13 150.68 12 ALICAWAY SR.,ROEL BAWAAN 1 14 150.68 13 LIBRE, EMMA GENITA 1 15 177.47 14 LIBRE, JEFFRY GENITA 1 16 177.47 15 DADIZON, EVELYN TAN 2 1 177.47 16 PAILONA, EMILIANO JR. FLORES 2 2 177.47 17 LABASTIDA, ROLANDO GABISON 2 4 167.42 18 CATALAN, ALLAN WAGAS 2 5 167.42 19 LABESORES, WILLIAM LOPEZ 2 6 167.42 20 SELGAS, ALMARIE HIGUERA 2 7 167.42 21 CAJEGAS, FLORAME LOPEZ 2 8 167.42 22 VILLAZORDA, LILIAN ZAMORA 2 9 167.42 23 TAN, ALBERTA ANINON 2 10 167.42 24 REVILLA, MARIO ALEGRO 2 11 167.42 25 REVILLA, WILFREDO AREGLO 2 12 167.42 26 RABINO, MADILYN GUINOO 3 3 167.42 27 TIMON, NONILOU HERMOSISIMA 3 4 167.42 28 VELARDE, REDINA DEL CORRO 3 5 169.09 29 FLORES, JOCELYN CULLANO 3 6 167.42 30 GIAN, MARILYN ABAPO 3 8 167.42 31 GURDADOS, LEAH ANINON 3 9 167.42 32 BELDEROL, VISITACION LITERATUS 3 11 167.42 33 VICTORIOSO, JANICE BONJE 3 12 167.42 34 VICTORIOSO, ISMAEL FRANCISCO 3 13 175.79 35 TIBON, NIDA BONJE 3 14 175.79 36 SINGER, JESSIE REYES 4 1 147.33 37 SINGER, CHRISTY REYES 4 2 160.72 38 BACUS, MA. FE REYES 4 3 159.05 39 MARTORILLAS, DEN MARK TAN 4 5 159.05 40 QUINONES, VILMA POLANCOS 4 6 159.05 41 MAYA, CAYETANA ABERGONZADO 4 7 159.05 42 CAREN, JENNIFER FLORES 4 8 159.05 43 ESTAFIA, LUZVIMINDA GUPONG 4 9 159.05 44 OCENAR, CARLITA TARAN 4 10 159.05 45 BAUTISTA, LUCITA POLANCOS 4 11 159.05 46 AUTENTICO, ANALIZA CABARON 4 12 159.05 47 SITOY, ANITA C. 4 14 159.05 48 ANTHONY, ROMEO JR. HUQUERIZA 4 15 177.47 49 BANQUIAO, ZOSIMO BATION 4 16 177.47 50 BANGQUIAO, RUBEN BATION 5 1 165.75 51 ISAAC, ISOVEL VILLANEZA 5 3 167.42 52 SITOY, RENATO CANETE 5 4 167.42 53 CONSOLACION, JOSIT PALMA 5 5 167.42 54 LITERATUS, ELISA PLATITAS 5 6 167.42 55 LITERATUS, NESTLY PLATITAS 5 7 167.42 56 LITERATUS, LEONIZA PLATITAS 5 8 167.42 57 OCTAVIANO, DOVER PABRICANTE 5 9 167.42 58 SALBATONA, MERLINDA PLATITAS 5 10 167.42 59 AMANCIO, RUBEN MAHINAY 5 11 167.42 60 GARINGO, ROSELYN CONSOLACION 5 12 167.42 61 CONSOLACION, JENITA SINGSON 5 13 167.42 62 MAYA, AMIRA AVERGONZADO 5 14 167.42 63 BIHAGAN, NARCISA TAN 5 15 167.42 64 SUMILE, EDDIEBERT PAGARAN 5 16 159.05 65 CINCO, MERCY DONOSO 5 17 159.05 66 CATALAN, MELISA JAVA 5 18 180.81 67 ROMERO, ROSALIO TAMPARONG 6 1 192.53 68 UMANGAY, TIRSO PROVIDENCIA 6 2 194.21 69 BONIEL, JUDALYN WAGAS 6 3 167.42 70 UMANGAY, LORETO PROVIDENCIA 6 4 167.42 71 LITERATUS, EDWIN PALMITOS 6 5 167.42 72 TUYA, EVELYN CAPILLAS 6 6 167.42 73 LUMAYAG, ROGELIO JR. TAN 6 7 167.42 74 LABESEROS, WILSON LOPEZ 6 8 167.42 75 LUMAYAG, NELKIE TAN 6 9 194.21 76 ACHARON, DIRK SR. CLARK 6 10 192.53 77 SUMALJAG, PRUDENCIO PANCIT 7 1 192.53 78 SUMALJAG, ARCHIE PAHAYAHAY 7 2 194.21 79 BITANG, JOCELYN PANDORO 7 3 167.42 80 DEL CORRO, RONALDO ABERGONZA 7 4 167.42 81 CONSOLACION, MELISSA CAITOM 7 5 167.42 82 SUMALINOG, MERLY BOFIL 7 6 167.42 83 TABAR, VIOLETA ABALLE 7 7 167.42 84 ENANORIA, VILLAPANDO JR. BITOON 7 8 167.42 85 ALAGOS, REYNANTE BONTONG 7 10 192.53 86 SENARILLOS, EMILY MONTEJO 8 1 177.47 87 ARROYO, YASMIN DIOT 8 2 177.47 88 TORREGOSA, GEMMA BURINAGA 8 4 167.42 89 MENOZA, ALMA GOFREDO 8 5 167.42 90 ANADIA, OLIVER GABUYA 8 6 167.42 91 MAGBANUA, RAMIEL LORETO 8 7 167.42 92 MAGBANUA, DOLORES LORETO 8 8 167.42 93 LEBOSADA, GERALYN TUYCO 8 9 167.42 94 CALUNOD, EMELINO LABRADOR 8 10 167.42 95 JAPITANA, RICKY PARRENO 8 11 167.42 96 LAPIS, DORISA MAGBANUA 8 12 167.42 97 FORMENTERA, THELMA BARRIENTOS 8 14 175.79 98 CABALLES, LEMIL JUN MOLINA 9 1 177.47 99 LABRADOR, ROSELITO BALUNGCAS 9 2 177.47 100 LIPAT, ISABELITA RELLO 9 3 167.42 101 CHAVEZ, GLADY MAY PELISCO 9 4 167.42 102 CHAVEZ, ROSALIE DAUGDAUG 9 5 167.42 103 TOLOSA, MARGIE CHAVEZ 9 6 167.42 104 BANANG, MARISSA SALIBAY 9 7 167.42 105 SARSABA, ANALYN LABRADOR 9 8 167.42 106 AMBONG, EMILY BANANG 9 9 167.42 107 BITAYO, EMILY ERBING 9 10 167.42 108 CHAVEZ, RENATO DAUGDAUG 9 11 167.42 109 EBO, NELIA ROMERO 9 12 167.42 110 DOMDOM, ERLINDA RICAHUERTA 9 13 175.79 111 BANANG, ROGEL SALIBAY 10 1 157.38 112 MENDOZA, SHERLY QUIMPO 10 2 189.19 113 SINGIT, MYRNA ADLAWAN 10 3 189.19 114 JOROLAN, ARNOLD ADLANAN 10 4 190.86 115 SAMILLANA, RIZALINDA CALUMBA 10 5 190.86 116 BANANG, ROMINA VILLANUEVA 10 6 190.86 117 TAWAN, IMELDA OBISO 10 7 192.53 118 TAYAS, JONATHAN LABASAN 10 8 192.53 119 ZABALA, JOSEPH ALVISO 10 9 194.21 120 ALBIAR, JEANIE RACHO 10 10 194.21 121 FUENTES, SUSAN GABERO 10 11 194.21 122 GELLA, MAXIMO SIBUYAN 10 12 195.88 123 ABANID, MARICHU GELLA 10 13 195.88 124 ZARRAGA, ELEUTERIA MACAPAS 10 14 197.56 125 NERI, EDITHA GELLA 10 15 197.56 126 RILLO, ROMEO LARROZA 10 16 197.56 127 PASIQUA, SOL IAN ESPEDA 10 17 192.53 128 ABAWAN, NIDA FERNANDEZ 11 1 152.35 129 DIONZON, CHARINA TIAGA 11 2 165.75 130 TUMAMAK, GLORIA MORALES 11 3 159.05 131 MONTILLANO, JOBELYN MONICET 11 4 159.05 132 ROSALES, INIRA VALIENTE 11 5 159.05 133 URBINA, GODOFREDO BUSTAMANTE 11 6 159.05 134 SASA, CHARLITA BATIRZAL 11 7 159.05 135 DALIDA, IAN RUTHER LARAYA 11 8 159.05 136 MONTALVO, ERNESTO SILLA 11 9 159.05 137 MONTALVO MARY JEAN SILLA 11 10 159.05 138 TRIUMPA, FEDERICO JR. PATRICIO 11 11 159.05 139 BONGCAYAO, VICENTA ALFORQUE 11 12 159.05 140 LACONSE, SYLVIA PADILLA 11 13 159.05 141 LABRADOR, NIEVES PACURE 11 14 159.05 142 TUBA, GRACE OCTAVIO 11 15 159.05 143 ADLAWAN, ERWIN AMOR 11 16 159.05 144 LINGAT, DONATO LABUGA 11 17 169.09 145 ALBIAR, WARLITO PIELAGO 11 18 169.09 146 BLASE, GUNFREY CASUYON 12 1 174.12 147 WAGAS, EDWIN LIMBRE 12 2 187.51 148 FLORES, FLORENTINO JR. EREDERA 12 3 150.68 149 TINDAHAN, JINKY T. 12 4 150.68 150 LUNA, VICENTA BESINA 12 5 150.68 151 CASTILLO, AMELITO NOYA 12 6 150.68 152 CANETE, KIM PAMPLONA 12 7 150.68 153 VILLARIN, ROBERTO BORRE 12 8 150.68 154 VILLARIN, HENRY BORRE 12 9 150.68 155 VILLARIN, DANTE BORRE 12 10 150.68 156 ADIL, NURHANA MILLADO 12 11 150.68 157 ORCULLO, MERIBEL SELGAS 12 12 150.68 158 ROCETE, RAQUEL ABERGONZADO 12 13 150.68 159 SAPATOS, ROSEMARIE SELGAS 12 14 150.68 160 MANUBAG, RESTY GEE GUMERA 12 15 150.68 161 MANUBAG, RENE GABISON 12 16 150.68 162 MANUBAG, HANSIL GUMERA 12 18 169.09 163 GARCIA, NORMA TELEMPROS 13 2 160.72 164 MANATAD, LANI ARANO 13 3 174.12 165 GARCIA, EUGENE TELEMPROS 13 4 174.12 166 ORAIS, GRACE PURAZO 13 5 174.12 167 TANDINGAN, MARJORIE PINGOY 13 6 174.12 168 BALAOD, ALBERTA BOGTAY 13 7 174.12 169 SITOY, REGINO CANETE 13 8 174.12 170 BARBOSA, WILFREDO SR. LERASAN 13 9 174.12 171 BANQUE, SAMMY MENOZA 13 10 174.12 172 CALUBAG, JANET BENAVIDEZ 13 11 174.12 173 BUENAVIDES, FELIZARDO CENAL 13 13 165.75 174 CASTRO, GUADALUPE PENPENA 13 14 165.75 175 MALABARBAS, ANNIE SUANSING 14 1 154.03 176 LANDAO, ARCHIER SR. GUPONG 14 2 170.77 177 PAPA, MERLYN ALMOCERA 14 3 164.07 178 GRACIA, CHARLIE GUPONG 14 8 164.07 179 ESTAFIA, HAYY GUPONG 14 9 164.07 180 LANDAO, TOMMY GUPONG 14 12 164.07 181 DELA CRUZ, LORETA CANOY 15 1 182.49 182 MANTE, MARGARITA CABIL 15 2 167.42 183 SEVILLENO, LORNA ROSITE 15 3 167.42 184 CALAMBRO, EVANGELINE BALAOD 15 4 167.42 185 DENIOLA, MAE ANN SOL 15 5 167.42 186 TELEMPROS, TERESA ECHEVARRIA 15 6 167.42 187 ALMOCERA, MICHELLE LAYDA 15 7 167.42 188 PADIROG, MERLYN RIM 15 9 167.42 189 EROY, JONATHAN DISCA 15 10 167.42 190 RUNIA, CARLITO SR. BOFILL 15 11 167.42 191 CABIL, EIRLYND GLIM ELIVER 15 12 167.42 192 MARTINEZ, HONEYBEE BANTACULO 15 13 159.05 193 ELIVER, EIRLY DALE RONDINA 15 14 159.05 194 SALVA, EVA BENJAMIN 15 15 159.05 195 MONERA, MARY JEAN ORTEGA 15 16 159.05 196 CASTILLON, LETECIA MORALES 15 17 159.05 197 ALICAWAY, FRANCISCA BAWAAN 15 18 159.05 198 PANAL, EDWIN MERCADAL 15 19 159.05 Grand Total 33,236.36 ========