Conveyance of Property for Socialized Housing Exempt from Capital Gains Tax

June 24, 1993 BIR RULING NO. 272-93 CONVEYANCE OF PROPERTY FOR SOCIALIZED HOUSING EXEMPT FROM CAPITAL GAINS TAX 21 (e) 28-93 272-93 National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Mr . Epifanio P . Recana OIC, Legal Department This refers to your letter dated April 26, 1993 requesting in effect, a confirmation of your opinion that the conveyance of property by private individuals in your favor to be used in your Socialized Housing Projects is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992. cdtech Records disclosed that a property (raw land) located at Bo. Maypajo, Caloocan City with an area of 18,758 square meters, covered by Transfer Certificate of Title No. 39857 issued by the Registry of Deeds of Caloocan City, and owned by Amado Maclan, et al., is the subject of the Resolution by the Supreme Court in G.R. No. 96856, National Housing Authority vs. The Court of Appeals, et al., dated March 25, 1993 approving the Compromise Agreement between the NHA and the landowners (Maclans), whereby the latter conveyed to the former the aforesaid property which it took possession of, utilized and developed as component part of its Dagat-Dagatan Development Project, a low-cost housing project for the benefit of marginal income families, by virtue of a "Writ of Possession" issued by the Regional Trial Court dated November 24, 1975, hence this request. In reply, please be informed that pursuant to Sections 19 and 20 of R.A. No. 7279, pertinent portions of which read: "Sec. 19. Incentives for the National Housing Authority. The National Housing Authority, being the primary government agency in charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of transfer certificates of title. (Emphasis supplied) "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater private 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: (1) Project-related income taxes; (2) Capital gains tax on raw lands used for the project; xxx xxx xxx the conveyance of the aforesaid property covered by Transfer Certificate of Title No. 39857 in the names of Amado Maclan, et. al., in favor of the National Housing Authority by virtue of the aforesaid Supreme Court Resolution dated March 25, 1993 supra is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. 7279. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue