Residential Housing Below P500, 000 Subject to 0% CWT

June 29, 1993 BIR RULING NO. 280-93 RESIDENTIAL HOUSING BELOW P500,000 SUBJECT TO 0% CWT 50 (b) 200-92 280-93 JEM Properties, Inc. G/F F. Jacinto House 116 Rada Street, Legaspi Village Makati, Metro Manila Attention: Ms . Elizabeth T . Garcia-Pablico General Manager This refers to your letter dated March 25, 1993 requesting for a ruling on whether or not sale of low-cost housing projects registered under P.D. No. 957, provided the selling price does not exceed P500,000.00 should be exempted from the 2.5% expanded withholding tax. cdtech It is represented that you are a real estate developer engaged in the low-cost housing project registered under P.D. No. 957; that you are a CREBA member of good standing; that your project at Accessoria Homes, Bo. Sto. Domingo, Cainta, Rizal was registered pursuant to Section 4 of P.D. 957; that your project is covered by a Certification of Registration from the Housing and Land Use Regulatory Board (HLURB); and that most of your housing units are sold at a price not exceeding P500,000.00 as evidenced by your Contract to Sell or Deed of Sale to your customers, hence, this request. In reply, please be informed that under paragraph Nos. 2 and 3, Revenue Memorandum Circular No. 7-90, as amended by Revenue Memorandum Circular No. 16-90 clarifying some pertinent provisions of Revenue Regulations No. 12-89, as amended by Revenue Regulations No. 1-90 implementing Section 50(b) of the Tax Code, as amended, in order to remove the bias against low-cost housing projects registered under P.D. No. 957 and to simplify tax administration all sales, exchanges or transfers of real property on or after March 1, 1990 shall be subject to zero (0%) percent, regardless of the law under which the project is registered, provided that the consideration does not exceed P500,000. In other words, it is the selling price or consideration (and not the law under which a project was approved) that determines whether or not a transaction is socialized/low cost in nature. Moreover, to be entitled to the lower withholding tax rate of 0% or 2.5%, the presentation of the Certificate of Registration and License to Sell for a subdivision or condominium project issued by the Housing and Land Use Regulatory Board (HLURB) shall be sufficient proof for purposes of the required Housing and Urban Development Coordinating Council (HUDCC)/HLURB Certification in the regulations (Revenue Regulations No. 12-89, as amended by Revenue Regulations No. 1-90). Such being the case, and since your residential subdivision projects at Accessoria Homes located at Bo. Sto. Domingo, Cainta, Rizal are registered with the Housing and Land Use Regulatory Board under Certificate of Registration No. 90-10-1592 and issued with its License to Sell under License to Sell No. 90-10-1596 coupled with the sale thereof at P391,571.00 or less than P500,000 per unit (lot or house and lot), this Office is therefore of the opinion as it hereby holds that your sale of your residential lot or house at Accessoria Homes, Cainta, Rizal that are within the range of P391,571.00 to less than P500,000.00 is subject to the 0% creditable withholding tax imposed under Revenue Regulations No. 1-90 implementing Section 50(b) of the Tax Code. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. cdta LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue