Sale of House & Lot below P500, 000 Subj. to Verification Before Grant of 0% CWT

July 5, 1993 BIR RULING NO. 282-93 SALE OF HOUSE & LOT BELOW P500,000 SUBJ. TO VERIFICATION BEFORE GRANT OF 0% CWT 50 (b) 282-93 R.P. Teoseco Realty Corp. Suite 214, Bank of PI Bldg. Aurora Blvd., Cubao Quezon City Attention: Mr . Ramon P . Tioseco This refers to your letters dated March 4 and 6, 1993 stating that the Assistant Revenue District Officer of Revenue District No. 35-A, Marikina, Metro Manila, has continued to refuse the registration of the sale by Far East Asia Development Corporation of its realty situated at Far East Asia Village along Marcos Highway, Antipolo, Rizal, in favor of Spouses Reynaldo and Janet Beltran for and in consideration of P495,000.00 on the basis of Q-31 and A-31 of the Primer on Revenue Regulations No. 12-89 and RMC No. 80-89, as amended by Revenue Regulations No. 1-90 and RMC No. 7-90 quoted as follows: "Q-31 To be entitled to exemption (0%) or the 2.5% withholding tax rate, what certificate or documents from HUDCC/HLURB or CREBA should be secured by the Vendor? "A-31 To be entitled to tax exemption (0%) the Vendor must present the following documents from HUDCC/HLURB; a) Development under BP 220; . . ." that on the other hand, Paragraph 2 of Revenue Memorandum Circular No. 16-90 dated February 16, 1990 states viz: "In order to remove the bias against low-cost housing projects registered under P.D. 957, and to simplify tax administration, all sales, exchanges or transfer 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 P500,000.00. 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 . . . ." and that the said property sold is duly registered with the Housing and Land Use Regulatory Board with License to Sell and with CREBA Certification. Based on the foregoing representations you now in effect request for a ruling as to whether or not the aforesaid sale transaction by Far East Asia Development Corporation in favor of the Spouses Reynaldo and Janet Beltran of its realty situated at Far East Asia Village along Marcos Highway, Antipolo Rizal, is subject to the 0% creditable withholding tax pursuant to Revenue Regulations No. 1-90. In reply, please be informed that under Revenue Memorandum Circular No. 16-90 further clarifying some pertinent provisions of Revenue Regulations No. 1-90 as clarified by Revenue Memorandum Circular No. 7-90 implementing Section 50(b) of the Tax Code, as amended, beginning March 1, 1990 to be entitled to the lower withholding tax rates of 0% the presentation of the copies of the Certificate of Registration and License to Sell for a subdivision or condominium project issued by HLURB shall be sufficient proof for the purposes of the required HUDC/HLURB certification in the regulations and that the consideration or selling price does not exceed P500,000. The latter requirement is subject to verification/investigation by the appropriate revenue district office as to whether, considering the rules on valuation of real properties, the selling price does not really exceed P500,000.00. cdtech LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue