BIR Ruling No. 303-14

July 24, 2014 BIR RULING NO. 303-14 RA No. 7279; BIR Ruling No. 109-13 Tierra Preciosa Homeowners Association, Inc. 013-B Guiwan Highway, Zamboanga City Attention: Raul P. Enomar President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated September 4, 2013, endorsing the sale transaction between Jesus H. Alvarez married to Nancy Dahan and Tierra Preciosa Homeowners Association, Inc. for exemption 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 Jesus H. Alvarez (TIN 177-658-137-000) married to Nancy Dahan is the registered owner of parcels of land covered by two (2) Transfer Certificates of Title (TCT), to wit: TCT No. Area (sq. m.) Tax Declaration No. T-137,240 26,017 1102001601297 T-137,243 12,590 1102001601297 38,607 ====== issued by the Registry of Deeds for Zamboanga City. The aforesaid properties are situated at Pook, Cabaluay, Zamboanga City. Tierra Preciosa Homeowners Association, Inc. (TIN 006-284-948-000), on the other hand, is a homeowner's organization registered with the Housing and Land Use Regulatory Board (HLURB). On July 10, 2013, the parties executed a Deed of Absolute Sale whereby the owner transferred and conveyed, Thirty Six Thousand Five Hundred Ninety Seven and 68/100 square meters (36,597.68 sq.m.) portion of the subject properties to Tierra Preciosa Homeowners Association, Inc. at an agreed price of Twelve Million Eight Hundred Nine Thousand One Hundred Eighty Nine and 6/100 Pesos (P12,809,189.06). Pursuant to a certification dated July 10, 2013 issued by SHFC, Thirty Six Thousand Five Hundred Ninety Seven and 68/100 square meters (36,597.68 sq.m.) out of the total Thirty Eight Thousand Six Hundred Seven square meters (38,607 sq.m.) covered by TCT Nos. T-137,240 and T-137,243 actually comprise a CMP Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Tierra Preciosa Homeowners Association, Inc. secured a housing loan under the CMP, a financing assistance program of the Social Housing Finance Corporation a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). HAcaCS In support of its request, Tierra Preciosa Homeowners Association, Inc. has completely submitted on February 14, 2014 the following documents: 1) SHFC letter application for tax exemption; 2) Certification of the President of the SHFC that the subject property qualifies and is actually a CMP project; 3) Certified true copy of the Letter-Guaranty; 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 TCT and Latest Tax Declaration of the Property 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. ScaEIT 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 landowners who sold their properties for use in a socialized housing project are exempt from the payment of capital gains tax. Such being the case, the sale by the landowners to Tierra Preciosa Homeowners Association, Inc. of Thirty Six Thousand Five Hundred Ninety Seven and 68/100 square meters (36,597.68 sq.m.) portion of the property covered by TCT Nos. T-137,240 and T-137,243 is 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 caused to be annotated by the Register of Deeds having jurisdiction over the property, to the effect that the said properties shall be used for socialized housing pursuant to RA No. 7279. (BIR Ruling No. 109-13 dated March 21, 2013) cHECAS However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 of RA 7279. Accordingly, the owners are liable to pay the documentary stamp tax on the documents conveying the afore-stated properties imposed under Section 196 of the Tax Code of 1997, based on the consideration contracted to be paid for such realties or its fair market value determined in accordance with Section 6 (E) of the said Code, whichever is higher. (BIR Ruling No. 109-13 dated March 21, 2013) 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 RMO15-2003. 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 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 ANNEX TIERRA PRECIOSA HOMEOWNERS ASSOCIATION, INC. 013-B Guiwan Highway, Zamboanga City Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 MANALO, ELSIE V. 1 1 157.09 2 PACIS, JOSE JR. I. 1 2 157.09 3 ARQUIZA, SHARON T. 1 3 157.09 4 PENIANO, JOSIE A. 1 4 172.79 5 BALARO, EDZEL IVAN C. 1 5 172.79 6 SANTANDER, ROEL C. 1 6 172.79 7 MORADO, ROSAURO B. 1 7 172.79 8 BERNALDEZ, RUTH B. 1 8 172.79 9 GUTIERREZ, JOEL M. 1 9 237.20 10 GEMPEROSO, ELIZARDO S. 1 10 172.79 11 JUANITO, RAYMUND DS. 1 11 172.79 12 CARAECLE, JENNIFER G. 1 12 172.79 13 BARBOSA, GINA C. 1 13 172.79 14 FRANCISCO, MA. ESVIC S. 1 14 172.79 15 FELICIANO, ROWENA B. 1 15 172.79 16 BALINTON, GILBERT A. 1 16 172.79 17 AUXTERO, EULA L. 1 17 172.79 18 AUXTERO, PEDRO R. 1 18 172.79 19 JAVIER, CHERIE-ANN R. 1 19 172.79 20 LOGON, SUZETTE C. 1 21 153.94 21 LOGON, ARLGRETCH FERNAN C. 1 22 157.09 22 LUMBAY, MARCELO JR. M. 1 23 157.09 23 LUMBAY, MARY ANN M. 1 24 157.09 24 BERNALDEZ, FLORECEL B. 1 25 157.09 25 BERNALDEZ, TERRYCEL B. 1 26 157.09 26 BOLASITO, REYNALDO L. 1 27 157.09 27 ALCORIZA, MARY JAY T. 1 28 157.09 28 VILLALON, ROQUE L. 1 29 157.09 29 AGGASID, LUZMINDA G. 1 30 157.09 30 LAWAS, MYRNALITA A. 1 31 157.09 31 NURASAN, ARIS E. 1 32 157.09 32 BELLO, CRISELDA M. 1 33 157.09 33 RAMOS, WENDY C. 1 34 309.46 34 CAUTI, YAHAYA JR. G. 1 35 188.50 35 CHIONG, GENEVIEVE O. 1 36 188.50 36 LIM, RAMON JR. M. 1 37 188.50 37 NATIVIDAD, MARIROSE A. 1 38 188.50 38 BISNAR, CLAIRE M. 1 39 188.50 39 MARIANO, CATHERINE D. 1 40 188.50 40 COLIGADO, MARY JANE C. 1 41 188.50 41 ENOMAR, RAUL P. 1 42 212.06 42 JUBAIL, LILITA L. 1 43 157.09 43 MADRIAGA, ECHIGO Q. 1 44 157.09 44 MADRIAGA, DARREL Q. 1 45 157.09 45 MAGBANUA, REYNALDO U. 1 46 157.09 46 MAGBANUA, ROLANDO U. 1 47 157.09 47 DONASCO, BERLITO JR. O. 1 48 157.09 48 DONASCO, DAISY O. 1 49 157.09 49 DONASCO, MARY GRACE O. 1 50 157.09 50 CABERTE, JESUSA G. 1 51 157.09 51 LUTIAN, GIANNI T. 1 52 157.09 52 ADANG, IRENEA S. 1 53 157.09 53 LUTIAN, BENNAZER T. 1 54 153.94 54 MADRIAGA, VIERVEN Q. 1 55 150.80 55 BALUYOT, ANANDA JOSEPH S. 1 56 188.50 56 CUBAR, LEIZEL S. 1 57 188.50 57 RUBIO, ROMMEL V. 1 58 188.50 58 REGODOS, KRISTINE P. 1 59 243.48 59 REGODOS, JULILTO A. 1 60 188.50 60 SORROSA, RUTH H. 1 61 188.50 61 PACTOL, JAYNARD P. 1 62 188.50 62 PACTOL, LEONILA P. 1 63 188.50 63 CARBONEL, MARIANO P. 1 64 188.50 64 DE PERIO, RODOLFO F. 1 65 188.50 65 DE PERIO, CHICKY F. 1 66 229.34 66 BANDICO, GERONIMO A. 2 1 237.20 67 BANDICO, JAYBIE A. 2 2 183.79 68 SIDNEY, JOCELYN A. 2 3 172.79 69 MANALOPILAR, MA. ELENA M. 2 4 172.79 70 AGUIRRE, CECILIO S. 2 5 172.79 71 JATICO, RICARDO M. 2 6 172.79 72 LIZADA, MARISA E. 2 7 172.79 73 LUNJAS, FREDE J. 2 8 172.79 74 BATTAD, ROLANDO V. 2 9 172.79 75 MAQUINTA, EDGAR L. 2 10 172.79 76 CHIONG, OSCAR JR. O. 2 12 169.65 77 SARIGUMBA, JASON P. 3 1 183.79 78 DELICA, ROMMEL P. 3 2 139.81 79 SARIGUMBA, JUPET P. 3 3 172.79 80 SARIGUMBA, MARIFAITH P. 3 4 172.79 81 AGUSTIN, CARLO EULOGIO T. 3 5 172.79 82 RABADON, ARLENE J. 3 6 172.79 83 RAMIREZ, MARIFE S. 3 7 172.79 84 CORONEL, BRENDA R. 3 8 172.79 85 ISAAC, CIARA M. 3 9 169.65 86 RABADON, BENILDA J. 3 10 169.65 87 LUMBRE, ROMEO A. 4 1 218.35 88 GRACIANO, ROBELYN A. 4 2 175.94 89 CASCARA, RODOLFO L. 4 3 172.79 90 MORALES, BELINDA G. 4 4 172.79 91 SANLAO, RENILO R. 4 5 172.79 92 SANLAO, ALICE R. 4 6 172.79 93 REYES, LUCYBELT H. 4 7 169.65 94 REGACHO, ALVIN M. 4 8 169.65 95 PACTOL, RODELYN P. 5 1 237.20 96 TABALOC, DAHN NINO D. 5 2 205.78 97 GONZALES, LORENZO C. 5 3 204.21 98 CASTILLO, BETHUEL B. 5 4 204.21 99 DEQUE, ELMER D. 5 5 201.07 100 SALVADOR, RICKY V. 5 6 201.07 101 YUNSAY, MERCEDITA L. 6 1 248.19 102 EUSTAQUIO, ARTURO III B. 6 2 230.92 103 BARCIAL, ROMEO P. 6 3 212.06 104 CUTIN, PABLO JR. S. 6 4 212.06 105 LUMBAY, MATHEW M. 6 5 202.64 106 MALBAN, PILAR P. 6 6 202.64 107 DELA CRUZ, JARWIN N. 7 1 213.64 108 AVISO, TITO T. 7 2 216.78 109 PERIALDE, RELYN D. 7 3 204.21 110 JOSE, JULIUS RHETT B. 7 4 204.21 111 ANGELES, EDWIN M. 7 5 201.07 112 GUZMAN, SALOME J. 7 6 201.07 113 ATILANO, ROSABEL B. 8 1 221.49 114 DANDOY, RUFINO B. 8 2 256.05 115 ENRIQUEZ, DANTE S. 8 3 204.21 116 ROMERO, LEONARFINA C. 8 4 204.21 117 DOLOTINA, ORENCIO R. 8 5 201.07 118 AJIMUDDIN, ROSALIE M. 8 6 201.07 119 CAJES, LEONELIE B. 9 1 177.51 120 PATRICIO, NIDA F. 9 2 226.20 121 CAJES, MARY ANN B. 9 3 188.50 122 VERBA, GEREDYL B. 9 4 188.50 123 TABALOC, DANNIFA JANE D. 9 5 188.50 124 DE REAL, FRANCIS M. 9 6 188.50 125 VILLAS, YANESSA G. 9 7 185.36 126 DE REAL, FLORENCIO JR. M. 9 8 185.36 127 PEAFLOR, PILARDO E. 11 1 164.94 128 CUBAR, LILIBETH H. 11 2 215.21 129 EVANGELISTA, JULIET D. 11 3 204.21 130 CAYAON, SHERDALYN T. 11 4 204.21 131 LUCMAN, SHIELA MAE E. 11 5 204.21 132 ESCOZAR, ARTURO L. 11 6 204.21 133 DULAY, ANALIZA M. 11 7 204.21 134 LEGARA, ARLEEN S. 11 8 204.21 135 MAPILI, ALFREDO JR. C. 11 9 204.21 136 CABRAL, EDWIN M. 11 10 204.21 137 COVARRUBIAS, BENJAMIN F. 11 11 179.08 138 ESCOBAR, MELANIE C. 11 12 166.51 139 RABUYA, NESTOR C. 12 1 185.36 140 RABUYA, CEFERINO C. 12 2 183.79 141 ROSALES, IGNACIO Y. 12 3 188.50 142 FUENTES, IMELDA O. 12 4 188.50 143 GABUNALES, PROCULO G. 12 5 188.50 144 FUENTES, MARITES O. 12 6 188.50 145 TINAMBACAN, ROMULO R. 12 7 188.50 146 FUENTES, RODERICK O. 12 8 188.50 147 ALVAREZ, ILUMINADA R. 12 9 188.50 148 ALIM, ALFREDO G. 12 10 188.50 149 GONZALES, MA. TERESA C. 12 11 221.49 150 SALVO, ATHENA B. 12 12 215.21 151 MACROHON, JOYVEE B. 13 1 185.36 152 MACROHON, NOEL B. 13 2 185.36 153 MACROHON, ROSILITO B. 13 3 188.50 154 MACROHON, LUSEL B. 13 4 188.50 155 ESPARAGUERA, ILLA A. 13 5 188.50 156 MACROHON, LUDELYN D. 13 6 188.50 157 BAJADE, MARK ANTHONY L. 13 7 188.50 158 MADRIAGA, ZHA Q. 13 8 188.50 159 BAJADE, MARIA VICTORIA L. 13 9 188.50 160 VILLENA, REY ANTHONY M. 13 10 188.50 161 SABANAL, JESSICA F. 13 11 199.50 162 FORTICH, OLYVER G. 13 12 191.64 163 HADJAIL, AL-SHARIF B. 14 1 185.36 164 SOLIS, JOAN M. 14 2 185.36 165 VILLALON, NESTOR B. 14 3 188.50 166 VILLALON, LOLITA C. 14 4 188.50 167 ABELLERA, EMMA L. 14 5 188.50 168 VILLALON, EDZEL C. 14 6 188.50 169 ABELLERA, MILENE SHEENA L. 14 7 188.50 170 HO, HEINTJIE G. 14 8 188.50 171 NAGUIT, CHRISTIAN Y. 14 9 188.50 172 NAGUIT, MIGUELITO R. 14 10 188.50 173 NAGUIT, LEONARDO R. 14 11 177.51 174 VILLALON, CHARLES C. 14 12 169.65 175 ASEAS, MADEL ANN D. 15 1 177.51 176 MACAPILI, MYLA D. 15 2 177.51 177 SUIP, JOFFER O. 15 3 180.65 178 DELOS REYES, RONIE A. 15 4 180.65 179 ESPONILLA, MARITES S. 15 5 180.65 180 DELOS REYES, RICHARD G. 15 6 180.65 181 MACROHON, MAYNALYN D. 15 7 180.65 182 VILLALON, ALEJANDRO T. 15 8 180.65 183 RONQUILLO, EDGARDO B. 15 9 180.65 184 SALIK, AMIN A. 15 10 180.65 185 CRUZ, CHARMAINE JOYCE I. 15 11 196.36 186 CRUZ, CRISTINA D.G. 15 12 188.50 187 ALAWI, HASHIM JR. N. 16 1 177.51 188 BAYA, ENRIQUE S. 16 2 177.51 189 MACAPILI, DENNIS C. 16 3 180.65 190 BELDAD, FELICIANO JR. A. 16 4 180.65 191 SINDAC, RODERICK D. 16 5 180.65 192 FABIAN, RICHIE M. 16 6 180.65 193 LUTIAN, DANNY T. 16 7 180.65 194 CARIO, JOSEPHINE D.P. 16 8 180.65 195 CABAHUG, LANY L. 16 9 180.65 196 PARANG, ARMHAN L. 16 10 180.65 197 LAWAS, MIRASOL A. 16 11 175.94 198 APLASIN, FERLINDA L. 16 12 168.08 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.