BIR Ruling No. 330-15

October 7, 2015 BIR RULING NO. 330-15 RA No. 7279; BIR Ruling No. 109-13 Sunshine Homeowners Association, Inc. Brgy. Banica, Roxas City Attention : Victor P. Bolar President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of the Social Housing Finance Corporation (SHFC) dated May 4, 2015, endorsing the sale transaction between Elena Alovera Santos and Sunshine 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". HTcADC Documents submitted disclose that Elena Alovera (TIN: 180-340-558-000), married to Eduardo Santos (hereinafter referred to as Landowner) is the registered owner of a parcel of land, identified as Lot No. 2-B, Plan No. Psd-06-084390 portion of Lot 2, Pcs-06-005406 covered by Transfer Certificate of Title (TCT) No. 097-2014002147 issued by the Registry of Deeds for Roxas City. The aforesaid property is situated at Brgy. Banica, Roxas City with an area of Eighteen Thousand Seven Hundred Thirteen square meters (18,713 sq.m.), more or less. Sunshine Homeowners Association, Inc. (TIN 458-073-901-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On April 7, 2015, the parties executed a Deed of Absolute Sale whereby the Landowner transferred and conveyed the subject property to Sunshine Homeowners Association, Inc. at an agreed price of Fourteen Million Nine Hundred Seventy Thousand Four Hundred Pesos (P14,970,400.00). Pursuant to the certification issued by SHFC, the subject property covered by TCT No. 097-2014002147 actually comprises a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Sunshine Homeowners Association, Inc. secured a housing loan under the CMP, a financing assistance program of the SHFC a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). Documentary Stamp Tax (DST) due on the sale has been paid on April 29, 2015. In support of its request, Sunshine Homeowners Association, Inc. has completely submitted on May 8, 2015 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) SHFC Letter of Guaranty No. CMP-1062; 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's Association; and 10) Other pertinent documents. 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 Elena Alovera, married to Eduardo Santos to Sunshine Homeowners Association, Inc. of the subject property covered by TCT No. 097-2014002147 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 Homeowner's Association shall 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. (BIR Ruling No. 109-13 dated March 21, 2013) aScITE However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 32 of RA 7279. Accordingly, the landowners are liable to pay the documentary stamp tax on the document 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 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. 109-13 dated March 21, 2013) Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the property 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 SUNSHINE HOMEOWNERS ASSOCIATION, INC.Brgy. Banica, Roxas City Name of Beneficiary Blk. No. Lot No. Total Area (sq.m.) 1 Sorio, Mary Grace Villeza 1 1 106.06 2 Apolinario, Anafe Bautista 1 2 108.92 3 Ubierna, Ronil Barrientos 1 3 106.06 4 Ubierna, Lea Lauron 1 4 108.92 5 Ferrer, Israel Russin Fuentes 1 5 116.09 6 Villamor, Christine Mae Ricardo 2 1 110.35 7 Escamilla, Genevieve Fuentes 2 2 103.19 8 Mangaran, Jocenelle Herminigildo 2 3 103.19 9 Fernandez, Lorna Ponce 2 4 103.19 10 Bagares, Randy Baes 2 5 111.79 11 Caguitquit, Jason Aldea 2 6 104.62 12 Gonzales, Leticia Bibar 2 7 110.35 13 Benemile, Roxan Tambal 2 8 111.79 14 Escoltero, Vibylyn Berano 2 9 103.19 15 Escoltero, Vincent Berano 2 10 103.19 16 Cezar, Rodel Jose Recto 3 1 103.19 17 Valeroso, Marylyn Ismael 3 2 103.19 18 Tolores, Maria Roda Mangilog 3 3 103.19 19 Rosaldes, Jean Viente 3 4 103.19 20 Tolores, Rolando Jr. Mangilog 3 5 103.19 21 Dorado, Francisco Jr. Dequina 3 6 103.19 22 Bragancia, Jane Betoca 4 1 108.92 23 Acolola, Melvin Marcelo 4 2 107.49 24 Cerujano, Amelia Albances 4 3 103.19 25 Camacho, Remegilda Feguro 4 4 103.19 26 Villanueva, Rex Alolor 5 1 107.49 27 Bermudo, Federico Jr. Billones 5 2 107.49 28 Villanueva, Ma. Luisa Alolor 5 3 103.19 29 Colmo, Randy Lorenzo 5 4 103.19 30 Felizardo, Eda Lata 6 1 107.49 31 Yabut, Ronald Feliciano 6 2 103.19 32 Villano, Christopher Alorico 6 3 141.88 33 Belleza, Jessie Masangcay 6 4 124.69 34 Delatina, Mark Reyes 6 5 107.49 35 Fernando, Ramil Alor 7 1 103.19 36 Juarez, Mare Joy Obelidon 7 2 103.19 37 Dolor, Romeo III 0 n 7 3 104.62 38 Dolor, Leo Selvester 7 4 103.19 39 Dumaguit, Radgie Dagonano 7 5 103.19 40 Clores, Josefa Luz Advincula 7 6 103.19 41 Alcagna, Ivan Custodio 7 7 103.19 42 Be, Jomar Dapulaza 7 8 103.19 43 Besa, Joseph Ayopila 7 9 103.19 44 Fernando, Me Francisco 7 10 103.19 45 Fernando, Geffy Francisco 7 11 103.19 46 Fernando, Kenn Francisco 7 12 103.19 47 Fernando, Juli Francisco 7 13 103.19 48 Fernando, Gilbert Francisco 7 14 97.46 49 Bolar, Victor Pagayunan 8 1 107.49 50 Bolar, Arn Jayvee Viente 8 2 103.19 51 Acosta, Marivic Enoslay 8 3 103.19 52 Bacuta, Melanie Billones 8 4 104.62 53 Billones, Nerie Casugbo 8 5 103.19 54 Fuentes, Marilyn Florino 8 6 103.19 55 Fuentes, Ralph Neil Florino 8 7 103.19 56 Arenajo, Renalyn Alayon 8 8 103.19 57 Buensalido, Ferconi Valencia 8 9 108.92 58 Nepomuceno, Grecie Acosta 8 10 103.19 59 Galleno, Ronaldo Dorado 8 11 103.19 60 De Justo, James Paul 9 1 103.19 61 Vegas, Maria Cresilda De Justo 9 2 103.19 62 Degamhon, Rommel Dela Rosa 9 3 103.19 63 Francisco, Liezel Daniel 9 4 103.19 64 Francisco, Arnel Ubay 9 5 103.19 65 Ferasol, Gemma Aragon 9 6 103.19 66 Aldea, Ricarte Andong 9 7 103.19 67 Castronuevo, Antonio Flores 9 8 103.19 68 Castronuevo, Judice Rechelle Ann Villena 9 9 103.19 69 Olivare, Grethel Mangao 9 10 104.62 70 Gabiason, Ali Gabat 9 11 103.19 71 Soberano, Michelle Paras 9 12 103.19 72 Soberano, Michael Paras 9 13 103.19 73 Ogpiminina, Ricardo Violata Jr. 9 14 103.19 74 Bacuna, Cherry Lyn Balberona 9 15 103.19 75 Camacho, Tres Marie Feguro 9 16 103.19 76 Avelino, Geraldine Belvis 9 17 110.35 77 Bueno, Marc Anthony Buhat 9 18 103.19 78 Amores, Marcelino Jr. Lorico 9 19 103.19 79 Guillen, Mary Jane Bilan 9 20 103.19 80 Dorado, Maribel Dizon 9 21 103.19 81 Alcazaren, Nelly Alipante 9 22 103.19 82 Ullegue, Twiggy Tinagan 9 23 103.19 83 Andrada, Gonzalo Jr. Aguirre 9 24 103.19 84 Evangelista, Floryfel Melchor 9 25 103.19 85 Labajo, Jocelyn Vergabera 9 26 103.19 86 Azarraga, Kristin Marie Paez 9 27 91.72 87 Medina, Mariam Obligar 9 28 91.72 88 Liba, Cecilia Preciosa 10 1 137.59 89 Talabucon, Candelaria Preciosa 10 2 133.29 90 Be, Juanito Sr. Baquilar 10 3 103.19 91 Preciosa, Gracel Peafel 10 4 103.19 92 Dela Rosa, Antonette Facilo 10 5 103.19 93 Camacho, Wendy Anne Alvero 10 6 103.19 94 Fadriga, Wilfredo Duyag 10 7 103.19 95 Gerapusco, Rosemarie Santiago 10 8 103.19 96 Docil, Arnold Be 10 9 103.19 97 Fuentes, Runji Berico 10 10 103.19 98 Be, Jose Robertson Baquilar 10 11 103.19 99 Sajise, Encarnacion A. 10 12 103.19 100 Balbona, Nio Kenth Dumagpi 10 13 116.09 101 Balbona, Pacita Dumagpi 10 14 120.39 102 Estifano, Malou Llano 11 1 130.42 103 Ausin, Ramelito Maitem 11 2 128.99 104 Arandez, Rosalito Jr. Fulgencio 11 3 103.19 105 Fadriga, Adelita Futotana 11 4 103.19 106 Ogpiminina, Aireen Violata 11 5 103.19 107 Fadriga, Efren Fuliga 11 6 103.19 108 Celino, Arlene Cordovero 11 7 103.19 109 Esporma, Girlie Granado 11 8 103.19 110 Dela Rosa, Lalaine Cerillo 11 9 103.19 111 Fadriga, Helbert Duyag 11 10 103.19 112 Dorado, Toddy Bornales 11 11 103.19 113 Polunan, Armando Fadriga 11 12 103.19 114 Balasbas, Mel Ivan Kier Acosta 11 13 114.65 115 Balasbas, Mel Alarik Acosta 11 14 118.95 116 Espino, Herminigildo Gallardo 12 1 110.35 117 Espino, Myra Gallardo 12 2 108.92 118 Espino, Rosalie Gallardo 12 3 106.06 119 Crespo, Reynaldo Gallardo 12 4 103.19 120 Espino, Noeme Gallardo 12 5 103.19 121 Juare, Melody Elvira 12 6 103.19 122 Crespo, Wilfredo Jr. Gallardo 12 7 103.19 123 Baes, Dante Glory 12 8 103.19 124 Baes, Dindo Glory 12 9 103.19 125 Alojado, Adelyn Dela Cruz 12 10 103.19 126 Dorado, Joel Dumaniel 12 11 103.19 127 Mendoza, Jessa Base 12 12 103.19 128 Bocalid, Nimfa Igtanloc 12 13 103.19 129 Rodriguez, Mary Ann Base 12 14 103.19 130 Bocalid, Norberto Barredo 12 15 103.19 131 Base, Famelalyn Fuentes 12 16 103.19 132 Bocalid, Fatima Igtanloc 12 17 103.19 133 Legaspi, Jocelyn Sitjar 12 18 103.19 134 Bernas, Jude Berry 12 19 103.19 135 Biangco, Jennifer Sitjar 12 20 103.19 136 Aguilar, Ruben Sto. Domingo 12 21 103.19 137 Fabloria, Roval Fesariton 12 22 103.19 138 Dordas, Nieva Batan 12 23 104.62 139 Alejandro, Emelyn Tabigue 12 24 103.19 140 Delfin, Niel Eudela 12 25 103.19 141 Villez, Delia Vigo 12 26 103.19 142 Bernales, Ruel Plaza 12 27 103.19 143 Rodriguez, Rena Buenafe 12 28 103.19 144 Arbues, Margarita Elevada 12 29 103.19 145 Belandres, Rosemay Buenafe 12 30 103.19 146 Talamilo, Ma. Rowena Siwala 12 31 103.19 147 Alisasis, Evelyn Gubaton 12 32 103.19 148 Aldea, Tricia Dela Ferasol 12 33 103.19 149 Alisasis, Nikko Aven Gubaton 12 34 103.19 150 Aldea, Jasper Cart Ferasol 12 35 103.19 151 Guzman, Garry Beldia 12 36 103.19 152 Gaverza, Orly Padios 12 37 103.19 153 Barruga, Jose Pepito Jr. Almanon 12 38 108.92 154 Aldea, Dhona Aragon 12 39 106.06 155 Contreras, Jay Ann Danogo 13 1 146.18 156 Ardea, Rosendo Alparaque 13 2 103.19 157 Arcangeles, May Aguirre 13 3 103.19 158 Gatdula, James Cudiamat 13 4 103.19 159 Claveria, Maria Charena Aguirre 13 5 103.19 160 Arcangeles, Noel Aguirre 13 6 128.99 161 Agdales, Shiela Mae Buensalido 13 7 128.99 162 Rufino, Maria Charon Claveria 13 9 104.62 163 Rufino, Vincent Paitone 13 10 103.19 164 Soberano, Melvin Paras 13 11 103.19 165 Soberano, Marben Paras 13 12 103.19 166 Antojado, Ailyn Oloroso 13 13 103.19 167 Boluso, Freddie Jr. Balonso 13 14 103.19 168 Borbon, Rachel Flores 13 15 103.19 169 Gloria, Jonathan Capagal 13 16 103.19 170 Borbon, Bebydi Marla 13 17 111.79 171 Alcazaren, Juan Libiano 14 1 103.19 172 Aninang, Jessie Arenajo 14 2 103.19 173 Siason, Lovely Atanque 14 3 103.19 174 Anisco, Jovelyn Atanque 14 4 103.19 175 Latosa, Janine Briones 14 5 103.19 176 Latosa, Ruby Briones 14 6 103.19 177 Avelino, Rhoda Borbon 14 7 103.19 Footnotes 1. See Annex for the masterlist of qualified beneficiaries. n Note from the Publisher: Copied verbatim from the official copy. Missing Middle Name.