BIR Ruling No. 346-15

October 8, 2015 BIR RULING NO. 346-15 RA No. 7279; BIR Ruling No. 294-14; BIR Ruling No. 283-14 St. Francis of Assisi 1 Homeowners Association, Inc. Sitio Berao, Barangay Lantad, Silay City, Negros Occidental Attention: Ms. Rosalie M. Laquina President Gentlemen : This refers to the letter of Eduardo T. Manicio, Executive Vice President of Social Housing Finance Corporation (SHFC) dated May 28, 2014, endorsing the sale transaction between Lorna Siason Javier , married to Ernesto Javier, Cynthia Siason Maravilla , married to Edgardo Maravilla, Rosemarie C. Siason and Ponciano C. Siason Jr. and St. Francis of Assisi 1 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". ETHIDa Documents submitted disclose that Lorna Siason Javier (TIN 125-775-453-000), married to Ernesto Javier, Cynthia Siason Maravilla (TIN 153-327-168-000), married to Edgardo Maravilla, Rosemarie C. Siason (TIN 163-396-402-000) and Ponciano C. Siason Jr. (TIN 123-041-903-000) are the registered owners (herein referred to as "Landowners'') of a parcel of land covered by: Transfer Certificate of Title Area (sq. m.) Tax Declaration No. T-12165 11,544 12-0010-35672 issued by the Registry of Deeds for City of Silay. The aforesaid property is situated at Sitio Berao, Brgy. Lantad, Silay City, Negros Occidental. St. Francis of Assisi 1 Homeowners Association, Inc. or St. Francis of Assisi Homeowners Association, Inc. (per Certificate of Registration with the BIR with TIN 445-422-766-000), on the other hand, is a homeowners' organization registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. 11350. On October 23, 2013, the parties executed a Deed of Absolute Sale whereby the owners transferred and conveyed Ten Thousand Four Hundred Twelve square meters (10,412 sq.m.) portion of the subject property to St. Francis of Assisi 1 Homeowners Association, Inc. at an amount of Eight Hundred Thirty Three & 55/100 Pesos (Php833.55) per square meter or at a total agreed price of Eight Million Six Hundred Seventy Eight Thousand Nine Hundred Twenty Two Pesos & 60/100 (Php8,678,922.60), Philippine Currency. Pursuant to a Certification issued by SHFC, Ten Thousand Four Hundred Twelve square meters (10,412 sq.m.) out of the Eleven Thousand Five Hundred Forty Four square meters (11,544 sq.m.) covered by TCT No. T-12165 actually comprise a CMP Project and shall be proportionately distributed to the association's one hundred eighty five (185) qualified member-beneficiaries (Annex A). For this purpose, St. Francis of Assisi 1 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). In support of its request, St. Francis of Assisi 1 Homeowners Association, Inc. has completely submitted the following documents: 1) 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 of Guaranty issued by the SHFC; 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 sellers and the Homeowner Association; 10) BIR Form 2000-OT (Documentary Stamp Tax Return); and 11) 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 property 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 St. Francis of Assisi 1 Homeowners Association, Inc. , in so far as the Ten Thousand Four Hundred Twelve square meters (10,412 sq.m.) portion of the property covered by TCT No. T-12165 is concerned, 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 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. 294-14 dated July 23, 2014) 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 landowners are liable to pay the documentary stamp tax on the documents 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. (BIR Ruling No. 283-14 dated July 7, 2014) cSEDTC 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 Nos. 294-14 dated July 23, 2014 and 283-14 dated July 7, 2014) 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. AIDSTE Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX A St. Francis of Assisi 1 Homeowners Association, Inc. Sitio Berao, Brgy. Lantad, Silay City, Negros Occidental Master list of Beneficiaries Name of Beneficiary Block No. Lot No. Total Lot Area 1 Carisma, Redella 1 1 62.78 2 Carisma, Redin 1 2 61.50 3 Ganar, Hazer 1 3 41.00 4 Dequia, Ma. Rowella 1 4 41.00 5 Flores, Celmy 1 5 61.50 6 Flores, Alfred 1 6 61.50 7 Posadas, Jennifer 1 7 43.56 8 Machan, Rebecca 1 8 55.09 9 Flores, Lorena 1 9 38.43 10 Flores, Alexie John 1 10 38.43 11 Cabrillos, Edsel 1 11 44.84 12 Arcala, Roselyn 1 12 43.56 13 Llorca, Mariabe 1 13 43.56 14 Gabiota, Sandra 1 14 56.37 15 Mascuana, Ma. Teresa 1 15 56.37 16 Severino, Rommel 1 16 85.84 17 Javellana, Shirley 1 17 88.40 18 Bedrio, Cecilia 1 18 58.93 19 Bedrio, Jenny 1 19 58.93 20 Carmona, Haide 1 20 66.62 21 Gulmatico, Jessie John 1 21 38.43 22 Dayog, Mario Vengie 1 22 39.72 23 Layos, Thorly Jr. 1 23 56.37 24 Pantillo, Lani 1 24 56.37 25 Valencia, Herlina 2 1 67.90 26 Valencia, Marvin 2 2 69.18 27 Albiso, Jean Ann 2 3 76.87 28 Gonzales, Edwin 2 4 78.15 29 Damiles, Ronald 2 5 78.15 30 Jimena, Ramil 2 6 79.43 31 Jemina, Noel 2 7 53.81 32 Solano, Jona 2 8 53.81 33 Panogan, Rowena 3 1 47.40 34 Abrenica, Nena 3 2 49.97 35 Villegas, Ma. Luisa 3 3 47.40 36 Villegas, Andy Miguel 3 4 46.12 37 Villegas, Analou 3 5 46.12 38 De Leon, Ann Marie 3 6 43.56 39 Brigole, Rowelly 4 1 46.12 40 Brigole, John Rex 4 2 47.40 41 Brigole, Jose John 4 3 39.72 42 Brigole, Rowena 4 4 38.43 43 Patrona, Mamerto Jr. 4 5 60.21 44 Patrona, Rannie 4 6 60.21 45 Noledo, Mario 4 7 76.87 46 Puyugao, Cesar 4 8 47.40 47 Dela Cruz, Mary Jean 4 9 46.12 48 Severino, Atilla 4 11 44.84 49 Severino, Emmanuel 4 12 44.84 50 Arevalo, Jeffrey 4 13 41.00 51 Arevalo, Daisy 4 14 41.00 52 Villarta, Minerva 4 15 51.25 53 Villarta, Ma. Melly 4 16 56.37 54 Fuentes, Jerry 4 17 55.09 55 Betila, Sarah 4 18 66.62 56 Ebalde, Delia 4 19 75.59 57 Jamora, Ma. Rita 4 20 57.65 58 Balili, Ma. Leizl 4 21 57.65 59 Jamora, Ma. Louzl 4 22 57.65 60 Laquia, Nicanor Jr. 5 1 58.93 61 Laquia, Ronick 5 2 64.06 62 Laquia, Rosalie 5 3 61.50 63 Rabala, Yvermely 5 4 62.78 64 Dela Puerta, Rubi 5 5 64.06 65 Gonzales, Erma 5 6 43.56 66 Gonzales, Obet 5 7 43.56 67 Gonzales, Ronnie 5 8 43.56 68 Rubio, Liza 5 9 64.06 69 Rubio, Edna 5 10 64.06 70 Armigos, Lorna 5 11 52.53 71 Armigos, Ivan 5 12 52.53 72 Armigos, Ryan 5 13 52.53 73 Camaria, Ramero Jr. 5 14 64.06 74 Camaria, Ramiro Sr. 5 15 64.06 75 Camaria, Ramil 5 16 65.34 76 Cachuela, Hernani 6 1 52.53 77 Batusin, Dennis 6 2 52.53 78 Solano, Eden 6 3 52.53 79 Solano, Eduardo Jr. 6 4 51.25 80 Palacios, Elizabeth 6 5 47.40 81 Palacios, Mark Gil 6 6 48.68 82 Escototo, Carmelo Jr. 6 7 48.68 83 Escototo, Cesar 6 8 47.40 84 Briones, Ernesto 6 9 64.06 85 Enoposa Michael Pane 6 10 64.06 86 Sandoval, Jemon 6 11 64.06 87 Osden, Mary Grace 6 12 47.40 88 Salgado, Reynaldo 6 13 48.68 89 Armigos, Angelo 7 1 56.37 90 Armigos, Ariel 7 2 55.09 91 Armigos, Allysa 7 3 55.09 92 Armigos, Josefina 7 4 57.65 93 Villaran, Jonathan 7 5 57.65 94 Bacton, Nona Jean 7 6 55.09 95 Burla, Edgardo 7 7 56.37 96 Caballero, Nelly 7 8 53.81 97 Armigois, Sarah 7 9 56.37 98 Armigos, Josephine 7 10 53.81 99 Caro, Jowil 7 11 56.37 100 Caro, Wilfredo 7 12 52.53 101 Manzanares, Ramona 8 1 62.78 102 Villaran, Condrado 8 2 67.90 103 Armigos, Arvin 8 3 62.78 104 Humbid, Ana Marie 8 4 60.21 105 Villaran, Rosana 8 5 64.06 106 Guliman, Merlyn 8 6 64.06 107 Ravino, Renato 8 7 64.06 108 Guliman, May 8 8 64.06 109 Villaran, Pancho 8 9 64.06 110 Villaran, Danilo 8 10 64.06 111 Guliman, Jhunil 8 11 70.46 112 Ojoylan, Rey 8 12 62.78 113 Villanueva, Salvador 9 1 51.25 114 Villanueva, Dhith Myxxene 9 2 49.97 115 Navigar, Mia May 9 3 51.25 116 Mansan, Rhea 9 4 49.97 117 Serion, Mary Ann 9 5 49.97 118 Serion, Chris 9 6 49.97 119 Deldoc, Rosela 9 7 52.53 120 Dacaldacal, Rochel 9 8 41.00 121 Seballos, Dolly 9 9 43.56 122 Salgado, Cecille 9 10 43.56 123 Villanueva, Gloria 9 11 48.68 124 Villanueva, Mark John 9 12 48.68 125 Bermudez, Karen 9 13 44.84 126 Casipe, Rommel 9 14 43.56 127 Teodoro, Aron 10 1 55.09 128 Teodoro, Aron Mark 10 2 60.21 129 Baliaut, Mercy 10 3 55.09 130 Alpas, Grace 10 4 56.37 131 Panesa, Margie 10 5 56.37 132 Panesa, Nestor 10 6 56.37 133 Panesa, Rhea 10 7 56.37 134 Guillano, Myrna 10 8 51.25 135 Guillano, Mark 10 9 49.97 136 Guillano, Mike 10 10 49.97 137 Cordova, Cyril 11 1 51.25 138 Insigne, Carmela 11 2 49.97 139 Azuro, Arje 11 3 49.97 140 Azuro, Arnold Jr. 11 4 49.97 141 Insuma, Jesus 11 5 51.25 142 Ducado, Cerina 11 6 49.97 143 Dominguez, Lori Ann 11 7 47.40 144 Domiguez, Lorine Jr. 11 8 49.97 145 Gamboa, Melquiades 11 9 98.65 146 Gamboa, Ma. Cristina 11 10 98.65 147 Billones, Marissa 12 4 94.81 148 Singson, Donna 12 5 49.97 149 Villarte, Pilar 12 6 66.62 150 Villarte, Edwin Jr. 12 7 51.25 151 Ojera, Merlita 12 8 60.21 152 Ojera, Kee-Ann 12 9 67.90 153 Ortega, Andres 12 10 83.28 154 Valdez, Alma 12 11 65.34 155 Nievera, Leopoldo 12 12 56.37 156 Sanes, Sandro 12 13 70.46 157 Sanes, Donato, Jr. 12 14 70.46 158 Recente, Renante B. 12 15 76.87 159 Tupas, Christopher C. 12 16 47.40 160 Tamon, Susan 12 17 64.06 161 Junsay, Ma. Janelle 12 18 66.62 162 Jandongan, Karol 12 19 66.62 163 Ojera, Karen 12 20 47.40 164 Joso, Amy 12 21 46.12 165 Pamplona, Mary Fehn 13 1 62.78 166 Camaria, Rosie 13 2 62.78 167 Teodoro, Rey-Ann 13 3 47.40 168 Teodoro, Reynan 13 4 49.97 169 Teodoro, Emily 13 5 48.68 170 Labor, Emily 13 6 38.43 171 Labor, Ronnel 13 7 38.43 172 Rabino, Androla 13 8 52.53 173 Borromeo, Julie Ann 13 9 52.53 174 Rabino, Alona 13 10 52.53 175 Rabino, Arnilo 13 11 55.09 176 Aglobo, Albert 14 1 65.34 177 Vias, Arnold 14 2 65.34 178 Vias, Mary Ann 14 3 62.78 179 Vias, Arnel 14 4 46.12 180 Cardenas, Ma. Cristina 14 5 57.65 181 Hernaez, Jeno 14 6 57.65 182 Jimenea, Adrian P. 14 7 58.93 183 Arriola, Mary Joy 14 8 57.65 184 Tongcua, Gerardo Jr. 14 9 58.93 185 Tongcua, Roger 14 10 58.93 Total: 10,412.00 n ======== n Note from the Publisher: Copied verbatim from the official copy.