Tax Exemption of Association Whose Members are the Actual Occupants of the Land Sold under the Community Mortgage Program

December 7, 1992 BIR RULING NO. 346-92 196 000-00 346-92 Kasalika-Bayan, Inc. Liwayway Street, Bayan-bayan Malabon, Metro Manila Attention: Mr . Oscar E . Miro President Gentlemen : This refers to your letter dated November 12, 1992 requesting confirmation of your opinion that the Association whose members are the actual occupants of the land sold under the Community Mortgage Program (CMP) and duly certified by the National Housing Authority (NHA) as one of the Areas for Priority Development (APD) is exempt from the payment of documentary stamp tax pursuant to Section 25(c) of R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992. cdt It appears that your Association is the buyer of parcels of land located at Bayan-bayanan, Malabon, Metro Manila owned by the spouses Ronald and Generosa Sengco; that the transaction is financed by the National Home Mortgage Finance Corporation (NHMFC) under the Community Mortgage Program of the government whereby the Association stands as the buyer-borrower; that the above-mentioned properties covered by TCT Nos. 3121, 3122 and 3123 are among those included in the list of the Areas for Priority Development, per Presidential Proclamation No. 1967 as identified in the 1983 Locational Reference Handbook prepared by the Housing and Land Use Regulatory Board (HLURB); that the actual occupants of the land are also the members of the said association. In reply, please be informed that pursuant to Section 25(c) of R.A. No. 7279, pertinent portion of which reads: "SEC. 25. Benefits . In addition to the benefits provided under existing laws and other related issuances to occupants of areas for priority development, zonal improvement program sites and slum improvement and resettlement program sites, such occupants shall be entitled to priority in all government projects initiated pursuant to this Act. They shall also be entitled to the following support services: xxx xxx xxx "(b) Exemption from the payment of documentary stamp tax, registration fees, and other fees for the issuance of transfer certificate of titles; xxx xxx xxx the occupants of the land included in the list as among the Areas for Priority Development shall be exempt from the payment of the documentary stamp tax for the issuance of the transfer certificate of titles. Such being the case, the transfer thereof of the property to the occupants who are members of the KASALIKA-BAYAN, INC. and whose land is included in the list of areas for priority development is exempt from the payment of documentary stamp tax imposed under Section 196 of the Tax Code, as amended. However, since the other party (spouses Ronald and Generosa Sengco) are not exempt from the payment of documentary stamp tax pursuant to Section 32 of R.A. 7279, therefore they shall be directly held liable for the payment of the said tax pursuant to Section 173 of the Tax Code, as amended. cdti Very truly yours, VICTOR A. DEOFERIO, JR. Deputy Commissioner Officer-In-Charge