BIR Ruling No. 349-13

September 11, 2013 BIR RULING NO. 349-13 RA No. 7279; BIR Ruling No. 109-13 Muslim-Christian Women Homeowners Association, Inc. Brgy. Lumbia, Cagayan de Oro City Attention: Marites O. Yap President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated June 13, 2013, endorsing the sale transaction between Owen V. Orteza, et al., Eleanor P. Roque and Muslim-Christian Women 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". IASCTD Documents submitted disclosed that Owen V. Orteza, Arlene O. Thorton, Almira Marie O. Alquitela, Romeo V. Orteza, Olivia O. Quijano and Eleanor P. Roque, are the registered owners of parcels of land covered by two (2) Transfer Certificates of Title (TCT), to wit: Owner TCT No. Area (sq. m.) Owen V. Orteza, et al. 137-2012009573 27,312 Eleanor P. Roque T-72250 13,664 issued by the Registry of Deeds for the Cagayan de Oro City. The aforesaid properties are situated at Brgy. Lumbia, Cagayan de Oro City. Muslim-Christian Women Homeowners Association, Inc. (TIN 426-709-043-000), on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB). On May 21, 2013, the parties executed a Deed of Absolute Sale whereby the owners transferred and conveyed to Muslim-Christian Women Homeowners Association, Inc., the following: TCT No. Area of sale (sq. m.) Contract Price 137-2012009573 23,882 P9,552,800.00 T-72250 653 261,200.00 Pursuant to the certification issued by (SHFC), Twenty Three Thousand Eight Hundred Eighty Two square meters (23,882 sq.m.) out of Twenty Seven Thousand Three Hundred Twelve square meters (27,312 sq.m.) covered by TCT No. 137-2012009573 and Six Hundred Fifty Three square meters (653 sq.m.) out of Thirteen Thousand Six Hundred Sixty Four square meters (13,664 sq.m.) covered by TCT No. T-72250 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Muslim-Christian Women 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). caADSE In support of its request, Muslim-Christian Women Homeowners Association, Inc. has completely submitted on June 21, 2013 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 Properties Sold to the Community Association; 8) 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. 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: IaHSCc 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 landowner to Muslim-Christian Women Homeowners Association, Inc. of Twenty Three Thousand Eight Hundred Eighty Two square meters (23,882 sq.m.) out of Twenty Seven Thousand Three Hundred Twelve square meters (27,312 sq.m.) covered by TCT No. 137-2012009573 and Six Hundred Fifty Three square meters (653 sq.m.) out of Thirteen Thousand Six Hundred Sixty Four square meters (13,664 sq.m.) covered by TCT No. T-72250 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 property shall be used for socialized housing pursuant to RA No. 7279. (BIR Ruling No. 109-13 dated March 21, 2013) 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 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. cDHCAE 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 seller is 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 Muslim-Christian Women Homeowners Association, Inc. Brgy. Lumbia, Cagayan de Oro City Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 MACALA, ASLIAH R. 1 1 96.77 2 MACALA, NORHAYAH R. 1 2 96.77 3 BARODE, JOHAYLA 1 3 96.77 4 ACMAD, AISANIE B. 1 4 96.77 5 BENITO, UNAWAL B. 1 5 96.77 6 CAMAD, Caimah CAIMAH O. 1 6 96.77 7 COMACASAR, SOHRIA S. 1 7 96.77 8 COMACASAR, RAKILA 1 8 96.77 9 DIACA, MINANGOAO 1 9 96.77 10 RATABAN, ALIDA C. 1 10 96.77 11 AMPATUA, SAIRA 1 11 96.77 12 CASAR, SALDALIAH P. 1 12 96.77 13 LOMOLIO, REMEDIOS N. 1 13 96.77 14 AMPA, AMERAH I. 1 14 187.08 15 AMPA, FARIDAH I. 1 15 187.08 16 URANGGAGA, RASHIDA 1 16 96.77 17 PANGANDAMAN, NORMINDA 1 17 96.77 18 DOMATO, JONAIRA T. 1 18 96.77 19 PANAMBULAM, EMILY B. 1 19 96.77 20 PANGADAPUN, FARAIDAH T. 1 20 96.77 21 RADIA, RASMIA M. 1 21 96.77 22 LUCMAN, NORJANAH N. 1 22 96.77 23 MACALI, MARYJANE M. 1 23 96.77 24 ALI, SHORAYAH M. 1 24 96.77 25 AMBOR, MOHMINA G. 1 25 96.77 26 BALINDONG, JANAIRE A. 1 26 96.77 27 BALINDONG, YUSHRA A. 1 27 96.77 28 DADANG, EMELINE G. 1 28 96.77 29 BANGCOLA, ASMARA A. 1 29 96.77 30 DIALEM, KHAYAMERA H. 1 30 96.77 31 DOMADO, SAPHIA M. 1 31 96.77 32 RASUMAN, ASNIAH R. 1 32 135.47 33 ALAWI, AISHA M. 1 34 96.77 34 HASSAN, BAICONA A. 1 35 96.77 35 HASSAN, SALMAH H. 1 36 96.77 36 MACARIMBANG, FATIMA 1 37 96.77 37 MACARIMBANG, SITTIE ALMERA O. 1 38 96.77 38 PAMASOLI, SALIH A. 1 39 96.77 39 SULANTING, CADIDJA M. 1 40 96.77 40 SULANTING, ROHELYN E. 1 41 96.77 41 ZAINODIN, FATIMA EVA I. 1 42 96.77 42 PALAO, WARDA Z. 1 43 96.77 43 RAKIIN, NORAIMA M. 1 45 120.96 44 AMINODEN, NOROLHAYA H. 1 46 112.89 45 PACASUM, SHALMA A. 1 47 112.89 46 SHIEK, YAHARA D. 1 48 112.89 47 SEDIC, NOSAIDA 1 49 112.89 48 RADIA, Hainie SITTIE HAINIE M. 1 50 112.89 49 SUMPINGAN, NORAIDA M. 1 51 112.89 50 OMAR, RAJIS SITTIE ROHANA R. 1 52 183.86 51 GURO, YASNAIDA S. 1 53 183.86 52 ADAMA, AERA A. 1 54 112.89 53 DIPATUAN, RASMIA S. 1 55 112.89 54 GURO, DALIMA B. 1 56 112.89 55 HADJIMOHAMMAD, JOHANA M. 1 57 112.89 56 MANALAO, ALAMINA A. 1 58 112.89 57 MANIRI, NARANHA M. 1 59 112.89 58 GURO, LAARNI Q. 2 1 120.96 59 GURO, JOHAISA M. 2 2 120.96 60 OMAR, AREEJ R. 2 3 129.02 61 GURO, NOROLAIN M. 2 4 129.02 62 OMAR, AREEJ ZAINA R. 2 5 129.02 63 GUROI, JOHAINA M. 2 6 129.02 64 OMAR, ZAINAH R. 2 7 129.02 65 GURO, JOHANISA M. 2 8 129.02 66 BATUAAN, ASLIA 2 9 129.02 67 MAMBUAY, HEDJARA M. 2 10 129.02 68 BANOCAG, SITTIE HEDJARA P. 2 11 129.02 69 BANOCAG, POLILI P. 2 12 129.02 70 ABDULMAJID, NORHIDA G. 2 13 96.77 71 TORALBA, CHARILLUM D. 2 14 129.02 72 COSAIN, PRINCESS MAY P. 2 15 129.02 73 MACABANDING, REYCAR G. 2 16 129.02 74 MACABANDING, ASNIAH M. 2 17 122.57 75 BRUFAL, SUSANA G. 2 18 125.80 76 GURO, RASMIA B. 3 1 111.28 77 PUNDAODAYA, LAWAN H. 3 2 143.54 78 GURO, NAJMIHANIE B. 3 3 96.77 79 AMBOLOTO, ALIA R. 3 4 96.77 80 MARIANO, SITTIE JASMINE G. 3 5 96.77 81 DIANGKA, ZENAIDA G. 3 6 96.77 82 MUSOR, SITTIE NAIDA C. 3 7 96.77 83 DIPATUAN, NORMALA D. 3 8 96.77 84 MANGONDATO, AMAL P. 3 9 96.77 85 DIBAROSAN, LAILANIE D. 3 10 96.77 86 CASAR, JANINA M. 3 11 96.77 87 BENANING, SITTIE AISHA S. 3 12 96.77 88 GURO, HAMIDA S. 3 13 96.77 89 ALONTO, SALIMA M. 3 14 96.77 90 CADAR, NOROLAIN P. 3 15 96.77 91 ELLAS, NESREEN M. 3 16 96.77 92 PUNDAODAYA, RASMIA M. 3 17 127.41 93 MAMBUAY, RASMIA P. 3 18 108.06 94 BALINDONG, MAMOLAWAN 4 1 135.47 95 NAJOS, MARITES T. 4 2 119.34 96 ODAL, RAISA L. 4 3 135.47 97 SALOMABAO, VILMA G. 4 4 119.34 98 SALOMABAO, CRISTINA C. 4 5 129.02 99 BANTUAS, JOHAIRA S. 4 6 129.02 100 SANGCOPAN, ALMAIRAH S. 4 7 129.02 101 CAMAMA, SAPINAH B. 4 8 129.02 102 USODAN, JOHAIRAH 4 9 129.02 103 TOMAWIS, JANESSAH G. 4 10 129.02 104 QUEROL, NOEMI D. 4 11 129.02 105 HADJI USMAN, ZENAIDA T. 4 12 129.02 106 CONSIAL, SALMAH D. 4 13 129.02 107 DAOAYAN, CONSUELO M. 4 14 129.02 108 GOTE, NOROLAIN D. 4 15 119.34 109 MADID, ROHAIRAH S. 4 16 137.09 110 AMIN, ROHAIMA H. 4 17 119.34 111 LINOG, ROHANA G. 4 18 138.70 112 BUAT, SHAMENAH-HALEAH H. 5 1 129.02 113 BACARAT, ANNA FARINA A. 5 2 161.28 114 LUCMAN, SHALEMAH-HAYANESA G. 5 3 96.77 115 SALIC, SHANEYA-HASREIN G. 5 4 96.77 116 ORANGGAGA, SARAH L. 5 5 96.77 117 GAMOR, ASNAMEN B. 5 6 96.77 118 BASHERON, NORAIDA O. 5 7 96.77 119 BANTUAS, ALAYSAH O. 5 8 96.77 120 DOMADO, SARAMIA M. 5 9 96.77 121 MAGARANG, OMAIRAH G. 5 10 96.77 122 MAGARANG, ASHLEY G. 5 11 96.77 123 ALI, ALMAIRAH 5 12 96.77 124 USODAN, RASMIA M. 5 13 96.77 125 LUMONDAYA, NORASALAM G. 5 14 96.77 126 MANGONDAYA, FARIDAH B. 5 15 96.77 127 GURO, KHAYA-SARAH T. 5 16 25.80 128 MANGONDAYA, AISAH G. 5 17 145.15 129 MARIANO, CARINA G. 5 18 125.80 130 MARDAN, OMAIRAH A. 6 3 162.89 131 LUMANDONG, FATIMA 6 4 162.89 132 LACONDE, ROSANA R. 7 1 98.38 133 ROLDAN, JUJI-LYN V. 7 2 119.34 134 AMASULA, MYLENE S. 7 3 98.38 135 DELIGENTE, JOSEPHINE S. 7 4 99.99 136 BOCTOT, JESSICA B. 7 5 99.99 137 SABIDOR, JOSEPHINE G. 7 6 99.99 138 DELACERNA, MARITCHEL M. 7 7 101.60 139 ESTOMO, ANABELLE T. 7 8 101.60 140 SUMAYLO, EVELYN M. 7 9 101.60 141 DAJANG, LIBERATA 7 10 103.22 142 BERONIO, BARBARA JANE S. 7 11 103.22 143 GALLANTES, SHAKEL RAE U. 7 12 103.22 144 AMOLIN, VERONICA V. 7 13 104.83 145 PACQUIAO, MARIEL B. 7 14 104.83 146 BOLASCO, ALFREDA A. 7 15 119.34 147 YAP, ESTELA O. 7 16 104.83 148 HADJIDAUD, SAKINA H. 8 1 103.22 149 MOHSEIN, NAJWAH H. 8 2 96.77 150 ABDULCARIM, INSIRAC H. 8 3 96.77 151 AMINODEN, SITTIE SHAMIEHA A. 8 4 96.77 152 ALAWI, NAWAL H. 8 5 96.77 153 ABUBACAR, SITTIE ASHRINAH H. 8 6 96.77 154 ABDUL, BAQUE WAFAH H. 8 7 96.77 155 TOMAWIS, NORAILYN S. 8 8 96.77 156 LAO, ALIAH JEHAM M. 8 9 96.77 157 MACALA-BASAR, HEDJARAH R. 8 10 96.77 158 GOMEZ, MARILOU M. 8 11 96.77 159 LUCMAN, NORKI 8 12 96.77 160 MICLAT, VICKY C. 8 13 96.77 161 ALI, NORAISA D. 8 14 96.77 162 CAETE, CARMELITA O. 8 15 96.77 163 PUNDAODAYA, NORHAYAH B. 8 16 96.77 164 BANDRANG, NORAINA N. 8 17 96.77 165 IBRAHIM, NORHATA R. 8 18 96.77 166 DIMAO, PERACO B. 8 19 96.77 167 DIMAO, YASMIN 8 20 96.77 168 AMPA, SAMIA I. 8 21 96.77 169 DOMOCAO, SAMSIA K. 8 22 96.77 170 USMAN, SURAYA A. 8 23 114.51 171 AMPA, SAPHIA I. 8 24 145.15 172 WATAMAMA, JOHARA A. 9 1 111.28 173 WATAMAMA, WAHIDAH D. 9 2 129.02 174 BOMBEO, REBECCA C. 9 3 96.77 175 MAAMOR, RASMIA P. 9 4 96.77 176 RACOD, NORANIA Q. 9 5 96.77 177 RACOD, NORMINA G. 9 6 96.77 178 BENITO, NORIADA G. 9 7 96.77 179 RACOD, SAQUIRA B. 9 8 96.77 180 BENASING, JAMALIA N. 9 9 96.77 181 MACACUNA, ZAMORA R. 9 10 96.77 182 BENASING, MAULIDA G. 9 11 96.77 183 SAMO, MARIAVE M. 9 12 96.77 184 TUANO, HASNIA P. 9 13 96.77 185 UBANAN, JENNY Y. 9 14 96.77 186 PEROHAN, MARIANITA T. 9 15 117.73 187 QUILANG, ELMA KHADIJA S. 9 16 108.06 188 MARAVELES, RECHEL T. 10 1 120.96 189 LABOR, ANABELLE C. 10 2 140.31 190 MAPANDI, ARMIDA M. 10 3 96.77 191 LAUIGAN, HAZEL S. 10 4 96.77 192 MONTIA, ROHANISAH M. 10 5 96.77 193 SALOMABAO, LAYRA C. 10 6 96.77 194 MAROHOMBSAR, SITTIE NASHLYN T. 10 7 96.77 195 PANDAPATAN, MINSALINAH R. 10 8 96.77 196 PANAMBULAN, ELEONOR A. 10 9 96.77 197 MAUYAG, ALIAH SAPHIA S. 10 10 96.77 198 ARINDIG, OMAIRAH S. 10 11 96.77 199 MAUYAG, MURSHIDA A. 10 12 96.77 200 SAAD, SITTIE AINAHA M. 10 13 96.77 201 DIRIMBANGUN, ZAALICA G. 10 14 96.77 202 SAAD, RAMIAH T. 10 15 130.63 203 SAMPORNA, JASMINAH 10 16 120.96 204 GURO, CAYANISAH M. 11 1 120.96 205 PANDA, MINDAMERA 11 2 120.96 206 GURO-MARANGIT, SAADIA C. 11 3 120.96 207 GURO, SHARALBANON C. 11 4 120.96 208 SALEM, SALBIA G. 11 5 120.96 209 BANGON, ACLIMAH M. 11 6 120.96 210 MACAUNDAR, OLINGA R. 11 7 120.96 211 LOGUM, DAMUK M. 11 8 120.96 212 EGANG, MARGIE MAE B. 11 9 112.89 213 YAP, MARITES O. 11 10 230.63 214 MONTIA, ASNIAH M. 11 11 112.89 215 JANDAYAN, JAITY M. 11 12 112.89 216 CAGAMPANG, TERESITA W. 11 13 112.89 217 LANGCO, ASLEAH A. 11 14 112.89 218 LAO, LOREN HALLILAHI I. 11 15 112.89 219 SULAIMAN, SITTIE AYNA HAFZA B. 11 16 112.89 220 LUCMAN, AIDA 11 17 112.89 221 DIPASUKAT, GINGER 11 18 112.89 222 CASTILLO, MARICEL N. 11 19 112.89 223 BASAYA, CRISTINA C. 11 20 125.80 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.