Conveyance of Property to NHA - Tax Consequences

September 8, 1993 BIR RULING NO. 367-93 CONVEYANCE OF PROPERTY TO NHA TAX CONSEQUENCES 21 (E) 72-93 67-93 National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Mr . Epifanio C . Recana OIC, Legal Department This refers to your letter dated July 20, 1993 requesting in effect, for confirmation of your opinion that the conveyance of property by private individuals in your favor to be used in your Socialized Housing Projects is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. 7279, otherwise known as the Urban Development and Housing Act of 1992. Records disclosed that a property (raw land) located at sitio Espina, Bo. Ibaba, Caloocan City with an area of 10,469 square meters, covered by Transfer Certificate of Title No. 38455 issued by the Registry of Deeds of Caloocan City and owned by Natividad de la Cruz, married to Miguel Arevalo, is the subject of the Resolution by the Supreme Court in G.R. No. 94856, National Housing Authority vs. The Court of Appeals, et. al., dated July 1, 1993 approving the Compromise Agreement between the NHA and the landowner, Natividad de la Cruz, married to Miguel Arevalo, whereby the latter conveyed to the former the aforesaid property which it took possession of, utilized and developed as component part of its Dagat-Dagatan Development Project, a low-cost housing project for the benefit of marginal income families, by virtue of a "Writ of Possession" issued by the Regional Trial Court dated November 24, 1975, hence this request. acd In reply, please be informed that pursuant to Sections 19 and 20 of R.A. No. 7279, the pertinent portions of which read: "Sec. 19. Incentives for the National Housing Authority. The National Housing Authority, being the primary government agency in charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed for and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of transfer certificates of title . (Emphasis supplied) "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector: xxx xxx xxx (d) Exemption from the payment of the following: (1) Project-related income taxes; (2) Capital gains tax on raw lands used for the project; xxx xxx xxx the conveyance of the aforesaid property, covered by Transfer Certificate of Title No. 38455 in the name of Natividad de la Cruz, married to Miguel Arevalo, in favor of the National Housing Authority by virtue of the aforesaid Supreme Court Resolution dated July 1, 1993 supra is exempt from the payment of capital gains tax and documentary stamp tax. cdtech LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue