BIR Ruling No. 429-13

November 14, 2013 BIR RULING NO. 429-13 RA No. 7279; BIR Ruling No. 109-13 Greenfield Homeowners Association, Inc. Purok 2, Balubal, Cagayan de Oro City Attention: Jolly Aian S. Aguaviva President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated February 19, 2013, endorsing the sale transaction between Ignacio G. Obrador and Greenfield 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". Documents submitted disclosed that Ignacio G. Obrador (TIN 299-121-396-000) is the registered owner of parcels of land covered by two (2) Original Certificates of Title (OCT),to wit: OCT No. Area (sq.m.) Tax Declaration No. P-1887 17,800 G-254753 P-1888 19,500 G-254754 37,300 ======= issued by the Registry of Deeds for city of Cagayan de Oro. The aforesaid properties are situated at Brgy. Balubal, Cagayan De Oro City. Greenfield Homeowners Association, Inc. (TIN 428-257-107-000),on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB).On January 31, 2013, the parties executed a Deed of Absolute Sale whereby the owner transferred and conveyed Thirty Six Thousand Five Hundred Nineteen square meters (36,519 sq.m.) portion of the subject properties to Greenfield Homeowners Association, Inc. at an agreed price of Ten Million Nine Hundred Fifty Five Thousand Seven Hundred Pesos (P10,955,700.00).Pursuant to the certification issued by SHFC, Thirty Six Thousand Five Hundred Nineteen square meters (36,519 sq.m.) out of the total Thirty Seven Thousand Three Hundred square meters (37,300 sq.m.) covered by OCT Nos. P-1887 and P-1888 is actually a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Greenfield 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). cIACaT In support of its request, Greenfield Homeowners Association, Inc. has completely submitted on September 13, 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 OCT and Latest Tax Declaration of the Property 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: DTSaHI "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 the landowner to Greenfield Homeowners Association, Inc. of Thirty Six Thousand Five Hundred Nineteen square meters (36,519 sq.m.) portion of the properties covered by OCT Nos. P-1887 and P-1888 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 owner is 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. 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. aATHES 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 Greenfield Homeowners Association, Inc. Purok 2, Balubal, Cagayan de Oro City Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) 1 Silverio, Edwin L. 1 1 160.85 2 Llanera, Godofredo Jr. S. 1 2 150.70 3 Alcantara, Bienvenido T. 1 3 150.70 4 Clavano, Jose Nio P. 1 4 150.70 5 Villacorta, Reynaldo M. 1 5 150.70 6 Pactol, Annabelle F. 1 6 142.23 7 Salcedo, Jennifer T. 1 7 135.46 8 Somosa, Larry Jr. G. 1 8 135.46 9 Bonani, Gritchin B. 1 9 135.46 10 Lacre, Elsie B. 1 10 135.46 11 Cullantes, Rosalie L. 1 11 135.46 12 Saburao, Greg M. 1 12 135.46 13 Ompoc, Joel V. 1 13 135.46 14 Lacre, Jerom B. 1 14 135.46 15 Cagula, Glenn M. 1 15 169.32 16 Cagula, Jennifer M. 1 16 169.32 17 Madelo, Joseph L. 1 17 135.46 18 Dinawanao, Ryan Lucsalyd S. 1 18 135.46 19 Secuya, Nicanor C. 1 19 135.46 20 Germano, Rita T. 1 20 135.46 21 Jangao, Bernabe Jr. A. 1 21 135.46 22 Jangao, Carmela A. 1 22 135.46 23 Eduria, Nobler B. 1 23 135.46 24 Jangao, Ramel A. 1 24 135.46 25 Burdeos, Edilbert Neil S. 1 25 135.46 26 Mendoza, Gerry O. 1 26 135.46 27 Aleman, Joel S. 2 1 137.15 28 Daleon, Richel R. 2 2 137.15 29 Quirino Roger O. 2 3 137.15 30 Espinosa, Jearome A. 2 4 137.15 31 Ramos, Danilo P. 2 5 137.15 32 Amparado, Basilio Jr. A. 2 6 137.15 33 Caete, Esterlita A. 2 7 137.15 34 Alcorin, Junnaper Y. 2 8 137.15 35 Pagal, Ponciano T. 2 9 137.15 36 Violeta, Edith M. 3 1 171.01 37 Montilla, Edibuthz M. 3 2 155.77 38 Violeta, Sweny Chares Melody V. 3 3 160.85 39 Morandante, Rechie M. 3 4 160.85 40 Madria, Jessie M. 3 5 135.46 41 Gozum, Roderick B. 3 6 135.46 42 Ganuelas, Ronald D. 3 7 135.46 43 Talan, Marialyn R. 3 8 135.46 44 Daaca, Annabelle E. 3 9 135.46 45 Balabag, Rebecca G. 3 10 135.46 46 Gualdaquever, Leah A. 3 11 135.46 47 Peladra, Anthony V. 3 12 135.46 48 Humaynon, Rebecca L. 3 13 135.46 49 Gumapac, Editha V. 3 14 135.46 50 Elbambo, Judy A. 3 15 135.46 51 Villahermosa, Rexsan Michael A. 3 16 135.46 52 Balane, Luvlee B. 3 17 135.46 53 Antiga, Lunita C. 3 18 135.46 54 Alcorin, Alfonso G. 3 19 135.46 55 Semitara, Sarah Mae F. 3 20 135.46 56 Artazo, Sheridan C. 3 21 135.46 57 Daquilog, Dante L. 3 22 135.46 58 Manlangit, Delmer O. 3 23 135.46 59 Pasillos, Nilo A. 3 24 135.46 60 Makilang, Gloria Q. 3 25 135.46 61 Estroga, Norilina S. 3 26 135.46 62 Balane, Marife B. 3 27 135.46 63 Pahunang, Higinia B. 3 28 154.08 64 Tagenis, Marvin L. 4 1 174.40 65 Aguaviva, Aian Jolly S. 4 2 159.16 66 Anghag, David Jr. A. 4 3 152.39 67 Ochia, Rolando V. 4 4 152.39 68 Velez, Grace C. 4 5 152.39 69 Atuel, Rhona B. 4 6 152.39 70 Morales, Aida T. 4 7 135.46 71 Duga-Duga, Joan A. 4 8 135.46 72 Quio, Silverio G. 4 9 135.46 73 Damolo-An, Marilyn B. 4 10 135.46 74 Torres, Vanboyd C. 4 11 135.46 75 Vivas, Cicere May V. 4 12 135.46 76 Galaroza, Dolly S. 4 13 135.46 77 Salutin, Gilda A. 4 14 135.46 78 Carnaje, Rosie Jane B. 4 15 135.46 79 Aparece, Rogelio B. 4 16 135.46 80 Rabanes, Marites A. 4 17 135.46 81 Librando, Wilmie D. 4 18 135.46 82 Balistoy, Nice P. 4 19 135.46 83 Barioga, Jeraldin M. 4 20 135.46 84 Galaroza, Elejnt G. 4 21 135.46 85 Lalantacon, Glenn E. 4 22 135.46 86 Sales, Bobby C. 4 23 135.46 87 Magtuba, Roy M. 4 24 135.46 88 Gambito, Rufino M. 4 25 135.46 89 Balili, Carmelito C. 4 26 135.46 90 Serdone, Orcelyn M. 4 27 135.46 91 Baldivino, Viviano H. 4 28 154.08 92 Ampo, Zoilo Jr. L. 5 1 150.70 93 Danao, Ma. Lourdes A. 5 2 137.15 94 Capagngan, Iries F. 5 3 135.46 95 Diapolet, Elma S. 5 4 135.46 96 Ancero, Demetrio Jr. T. 5 5 135.46 97 Mondano, Juvy A. 5 6 135.46 98 Justol, Mely Q. 5 7 135.46 99 Dacup, Jonathan H. 5 8 135.46 100 Jabagat, Wilma C. 5 9 135.46 101 Pialan, Melanie C. 5 10 135.46 102 Secubos, Shiela G. 5 11 135.46 103 Abejo, Alfie J. 5 12 135.46 104 Acot, Mila C. 5 13 135.46 105 Cay, Juvy M. 5 14 135.46 106 Vacaro, Gilbert M. 5 15 135.46 107 Mondano, Diony A. 5 16 135.46 108 Pangan, Leo A. 5 17 135.46 109 Magallano, Michael S. 5 18 154.08 110 Bilbao, Marilyn L. 6 1 150.70 111 Jumilla, Laarni F. 6 2 135.46 112 Poblite, Michael L. 6 3 149.00 113 Zozobrado, Jomar R. 6 4 149.00 114 Poblite, Alice L. 6 5 135.46 115 Arangcon, Elmer B. 6 6 135.46 116 Callora, Miguel Jr. P. 6 7 135.46 117 Legaspi, Meriam M. 6 8 135.46 118 Tangi-An, Eljean C. 6 9 135.46 119 Flores, Susana M. 6 10 135.46 120 Velez, Sheena April P. 6 11 135.46 121 Lazarte, Jose B. 6 12 135.46 122 Siega, Rey P. 6 13 135.46 123 Lazarte, Renante P. 6 14 135.46 124 Pahunang, Christian D. 6 15 135.46 125 Absuelo, Ardelon P. 6 16 135.46 126 Dauba, Gaundencio Jr. T. 6 17 135.46 127 Absuelo, Arnold P. 6 18 154.08 128 Naranjo, Salvacion N. 7 1 154.08 129 Silverio, Brayan S. 7 2 138.84 130 Llanera, Manilyn G. 7 3 135.46 131 Madelo, Reynaldo B. 7 4 135.46 132 Madelo, Raul B. 7 5 135.46 133 Lebadesos, Chona B. 7 6 135.46 134 Paculba, Mariphil L. 7 7 135.46 135 Bersano, Jerom A. 7 8 135.46 136 Orcales, Greg Robin Andrew G. 7 9 135.46 137 Bersano, Grace A. 7 10 135.46 138 Llanto, Anthony B. 7 11 135.46 139 Bunayog, Jeravil L. 7 12 135.46 140 Pampanga, Adelina L. 7 13 135.46 141 Tanquilan, Shirley C. 7 14 135.46 142 Estanislao, Mindel Lou P. 7 15 135.46 143 Llanera, Emily D. 7 16 135.46 144 Cadenas, Ma. Salome L. 7 17 155.77 145 Bunayog, Vilma L. 7 18 176.09 146 Pates, Marivel O. 8 1 133.76 147 Cagaanan, Ernie M. 8 2 133.76 148 Sabaeco, Rene A. 8 3 133.76 149 Sebastian, Joselito P. 8 4 133.76 150 Rosal, Dominador L. 8 5 133.76 151 Tanquilan, Julita C. 8 6 133.76 152 Gaylawan, Teddy S. 8 7 135.46 153 Madelo, Marivic L. 8 8 135.46 154 Abad, Arcelyn P. 8 9 135.46 155 Lacre, Jimmy B. 8 10 135.46 156 Calma, Elda G. 8 11 135.46 157 Balbutin, Junmar O. 8 12 135.46 158 Malones, Max C. 8 13 135.46 159 Samonte, Dave B. 8 14 135.46 160 Caliguid, Irenia D. 8 15 135.46 161 Macarandan, Leo C. 8 16 135.46 162 Cainoy, Alounah D. 9 1 211.65 163 Dalman, Josuah O. 9 2 152.39 164 Dalman, Aldexter O. 9 3 152.39 165 Carcasona, Ronilo D. 9 4 135.46 166 Saab, Maridel G. 10 1 169.32 167 Palisan, Lorinda S. 10 2 169.32 168 Saab, Fahd Abel G. 10 3 162.55 169 Batomalaque, Alien D. 10 4 162.55 170 Saab, Rashid Ilward G. 10 5 135.46 171 Famor, Arlene N. 10 6 135.46 172 Croda, Cherryl P. 10 7 135.46 173 Baguio, Yvonne C. 10 8 135.46 174 Neri, Rhona Mae S. 12 1 169.32 175 Alonto, Ma. Theresa N. 12 2 152.39 176 Solamin, Isidro Jr. P. 12 3 164.24 177 Napone, Ma. Sahlee N. 12 4 164.24 178 Neri, Mark June S. 12 5 135.46 179 Marquez, Mona N. 12 6 135.46 180 Cabaero, Lalleth P. 12 7 135.46 181 Yap, Lawrence B. 12 8 135.46 182 Go, Fairose Faith I. 12 9 135.46 183 Salarda, Lovely B. 12 10 135.46 184 Penkian, Ma. Lourdes D. 12 11 135.46 185 Comcom, Lani L. 12 12 135.46 186 Calunod, Evangeline Y. 12 13 135.46 187 Llaguno, Aljun M. 12 14 135.46 188 Salapa, Rachel P. 12 15 135.46 189 Sabelita, Eric R. 12 16 135.46 190 Abellanosa, Angelina R. 12 17 135.46 191 Abellanosa, Antonette R. 12 18 135.46 192 Abellanosa, Archie R. 12 19 135.46 193 Neri, Roy Jr. A. 12 20 135.46 194 Yabo, Mencho H. 12 21 135.46 195 Mabaso, Chagor L. 12 22 135.46 196 Yecyec, Evangeline G. 12 23 135.46 197 Yabo, Israel H. 12 24 135.46 198 Abellido, Rita A. 12 25 135.46 199 Bulawin, Eleonor D. 12 26 135.46 200 Bibat, Regalada P. 12 27 135.46 201 Gitgitin, Jovy A. 12 28 135.46 202 Abellido, Vilma L. 12 29 135.46 203 Abellido, Wayuma T. 12 30 135.46 204 Mansugotan, Jess Q. 12 31 159.16 205 Combong, Jan Vianney N. 12 32 159.16 206 Gaane, Ilde Resurrecion H. 12 33 169.32 207 Eso, Edward L. 12 34 155.77 208 Sambaan, Reynaldo R. 13 1 169.32 209 Abellanosa, Ma. Ara R. 13 2 157.47 210 Solamin, Philip P. 13 3 164.24 211 Racero, Nimfa O. 13 4 164.24 212 Angelo, Virgilia C. 13 5 135.46 213 Angelo, Michael C. 13 6 135.46 214 Cabaeros, Amaryllis Rae G. 13 7 135.46 215 Pimentel, Gerald L. 13 8 135.46 216 Caballes, Micell A. 13 9 135.46 217 Rodriguez, Denise P. 13 10 135.46 218 Abarquez, Regine May L. 13 11 135.46 219 Alvisor, Sofia Cornelia C. 13 12 135.46 220 Almazan, Doris Leigh P. 13 13 135.46 221 Almazan, Abelardo Jr. B. 13 14 135.46 222 Llanderal, Jenilyn B. 13 15 135.46 223 Pere, Aida T. 13 16 135.46 224 Del Ocampo, Ivy S. 13 17 135.46 225 Lauron, Louie Y. 13 18 135.46 226 Eblacas, Farrah Mae L. 13 19 135.46 227 Boncales, Erlinda D. 13 20 135.46 228 Saguin, Nio Francisco L. 13 21 135.46 229 Saguin, Ma. Lourdes Maricar L. 13 22 135.46 230 Galarpe, Fritzie P. 13 23 135.46 231 Barros, Bailey G. 13 24 135.46 232 Paclijan, May Flor P. 13 25 138.84 233 Paclijan, Reynaldo Jr. P. 13 26 138.84 234 Bagongon, Mitzi Ann C. 13 27 169.32 235 Ellezo, Virna M. 13 28 159.16 236 Arche, Leonarda M. 14 1 135.46 237 Dela Serna, Ma. Socorro R. 14 2 135.46 238 Rodriguez, Ma. Theresa D. 14 3 135.46 239 Llanderal, Janette B. 14 4 135.46 240 Pegarro, Racel L. 14 5 135.46 241 Fajardo, Melvin S. 14 6 135.46 242 Judilla, Nilo Jr. P. 14 7 176.09 243 Ociones, Maverick S. 14 8 155.77 244 Llanderal, Jerome Rey N. 14 9 135.46 245 Roa, Melecia L. 14 10 135.46 246 Lauron, Flordeliza G. 14 11 135.46 247 Ramos, Resie L. 14 12 135.46 248 Lauron, Mark Anthony Y. 14 13 135.46 249 Madelo, Arman L. 14 14 135.46 250 Orcales, Nhoela Marites G. 14 15 135.46 251 Alo, Catalino Jr. O. 14 16 135.46 252 Cinco, Jean Amie L. 14 17 135.46 253 Dharmdas, Vaniya Josephine G. 14 18 135.46 254 Dharmdas, Victor Vincent G. 14 19 135.46 255 Eduarte, Rainy Fe R. 14 20 135.46 256 Gaane, Ma. Melissa Sue P. 14 21 135.46 257 Dharmdas, Voltaire Blaise G. 14 22 135.46 258 Pidoy, Rogi Sherriz R. 14 23 135.46 259 Blanca, Joel A. 14 24 135.46 260. Caballero, Amites L. 14 25 135.46 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.