BIR Ruling No. 430-13

November 14, 2013 BIR RULING NO. 430-13 RA No. 7279; BIR Ruling No. 109-13 Llanderal Homeowners Association, Inc. Sinsuat Ext. Magsaysay, Kidapawan City Attention: Ricky B. Bechayda President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation (SHFC) dated July 25, 2013, endorsing the sale transaction between Sabina R. Llanderal and Llanderal 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 disclose that Sabina R. Llanderal (TIN 427-663-010-000) (hereinafter referred to as landowner) is the registered owner of two (2) parcels of land covered by two (2) Transfer Certificates of Title, to wit: TCT No. Area (sq.m.) Tax Declaration No. T-104836 12,528 181040-99-00634 T-104837 37,580 181040-99-00633 50,108 ======= issued by the Registry of Deeds for the Province of North Cotabato. The aforesaid properties are situated at Brgy. Magsaysay, Kidapawan, Cotabato Province. Llanderal Homeowners Association, Inc. (TIN 283-977-952-000),on the other hand, is a homeowner's organization duly registered with the Housing and Land Use Regulatory Board (HLURB).On July 11, 2013, the parties executed a Deed of Absolute Sale whereby the landowner, thru their Attorney-in-Fact, Luis Enrique Llanderal, transferred and conveyed Thirty Three Thousand Eighteen and 27/100 square meters (33,018.27 sq.m.) portion of the subject properties to Llanderal Homeowners Association, Inc. at an agreed price of Eleven Million One Hundred Ninety Seven Thousand Three Hundred Eighty Seven and 48/100 Pesos (P11,197,387.48).Pursuant to the certification dated June 11, 2013 issued by SHFC, Thirty Three Thousand Eighteen and 27/100 square meters (33,018.27 sq.m.) out of the total Fifty Thousand One Hundred Eight square meters (50,108 sq.m.) covered by TCT Nos. T-104836 and T-104837 actually comprise a Community Mortgage Program (CMP) Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Llanderal 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). cHDAIS In support of its request, Llanderal Homeowners Association, Inc. has completely submitted on September 18, 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 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 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: ESCacI "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 landowners to Llanderal Homeowners Association, Inc. of Thirty Three Thousand Eighteen and 27/100 square meters (33,018.27 sq.m.) portion of the properties covered by TCT Nos. T-104836 and T-104837 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 properties 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 landowner is liable to pay the documentary stamp tax on the document 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. HSAcaE 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 Llanderal Homeowners Association, Inc. Sinsuat Ext. Magsaysay, Kidapawan City Name of Beneficiary Blk. Lot Total Area No. No. (sq.m.) Area 1 TCT No. T-104836 1 Abagon, Jean A. 1 1 181.95 2 Millares, Jeschelle Marie D. 5 168.47 3 Labesores, Daisy N. 7 166.78 4 Canja, Danilo P. 2 1 185.32 5 Canja, Pablito P. 2 185.32 6 Labawan, Jannette E. 3 185.32 7 Eder, Monaliza G. 4 185.32 8 Selidio, Ryan Jay D. 3 2 166.78 9 Gatus, Nida E. 3 251.02 10 Yaos, Miguel B. 4 168.47 11 Magsumbol, Banjo D. 5 170.15 12 Jalme, Jobert G. 8 229.12 13 Panerio, Amelita F. 10 168.47 14 Delgado, Merlyn O. 12 168.47 15 Getauban, Raul P. 4 2 185.32 16 Sato, Michael T. 3 202.16 17 Barandino, Raissa Innah G. 6 198.79 18 Barandino, Manuel Jr. M. 7 170.15 19 Rasgo, Mary Rose B. 8 168.47 20 Barandino, Rizalino III G. 9 168.47 21 Miro, Maria Socorro A. 10 168.47 22 Evangelio, Dorothia S. 12 168.47 23 Unico, Nilo I. 13 168.47 24 Gasang, Renan K. 5 1 144.88 25 Gasang, Reno Jay K. 2 166.78 26 Evangelista, Rey O. 3 144.88 27 Evangelista, Ronald O. 4 185.32 28 Alquiza, Heine G. 6 222.38 29 Alquiza, Nenita C. 7 294.82 30 Montiel, Gloria L. 8 168.47 31 Angel, Allan Rey M. 9 168.47 32 Tan, Antonio R. 10 168.47 33 Tan, Pepe R. 11 168.47 34 Tan, Domingo R. 12 168.47 35 Tan, Emmanuel R. 13 168.47 36 Rocaberte, Monette L. 6 1 168.47 37 Rebuyas, Jenny R. 2 168.47 38 Bahinting, Marivic G. 7 245.96 39 Ponteres, Rechelle S. 7 1 158.36 40 Ponteres, Reyshan S. 2 165.10 41 Caedo, Bienvenido Jr. D. 3 160.05 42 Estao, Rio D. 4 166.78 43 Rufino, Ariel C. 5 160.05 44 Jodicpa, Fernando N. 6 166.78 45 Arnado, Aime A. 7 160.05 46 Amar, Bernard C. 8 166.78 47 Polinio, Ramonito T. 9 158.36 48 Balinas, Malou G. 10 165.10 49 Origen, Jennilyn G. 8 1 173.52 50 Pregil, * Cheryl A. * 2 180.26 51 Flor, Merill D. 3 176.89 52 Lapayag, * Lavella S. * 4 181.95 53 Canon, Michelle E. 5 176.89 54 Sagud, * Helen Mae B. * 6 181.95 55 Oton, Roselyn F. 7 176.89 56 Rubi, * Jeanet D. * 8 181.95 57 Calunsag, Evelyn E. 9 175.21 58 Manos, * Alma P. * 10 181.95 59 Sarabia, Remedios L. 9 1 176.89 60 Bechayda, Ricky B. 4 168.47 61 Ramas, Jessie E. 5 168.47 62 Napoles, Marcial G. 6 168.47 Area 2 TCT No. T-104837 63 Avenis, Marilyn B. 1 3 168.47 64 Paghunasan, Melanie S. 6 168.47 65 Macatabon, Leizel O. 12 168.47 66 Betita, Rutchel S. 14 168.47 67 Obrador, Irene G. 15 168.47 68 Medina, Catrina C. 16 180.26 69 Siago, Maricyl M. 3 2 195.42 70 Porras, Prudencio Jr. M. 4 197.11 71 Valdevieso, Paul Francis B. 5 192.05 72 Bataan, Veronica D. 8 197.11 73 Datuin, Neil L. 9 190.37 74 Moranta, Juwil P. 10 195.42 75 Torion, Ruby A. 4 2 175.21 76 Languido, Arnela A. 4 176.89 77 Cuerpo, Rochel D. 5 173.52 78 Salcedo, Jovin T. 6 176.89 79 Jotojot, Pichie M. 9 173.52 80 Apostol, Jo Ann B. 10 176.89 81 Serarzo, Ricky John G. 11 171.84 82 Serarzo, Michael G. 12 176.89 83 Songcayauon, * Randy C. 5 *1 168.47 84 Belotindos, * Elsa C. *2 168.47 85 Gasang, Dario S. 3 168.47 86 Gasang, Arnyl C. 4 168.47 87 Gonzaga, Geraldine D. 5 168.47 88 Reponte, Emelio B. 6 168.47 89 Calopez, Leonora O. 7 168.47 90 Arnaiz, Noemie O. 8 168.47 91 Monteroso, Noel L. 9 168.47 92 Arnaiz, Ramelita O. 10 168.47 93 Rimasen, Joselyn S. 11 166.78 94 Parcasio, Ivy R. 12 166.78 95 Reyes, * Minaflor C. 6 *1 168.47 96 Francisco, * Mary S. *2 168.47 97 Mendoza, Cerilo M. 3 168.47 98 Reyes, Alegrio C. 4 168.47 99 Bonggo, Bonnie B. 5 168.47 100 Molina, Edna N. 7 168.47 101 Lacia, Ian Christie P. 9 168.47 102 Lansao, Jordan P. 10 168.47 103 Pregil, Elmer A. 12 166.78 104 Alamis, Rhemy I. 7 5 168.47 105 Abawan, Cherry A. 7 168.47 106 Pandayan, Nejane P. 9 168.47 107 Luayon, Ellen B. 10 168.47 108 Gubat, Airene G. 11 166.78 109 Teves, Joy Marie D. 12 166.78 110 Lomboy, Clarita A. 8 1 166.78 111 Lomboy, Dante A. 2 166.78 112 Mirasol, Nemia E. 3 168.47 113 Sanchez, Reuben A. 4 168.47 114 Lumangtad, Marian T. 5 168.47 115 Sanchez, Jose A. 6 168.47 116 Unico, Rosalie V. 9 168.47 117 Legaria, Rodolfo C. 11 168.47 118 Del Rosario, Laurence S. 13 168.47 119 Nuez, Edwin D. 16 168.47 120 Famisan, Marchelle M. 19 168.47 121 Romero, Salvador S. 21 168.47 122 Marapon, Floramae M. 22 168.47 123 Romero, Edison S. 23 298.19 124 Salazar, Rebecca E. 24 252.70 125 Epiz, Remia S. 25 252.70 126 Llera, Roland T. 27 252.70 127 Abeleda, Joey M. 9 1 166.78 128 Abeleda, Natividad M. 2 166.78 129 Gacasan, Rei Jean A. 3 168.47 130 Manapat, Arnulfo V. 4 168.47 131 Cajandig, Cheloy C. 5 168.47 132 Manapat, Arnold V. 11 168.47 133 Sumagaysay, Marivic H. 13 168.47 134 Yanga, Celso B. 15 266.18 135 Castillare, Gemma E. 17 269.55 136 Begasin, Jeany B. 10 1 166.78 137 Gonzales, Aileen S. 2 166.78 138 Fernandez, Nenita O. 3 168.47 139 Rollenas, Rosita V. 4 168.47 140 Bechayda, Jun-jun B. 6 168.47 141 Oberio, Lariza S. 7 168.47 142 Carado, Leonora O. 8 168.47 143 Bargamento, Aneolyn L. 9 168.47 144 Bohawe, Esterlita O. 10 168.47 145 Baruc, Viverly P. 11 168.47 146 Baruc, Renante G. 12 168.47 147 Candari, Virgen M. 13 168.47 148 Elentorio, Melodena G. 14 168.47 149 Mujeres, Daniel E. 15 131.41 150 Salmorin, Lourdes D. 16 151.62 151 Dagaojes, Donna Jane O. 11 2 146.57 152 Tacadao, Hilyn T. 4 161.73 153 Tacadao, Analie T. 6 175.21 154 Carpina, Alberto Jr. G. 10 220.69 155 Mequila, Windel D. 12 190.37 156 Salamero, Elvis B. 14 90.97 157 Tudio, Rudy O. 15 90.97 158 Carpina, Genalyn G. 16 154.99 159 Agapay, Bernie A. 17 144.88 160 Blanco, Lavin S. 12 1 168.47 161 Berja, Josephine D. 3 170.15 162 Suarez, Maris Fe E. 5 170.15 163 Betita, Nelly O. 7 170.15 164 Wong, Janith A. 8 170.15 165 Espaola, Rena M. 9 170.15 166 Cabrera, Remar S. 11 170.15 167 Sarenas, Ma. Nelia S. 12 170.15 168 Sarenas, April Hope S. 13 170.15 169 Alvero, Catherine S. 14 170.15 170 Abling, Mary Rose T. 15 170.15 171 Tan, Marilou A. 16 170.15 172 Namia, Antonio C. 17 170.15 173 Samillano, Mickel P. 19 274.60 174 Desamparado, Rodolfo A. 21 180.26 175 Gonzales, Sally R. 22 151.62 176 Lastica, Antonio S. 13 1 176.89 177 Laguna, Felipe Jr. E. 2 176.89 178 Ventula, Christopher M. 3 178.58 179 Cruz, Michael C. 4 178.58 180 Palita, Jozy M. 6 178.58 181 Mendez, Joseph S. 15 178.58 182 Cambarihan, Jeneviv D. 16 178.58 183 Canay, Loraine C. 18 178.58 184 Pardias, Beejee I. 20 178.58 185 Descutido, Analiza D. 14 1 154.99 186 Quismondo, Luz Shiela I. 2 160.05 187 Oton, Rodelyn F. 3 160.05 188 Malinao, Ernesto Jr. D. 4 160.05 The following beneficiaries whose names have asterisk are those whose lots are divided into two (2) due to splitting of the site development plan according to its titles as required by the Bureau of Lands. AIHTEa Area 1 Area 2 Area Area Total Area Names Blk. Lot (sq.m.) Blk. Lot (sq.m.) (sq.m.) 1 Francisco, Mary S. 4 14 15 6 2 85 100 2 Reyes, Minaflor C. 4 15 15 6 1 85 100 3 Belotindos, Elsa C. 5 14 15 5 2 85 100 4 Songcayauon, Randy C. 5 15 15 5 1 86 100 5 Pregil, Chery 8 2 86 2 1 21 107 6 Lapayag, Lavella 8 4 86 2 2 22 108 7 Sagud, Helen Mae 8 6 86 2 3 22 108 8 Rubi, Jeanet 8 8 86 2 4 22 108 9 Manos, Alma 8 10 87 2 5 21 108 Footnotes 1. See Annex for the masterlist of qualified beneficiaries.