Transfer of Property by Homeowners Assn. to Its Members - Not Subject to Donor's Tax

November 17, 1993 BIR RULING NO. 440-93 TRANSFER OF PROPERTY BY HOMEOWNERS ASSN. TO ITS MEMBERS NOT SUBJECT TO DONOR'S TAX 50 (b) 398-93 440-93 Christ the King Center CCF Homeowners Association, Inc. Christ the King Parian Rectory Cadlan, Pili, Camarines Sur Attention: Fr . Renato Y . Ruelos, C . M . Project Director This refers to your letter dated August 10, 1993 in effect requesting for a ruling that the transfer of property by the Christ the King Center CCF Homeowners Association, Inc. to its members be exempt from donor's tax in accordance with the Socialized Housing Program and pursuant to Section 20(d)(5) of R.A. 7279 which was approved on March 24, 1992 and published in the March 28, 1992 issue of the Philippine Times Journal and Malaya , newspapers of general circulation. LLjur It appears that Christ the King Center CCF Homeowners Association, Inc., a non-stock, non-profit corporation duly registered with the Securities and Exchange Commission received aid from the Christian Children's Fund; that it bought forty thousand (40,000) square meters of raw land in Cadlan, Pili, Camarines Sur from the spouses Delfin J. Rodriguez and Ester L. Rodriguez covered by Transfer Certificate of Title No. 14543 issued by the Register of Deeds of Camarines Sur; that the aforementioned lot was subsequently subdivided and raffled among the members who now want to have their shares titled; and that the Municipality of Pili, Camarines Sur, issued a certification that the said lot was donated to 247 squatter families for socialized housing purposes. In reply, please be informed that pursuant to Section 20 of R.A. No. 7279, pertinent portion of which reads: "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: cd i xxx xxx xxx (d) Exemption from the payment of the following: xxx xxx xxx (5) Donor's tax for lands certified by the local government units to have been donated for socialized housing purposes. xxx xxx xxx the association which donates to its underprivileged and homeless members property certified to by the local government unit concerned to be used for socialized housing project shall be exempt from the payment of the donor's tax (Revenue Regulations No. 9-93). Upon issuance of this letter of exemption, and registration of the document of donation, a lien upon the Certificate of Title of the lands to be issued in the name of the members 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 project pursuant to R.A. No. 7279. However, the deed of donation shall be subject to the documentary stamp tax of P3.00 imposed under Section 188 of the Tax Code, as amended. cdpr LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue