BIR Ruling No. 454-11

November 16, 2011 BIR RULING NO. 454-11 RA No. 7279; BIR Ruling No. 130-10; BIR Ruling No. 040-10; BIR Ruling No. SH-(110) 710-09; BIR Ruling No. DA-567-98 Villa Miranda Homeowners' Association of Taguig, Inc. Barangay Palingon-Tipas, Taguig City Attention: Victor P. Flores President Gentlemen : This refers to the letter of Ma. Ana R. Oliveros, President of Social Housing Finance Corporation dated May 24, 2011, received by this Office on July 21, 2011, requesting tax exemption, in behalf of Villa Miranda Homeowners' Association of Taguig, Inc., from the payment of Capital Gains Tax and other taxes in accordance with the Republic Act No. 7279, otherwise known as the Urban Development and Housing Act of 1992. It appears that Leoncia Natividad-Miranda with Tax Identification Number 914-977-999-000 and Marcela P. Miranda with Tax Identification Number 245-244-499-000, are the registered owners of a parcel of land, identified as Plan Psu-174186, L.R. Case No. N-2690, LRC Rec. No. N-18315 by Transfer Certificate of Title (TCT) No. 5398 issued by the Registry of Deeds for Taguig City. The aforesaid property is situated at Brgy. Tipas, Taguig City with an area of six thousand three hundred nineteen square meters (6,319 sq.m.), more or less. Villa Miranda Homeowners' Association of Taguig, Inc. with Tax Identification Number 251-951-850-000, on the other hand, is a homeowner's organization registered with the Housing and Land Use Regulatory Board (HLURB). On April 27, 2011, the parties executed a Deed of Sale whereby the owners thru their Attorney-in-Fact, Froilan N. Miranda with Tax Identification Number 200-137-963-000 transfer and convey five thousand eight hundred sixty nine and 56/100 square meters (5,869.56 sq.m.) of the subject property to Villa Miranda Homeowners' Association of Taguig, Inc. at an agreed price of Nine Million Six Hundred Eighty Four Thousand Seven Hundred Seventy Four Pesos (P9,684,774.00). Pursuant to a certification issued by Social Housing Finance Corporation, five thousand eight hundred sixty nine and 56/100 square meters (5,869.56 sq.m.) of the property covered by TCT No. 5398 is actually a CMP Project and shall be proportionately distributed to the association's qualified member-beneficiaries. 1 For this purpose, Villa Miranda Homeowners' Association of Taguig, Inc. secured a housing loan under the Community Mortgage Program (CMP), a financing assistance program of the Social Housing Finance Corporation (SHFC) a subsidiary of the National Home Mortgage Finance Corporation (NHMFC). TCHcAE In reply, please be informed that pursuant to Sections 20 and 32 of RA No. 7279, pertinent portions of which state that: "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: (d) Exemption from the payment of the following: (2) Capital gains tax on raw lands used for the project; xxx xxx xxx 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 of the aforestated property by Leoncia Natividad-Miranda and Marcela P. Miranda to Villa Miranda Homeowners' Association of Taguig, Inc., in so far as the five thousand eight hundred sixty nine and 56/100 square meters (5,869.56 sq.m.) portion thereof is concerned is exempt from the capital gains tax. (BIR Ruling No. 130-10 dated December 1, 2010) However, the documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 of RA 7279. Accordingly, Leoncia Natividad-Miranda and Marcela P. Miranda are 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. DA-567-98 dated December 18, 1998; BIR Ruling No. SH-(110) 710-09 dated November 13, 2009) ACaEcH It is, however, understood that this ruling is never intended and shall not be construed as giving authority to the concerned Register of Deed to effect transfer of the land titles 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. (BIR Ruling No. 040-10 dated August 27, 2010) Notwithstanding the foregoing, the Bureau of Internal Revenue shall conduct verification and post-audit that the actual occupants of the properties transferred under the CMP are qualified beneficiaries and therefore, the sellers are 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. aIcCTA Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ATTACHMENT VILLA MIRANDA HOMEOWNERS ASSOCIATION OF TAGUIG, INC. Barangay Palingon-Tipas Taguig City Name of Beneficiary Blk. No. Lot No. Total Area (sq.m.) 1. LASALA, GERARDO A. 1 1 36.59 2. BAUTISTA, LIBERTY L. 1 2 36.59 3. LASALA, GERALDINE V. 1 3 36.59 4. LOMIBAO, NARCISO T. 1 4 36.59 5. GINGONE, JESUS G. 1 5 36.59 6. ESTRIBELLO, SHERYLL L. 1 6 36.59 7. VALENCIA, JOAN L. 1 7 36.59 8. CAPOQUIAN, SHARON L. 1 8 36.59 9. JULIAN, NENITA T. 1 10 36.59 10. TESALONA, AILENE A. 1 11 36.59 11. OMANG, NOLI D. 1 12 36.59 12. DELOS REYES, HENRY H. 1 13 36.59 13. JOLO, ODELON P. 1 14 36.59 14. SIBANICO, ARNOLD M. 1 15 36.59 15. QUION, ROEL A. 1 16 36.59 16. PANGANDOYON, JOSE D. 1 17 36.59 17. TITO, RUFILA G. 1 18 36.59 18. GUIMARE, LAILANE O. 1 19 36.59 19. NOTORIO, ADELITA C. 1 20 36.59 20. GALES, ROMULO A. 1 21 36.59 21. PATAWARA, ROQUEZA M. 1 22 36.59 22. ENTREVENCION, LIDENA C. 1 23 36.59 23. ESTRIBELLO, HENRY S. 1 24 36.59 24. FABIA, JOJO H. 1 25 36.59 25. NOTORIO, RICKY H. 1 26 36.59 26. ELIZAN, FERDINAND B. 1 27 36.59 27. GUTIERREZ, MIGUEL C. 1 28 36.59 28. GUTIERREZ, ERNESTO C. 1 29 36.59 29. CALIMOTAN, JULIUS C. 1 30 36.59 30. MONTANO, JOY ANNE D. 1 31 36.59 31. FUSTER, CHERRY B. 1 32 36.59 32. NUEVO, MA. FLOR G. 1 33 36.59 33. ENYONG, ARQUILES J. 1 34 36.59 34. CELLANO, ANNALYN B. 1 35 36.59 35. CELLANO, MA THERESA B. 1 36 36.59 36. TOLENTINO, JOAN ANGEL F. 1 37 36.59 37. TOLENTINO, JENNETH F. 1 38 36.59 38. CALDERON, ANOTONIO, Jr. M. 1 39 36.59 39. MONTANO, GLENDA B. 1 40 36.59 40. MONTANO, GLORIA B. 1 41 36.59 41. TAN, OLIVIA A. 2 1 36.59 42. ENSEADO, GILMORE S. 2 2 36.59 43. FIGURACION, TESSIE B. 2 3 36.59 44. SURIGAO, MYRNA B. 2 4 36.59 45. ELLOSO, JOHN L. 2 5 36.59 46. DESTURA, ERWIN D. 2 6 36.59 47. NAVALES, RENANTE B. 2 7 36.59 48. ABRENILLA, MARIANITO A. 2 8 36.59 49. BUBAN, SALVADOR R. 2 9 36.59 50. CAMANGEG, WILSON Q. 2 10 36.59 51. EVANGELIO, RAYMUNDO D. 2 11 36.59 52. EMBUSCADA, SARAH C. 2 12 36.59 53. GALUPO, ESPER V. 2 13 36.59 54. PIMENTEL, RICHARD P. 2 14 36.59 55. VENTAJAR, ALDE B. 2 17 36.59 56. BUSQUE, DIONISIO B. 2 18 36.59 57. BATANG, VERNIGIN A. 2 19 36.59 58. RAMOS, EDWARD R. 2 20 36.59 59. BAGASINA, ROSELYN P. 2 21 36.59 60. BUENDIA, DENNIS L. 2 22 36.59 61. NIEBRES, ARNOLD O. 2 23 36.59 62. SIRRAJOSE, ROSALI P. 2 24 36.59 63. SERAJOSE, BERNADETH P. 2 25 36.59 64. ELLIS, EDELINE B. 2 26 36.59 65. SINCHIOCE, JOANA MARIE B. 2 27 36.59 66. VERGIS, RICHARD C. 2 28 36.59 67. ANAY, ROSEMARIE M. 2 29 36.59 68. GICANA, EMELIANA D. 2 30 36.59 69. LIDRES, NEHEMIA D. 2 31 36.59 70. LUMACTAO, ANDREA D. 2 32 36.59 71. YNTAS, LORNA G. 2 33 36.59 72. TONGCO, NAPOLEON B. 2 34 36.59 73. RUFO, LUIS, Jr. C. 2 35 36.59 74. RUFO, RONALDO C. 2 36 36.59 75. TIA, DIZON, Jr. P. 2 37 36.59 76. TIA, MANUELITO P. 2 38 36.59 77. DOMINGO, VENUS D. 2 39 36.59 78. ORETA, JULIET V. 2 41 36.59 79. MARQUEZ, ARLENE R. 2 42 36.59 80. CASTILLO, EMILIA R. 2 43 51.23 81. GALICIA, MELCHOR T. 3 1 36.59 82. VASQUEZ, SANDY O. 3 1 36.59 83. BACUSA, JOEL S. 3 3 36.59 84. VILLANUEVA, RODEL O. 3 4 36.59 85. NAVARRO, RONELO M. 3 5 36.59 86. AMADHAY, RENE C. 3 6 36.59 87. DUMRIGUE, MARCELINA L. 3 7 36.59 88. LEYVA, ELMA G. 3 8 36.59 89. CATAMA, ROSALINDA N. 3 9 36.59 90. CATAMA, MARILYN N. 3 10 36.59 91. BALAGBES, LITA F. 3 11 36.59 92. BALMES, ARLENE M. 3 12 36.59 93. PORRAS, VINDY P. 3 13 36.59 94. PORRAS, VAN JOVIE P. 3 14 36.59 95. FLORES, MAY S. 3 15 36.59 96. REALUBIT, JOSELITO M. 3 16 36.59 97. RAMIREZ, VICTOR, Jr. D. 3 17 36.59 98. FORTES, MAX N. 3 18 36.59 99. NUEZ, LOURDES B. 3 19 36.59 100. ESMA, IRENEO L. 3 20 36.59 101. PLARIZAN, ALVIN D. 3 21 36.59 102. CARDENAS, FLORANTE D. 3 22 36.59 103. SABATE, LESME B. 3 23 36.59 104. MAKAERAP, PEDRO M. 3 24 36.59 105. ANDA, ZIA MARIE O. 3 25 36.59 106. PORNILLOS, KRISTOFFERSON R. 3 26 36.59 107. JANABAN, NORMAN B. 3 27 36.59 108. PALDO, BENITO B. 3 28 36.59 109. PALDO, MARY ANN B. 3 29 36.59 110. NAMILIT, LELIE JOY P. 3 30 36.59 111. VARIAS, RODEL C. 3 31 36.59 112. LACUROM, HILARIA L. 3 32 36.59 113. DIANA, ALEX L. 3 33 36.59 114. TOLENTINO, JULIE ANN F. 3 34 36.59 115. TOLENTINO, KATRINE MARGARET F. 3 35 36.59 116. LAMBINO, JONATHAN B. 3 36 36.59 117. TAMPOS, AIDA T. 3 37 36.59 118. PEALBER, DIONISIO, Jr. Q. 3 38 36.59 119. HISOLER, ROBEGOR A. 3 39 36.59 120. ALFECHE, ALBERT A. 3 40 36.59 121. ALFECHE, MILAGROS M. 3 41 36.59 122. DE RAMOS, ANGELINA L. 4 1 36.59 123. DE RAMOS, REYNALDO A. 4 2 36.59 124. CABILANGAN, MARINA C. 4 3 36.59 125. FERNANDO, JAYSON B. 4 4 36.59 126. FERNANDO, KRISTOFFER B. 4 5 36.59 127. SAN PEDRO, CELINA S. 4 6 36.59 128. PORLARES, REMEDIOS 4 7 36.59 129. PORLARES, MARIA LEAH A. 4 8 36.59 130. CANTRE, REMIA D. 4 9 36.59 131. HERNA, LEJANI C. 4 10 36.59 132. PAGUEL, JOY V. 4 11 36.59 133. PAGUEL, ACE V. 4 12 36.59 134. JAMIAS, ALMA N. 4 13 36.59 135. CAO, SYLVIA A. 4 14 36.59 136. ALARCIO, KRISTINE JOY B. 4 15 36.59 137. ALARCIO, MARICRIS B. 4 16 36.59 138. WANGWANG, GENEVIEVE P. 4 17 36.59 139. BOMBALES, ALEX A. 4 18 36.59 140. OLID, SATURNINO R. 4 19 36.59 141. PILAPIL, RUEL C. 4 20 36.59 142. BORRERO, REYMUNDO B. 4 21 36.59 143. SAPRA, GEMMA G. 4 22 36.59 144. GUTEZA, ORLY R. 4 23 36.59 145. GARLAN, JANICE MAE B. 4 24 36.59 146. ESTUBIO, MARY ANN V. 4 25 36.59 147. JERESANO, CORAZON P. 4 26 36.59 148. BACCAY, JENNIFER M. 4 27 36.59 149. BACCAY, ROVIE M. 4 28 36.59 150. SERAJOSE, JENNETH P. 4 29 36.59 151. ESPEJON, ROWENA P. 4 35 36 59 152. UNGRIANO, MARILOU B. 4 36 36.59 153. UNGRIANO, ANGEL B. 4 37 36.59 154. BEGINO, CHARLIE M. 4 38 36.59 155. DE JESUS, MARIA ROSARIO B. 4 39 36.59 156. DE JESUS, MARCO B. 4 40 36.59 157. CHAVEZ, HERMINIO C. 4 41 36.59 158. AGRIPINO, ALFEREZ, Jr. B. 4 42 36.59 159. MARINO, VEVENCIO B. 4 43 36.59 160. FLORES, VICTOR P. 4 44 36.59 Footnotes 1. see Annex for the masterlist of qualified beneficiaries.