BIR Ruling No. 474-13

December 18, 2013 BIR RULING NO. 474-13 RA No. 7279; BIR Ruling No. 005-11; BIR Ruling No. 367-11; BIR Ruling No. 150-11; BIR Ruling No. 030-12 Ayuti Homeowners Association, Inc. Ahai Site, Brgy. Ayuti Lucban, Quezon Attention: Marilou R. Page Director Gentlemen : This refers to your letter dated February 2, 2012 requesting for an exemption from the payment of capital gains tax and other taxes, if any relative to the transfer of title of land from Ayuti Homeowners Association, Inc. (AHAI) in favor of its qualified member-beneficiaries 1 pursuant to Republic Act 7279 otherwise known as the "Urban Development and Housing Act of 1992". It is represented that Ayuti Homeowners Association, Inc.,a non-stock, non-profit organization duly registered with the Housing and Land Use Regulatory Board (HLURB) with Taxpayer's Identification No. 005-829-979-000, is the registered co-owner of a parcel of land, identified as Lot No. 2568, CAD-340-D covered by Transfer Certificate of Title (TCT) No. T-516237 issued by the Registry of Deeds for the Province of Quezon. The aforesaid property is situated at Brgy. Ayuti, Lucban, Quezon with an area of forty one thousand seven hundred sixty eight (41,768) sq.m.;and that the AHAI is now in the process of subdividing the purchased property to its member beneficiaries in accordance with the HLURB-certified masterlist of qualified beneficiaries. Moreover, pursuant to a certification issued by National Housing Authority, the abovementioned purchase of property is under the Community Land Acquisition Support Program (CLASP) of the National Housing Authority and classified under the Socialized Housing Program of the Government. In support of its request, Ayuti Homeowners Association, Inc. has completely submitted on November 29, 2013 the following documents: EADSIa 1) Written Application for Exemption filed with the Law Division; 2) Certified True Copy of the Transfer Certificate of Title (TCT); 3) Certified True Copy of the Tax Declaration; 4) Certification from National Housing Authority (NHA) that the property was acquired through Community Land Acquisition Support Program (CLASP); 5) Certified true copy of the Certificate of Registration of the Homeowner Association; 6) Certified true copy of the Master list of qualified beneficiaries duly received by the HLURB; 7) Copy of the "Bilihang Lubusan ng Lupa"; 8) Subdivision Plan; and 9) BIR Certificate of Registration of the Homeowner Association. In reply, please be informed that the transfer in favor of your individual member-beneficiaries of the said subdivided property is not subject to either the capital gains tax imposed under Section 27 (D) (5) of the Tax Code of 1997, as amended, or the creditable withholding tax imposed under Revenue Regulations No. 2-98, as amended, implementing Section 57 (B) of the same Code, considering that the said transfer of property is without any consideration since it is merely a formality to finally effect the transfer of the said property to its qualified member-beneficiaries who actually bought the same from the former owner through your Association. In other words, the association is in fact transferring the ownership of the property to its member-beneficiaries who actually own the same. Furthermore, the said transfer is not subject to the donor's tax imposed under Section 99 of the Tax Code of 1997, since there is no donative intent or intention on your part to donate the said property to said member-beneficiaries, considering that you could not donate property the ownership of which belong to the donees (member-beneficiaries) themselves. (BIR Ruling No. 005-11 dated January 19, 2011 and BIR Ruling No. 367-11 dated October 5, 2011) It is noted that under Section 196 of the Tax Code of 1997, the deeds or documents subject to the documentary stamp tax imposed therein are those where the realty sold shall be granted, assigned, transferred, or otherwise conveyed to a purchaser or purchasers or to any other person or persons designated by such purchaser or purchasers, thereby excluding from its purview the instant case considering that the supposed purchasers are actually the owners thereof. Besides, no consideration is involved in said transaction upon which the tax imposed could be based. Accordingly, the transfer of title of the said property in favor of your member-beneficiaries is not subject to the documentary stamp tax imposed under Section 196 of the Tax Code of 1997. However, the notarial acknowledgment to said deed of conveyance is subject to the documentary stamp tax of P15.00 pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. 005-11 dated January 19, 2011 and BIR Ruling No. 367-11 dated October 5, 2011) AaDSEC It is, however, understood that the Certificate Authorizing Registration (CAR) shall only be issued after it is established upon proper verification by the Revenue District Officer (RDO) concerned that, considering the rules on valuation of real property, the selling price per sale transaction for each qualified beneficiary does not exceed the price ceiling of P400,000.00 for house and lot packages and P160,000.00 for lots only, pursuant to Revenue Regulations No. 17-2001. (BIR Ruling No. 150-11 dated May 17, 2011 and BIR Ruling No. 030-12 dated January 16, 2012) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue ANNEX Ayuti Homeowners Association, Inc. Ahai Site, Brgy. Ayuti Lucban, Quezon Blk. Lot Total Area Name of Beneficiary No. No. (sq.m.) 1 Sps. Adelaida & Ferrer Fraginal & Sps. Arnel & Judith Cada 1 1 90 2 Marienell N. Obnamia 1 2 118 3 Sps. Grace & Irvin Dichoso 2 1 105 4 Hischelle Deapera Ladines 2 2 72 5 Sps. Florita & Godofredo Jr. Racelis 2 3 72 6 Marinel A. Delas Alas 2 4 72 7 Sps. Dennis & Clariza A. Salivia 2 5 72 8 Sps. Femmina Rochelle & Jefferson Aldwin Faller 2 6 72 9 Sps. Julian & Melitona Nombrefia 2 7 72 10 Sps. Felimon & Mirasol Enriquez 2 8 72 11 Sps. Alejandro Zandro & Lailani Omlas 2 9 72 12 Sps. Rizalina & Emmanuel Lalunio 2 10 72 13 Sps. Ethel & Rene Ross Jasa 2 11 72 14 Sps. Angelina & Henio Nanong 2 12 72 15 Sps. Bonifacio & Soledad Nabos 2 13 72 16 Sps. Soledad & Bonifacio Nabos 2 14 98 17 Marilou R. Page 3 1 114 18 Presentacion R. Escudero 3 2 105 19 Sps. Rowena & Tirso Cada 3 3 80 20 Sps. Vanessa & Ronald Pineda 3 4 80 21 Benildo A. Elloso 3 5 80 22 Lina Salayong Emata 3 6 80 23 Sps. Fernando & Elizabeth Seo 3 7 80 24 Sps. Elizabeth & Fernando Seo 3 8 80 25 Sps. Marisa & Louie Bariuan 3 9 80 26 Maria Myla Cada Ellazar 3 10 80 27 Sps. Freddie & Ma. Tretzel Samarita 3 11 80 28 Ralph Patrick Elento 3 12 80 29 Gliceria O. Pavino 3 13 80 30 Sps. Jennylyn & Wilfredo Jr. Morante 3 14 80 31 Sps. Floro & Margarita Malihan 3 15 80 32 Melissa Babista Malihan 3 16 80 33 Sps. Johnacel & Marittess Elpa 3 17 80 34 Donato Racasa Babista 3 18 84 35 Sps. Thelma & Felimon Pamis 3 19 102 36 Sps. Larry Joseph A. Salvania & Kristine V. Salvania 3 20 127 37 Ricardo Abuel & Noriel Santos 3 21 80 38 Sps. Edwin & Lourdes Mancenido 3 22 80 39 Sps. Marisel & Joaquin Cademia 3 23 80 40 Aristeo S. Rodanilla 3 24 80 41 Sps. Rolando & Raquel Esperanza 3 25 80 42 Maria Jennifer Togono Cosejo 3 26 80 43 Tito Togono Cosejo Jr. 3 27 85 44 Maria Jane Togono Cosejo 3 28 97 45 Sps. Tito & Eugenia Cosejo 3 29 127 46 Leah Flor C. Abuel 4 1 78 47 Loy George Romero 4 2 79 48 Hobart Sagunde Cada 4 3 104 49 Sps. Eusebio & Florenia Gaelon 4 4 94 50 Sps. Jefferson Aldwin & Femmina Rochelle Faller 5 1 87 51 Sps. Luisito & Agripina Salvanera 5 2 89 52 Sps. Sherwin & Raquel Cabalquinto 5 3 112 53 Sps. Jasmin & Vilmor Flores 5 4 116 54 Ahai-Community Facilities 5 5 441 55 Sps. John & Mergielene Esperanza 6 1 102 56 Sps. John & Mergielene Esperanza 6 2 109 57 Sps. Tommy Eufemius & Sonia Abustan 6 3 100 58 Mario Oabel Eleazar 6 4 100 59 Sps. Susan & Leon Ursua 6 5 100 60 Sps. Ivy Lorraine & Carmelo Quevedo 6 6 100 61 Melvin Cada Placino 6 7 100 62 Sps. Rodel & Marifel Cada 6 8 100 63 Sps. Ernesto & Hazel Dalmacion 6 9 100 64 Sps. Hazel & Ernesto Dalmacion 6 10 100 65 Ma. Adagail G. Obciana 6 11 100 66 Menilda Deapera Sales 6 12 100 67 Sps. Magdalena & Felimon Oblefias 6 13 100 68 Sps. Manuel & Estrella Deveza 6 14 100 69 Sps. Rosalino & Luzviminda De Galicia 6 15 100 70 Sps. Luzviminda & Rosalino De Galicia 6 16 100 71 Emiliana Sy Casio 6 17 100 72 Sps. Shirley & Albert Abaricia 6 18 100 73 Sps. Wilfredo & Vanessa Dayapan 6 19 100 74 Sps. Jason & Perfecta Laguador 6 20 100 75 Sps. Mergielene & John Esperanza 6 21 100 76 Sps. Perfecta & Jason Laguador 6 22 100 77 Sps. Arsenia & Francisco Abuel 6 23 100 78 Rosemarie Vergara Rodanilla 6 24 100 79 Jose Mari R. Deleon 6 25 100 80 Sps. Jenelyn & Ronald Maclang 6 26 100 81 Sps. Gertrudes & Lorenzo De Leon & Sps. Benigno & Honorata Placino 6 27 100 82 Jay-R Zubieta & Sps. Mirian & Rosendo Manrique 6 28 100 83 Sps. Teresita & Tadeo Teodoro Sales 6 29 100 84 Marilou Saludes Salvatierra 6 30 100 85 Sps. Teresita & Tadeo Teodoro Sales 6 31 100 86 Sps. Violeta & Leonardo Dator 6 32 100 87 Sps. Gaylord & Arlene Polintan 6 33 100 88 Sps. Emmalou & Dennis Flores & Ethel & Percival Esperanza 6 34 100 89 Sps. Felipe Jr. & Ruth Castor 6 35 100 90 Sps. Elmidora & Charlito Obleada & Sps. Estrella & Antonio Oblefias 6 36 100 91 Masahiro C. De Guzman 6 37 97 92 Sps. Benedict & Carlota Orajay 7 1 82 93 Marife Sales Obnamia 7 2 76 94 Victoria Eleazar Palenzuela 7 3 80 95 Marife Sales Obnamia 7 4 77 96 Sps. Wenceslao & Ma. Encarnacion Durante 7 5 80 97 Menchie Policena Fontanilla 7 6 80 98 Sps. Rosana & Fernando Elpa 7 7 80 99 Sps. Rodman Emmanuel & Shiela Tan 7 8 80 100 Sps. Clemencia & Luisito Valle 7 9 80 101 Sps. Antonio & Liberace Faller & Jefferson Faller 7 10 80 102 Sps. Walter & Editha Balmeo 7 11 80 103 Sps. Reynaldo & Analiza Zurbano 7 12 80 104 Ronaldo V. Altovar 7 13 80 105 Sps. Mirasol & Hopene Jerez 7 14 80 106 Sps. Percival & Analynn Babista 7 15 80 107 Sps. Sonny & Leanibelle Saludares 7 16 80 108 Sps. Dennis & Ma. Lourdes Altamira 7 17 80 109 Sps. Ma. Lourdes & Dennis Altamira 7 18 80 110 William Cavida Santos 7 19 80 111 Sps. Jouvenal & Diana Abulad 7 20 80 112 Sps. Charina & Delfin Gregana 7 21 80 113 Sps. Rodrigo & Lynn Carganilla 7 22 80 114 Sps. Angelo & Flora Arquiza 7 23 80 115 Sps. Benny & Layden Orajay 7 24 80 116 Vitaliano O. Suario & Zoilo L. Suario 7 25 80 117 Sps. Milberto & Priscila Lobe 7 26 80 118 Sps. Richel & Jorge Dalogdog 7 27 80 119 Sps. Jose Carlo & Dahlia Manalo 7 28 80 120 Rolly N. Gasino & Rolando N. Gasino 7 29 80 121 Eufemia & Luisito Salamat 7 30 80 122 Sps. Myra & Francis Elento 7 31 80 123 Sps. Francis & Myra Elento 7 32 80 124 Sps. Cris & Maribel Tagle & Sps. Mirza & Vensil Sales 7 33 80 125 Sps. Welthon Denmark & Jacqueline Abcede 7 34 80 126 Sps. Rozelino & Sofia Esperanza 7 35 80 127 Sps. Wilner & Elanie Abcede 7 36 80 128 Sps. Liza & Wilberto Villaverde 7 37 80 129 Clarissa D. Ombajino 7 38 80 130 Sps. Wilberto & Liza Villaverde 7 39 80 131 Jerryfile Racoma Alivio 7 40 80 132 Sps. Margie & Manuel Obmerga 7 41 80 133 Sps. Isidro & Maricel D. Villamater 7 42 80 134 Sps. Manuel & Margie Obmerga 7 43 80 135 Sps. Felix Jr. & Sheena Nanca 7 44 80 136 Sps. Percival & Honeylou Fontanilla 7 45 88 137 Sps. Richard & Evangeline Villamater 8 1 84 138 Sps. Ronaldo & Ellen Villon & Sps. 8 2 80 Jennifer & Ronaldo Oblea 139 Sps. Narciso & Dolores Nada 8 3 77 140 Ranzell, Villon Lodriga 8 4 80 141 Sps. Gemyl & Lovella Borines 8 5 80 142 Sps. Maribel & Cenon Jr. Pitao 8 6 80 143 Sps. Cenon Jr. & Maribel Pitao 8 7 80 144 Sps. Marsha & Aldrin Alpay 8 8 80 145 Sps. Charlie & Gina Beltran 8 9 80 146 Paulino O. Beltran 8 10 80 147 Sps. Paulo & Ferica Aloner & Sps. Roman & Mary Grace Aloner 8 11 80 148 Sps. Bryan & Maria Carmela Empamano 8 12 80 149 Sps. Ronelo & Anna Marie Lavia 8 13 80 150 Conchita Deri Margate 8 14 80 151 Cornelio Peaojas Lavia Jr. 8 15 80 152 Sps. Brenda & Lito Peamante 8 16 80 153 Sps. Lorna & Reagan Zuela 8 17 80 154 Sps. Maricel & Generoso Oblea 8 18 80 155 Sps. Armelyn & Bernardito Laqueo 8 19 80 156 Sps. Conrado & Delia Jardin 8 20 80 157 Lea Cadelia Jardin 8 21 80 158 Grace Badilla 8 22 91 159 Sps. Richard & Florencia Bojelador 9 1 81 160 Sps. Gregorio & Victoria Libon 9 2 80 161 Sps. Jesusimo & Gertrudes Tiongco 9 3 82 162 Sps. Bernardo & Perlina Cada 9 4 126 163 Sps. Susan & Daniel Eduardo Veluz 9 5 94 164 Sps. Daniel Eduardo & Susan Veluz 9 6 80 165 Josiebeth Elpa & Sps. Maribel & Darwin Maestro 9 7 80 166 Jose N. Racelis Jr. 9 8 80 167 Getulyo Roasa 9 9 103 168 Amee Encarnacion 10 1 78 169 Amee Encarnacion 10 2 75 170 Tristan Bayani 10 3 84 171 Tristan Bayani 10 4 88 172 Signorina Kaehler 10 5 84 173 Signorina Kaehler 10 6 88 174 Wilhelmina Bayani 10 7 77 175 Wilhelmina Bayani 10 8 80 176 Sps. Ma. Elizabeth & Mario Villanera 11 1 91 177 Sps. Victor & Zenaida Peraz 11 2 114 178 Sps. Ramon & Melba Gaela 11 3 80 179 Sps. Michael & Precilla Joan Ladines 11 4 80 180 Sps. Nemecia & Daniel Laqueo 11 5 80 181 Sps. Ric & Anatalia Quesea 11 6 80 182 Sps. Nelson M. Ayala & Maribel A. Enriquez 11 7 80 183 Sps. Marialina & Marciano Sulit 11 8 80 184 Jaime Aveno Castro 11 9 80 185 Sps. Nestor Narciso & Maricel Dayapan 11 10 80 186 Sps. Emma & Ronaldo Reyes 11 11 80 187 Luisita Baldovino 11 12 80 188 Roberto Deveza Eleazar 11 13 80 189 Sps. Ricardo & Memelanie De Vargas 11 14 80 190 Sps. Rolly & Lolita Remoroza 11 15 80 191 Sps. Emelio & Lucila Manalo 11 16 80 192 Sps. Henio & Angelina Nanong 11 17 80 193 Sps. Lucila & Emelio Manalo 11 18 80 194 Sps. Ariel & Evalor Teope 11 19 80 195 Sps. Emelio & Lucila Manalo 11 20 80 196 Sps. Arnolfo & Marife Obnamia 11 21 80 197 Anatolia Oblena 11 22 80 198 Sps. Ruel & Rhoda Cabrera 11 23 80 199 Josefina Rodriguez Aguilan 11 24 80 200 Sps. Nila & Teodoro Dajao 11 25 80 201 Josefina Rodriguez Aguilan 11 26 80 202 Corazon R. Salvania & Sps. Ellen & Mario Racelis 11 27 80 203 Sps. Virgilio Jr. & Irene Flores 11 28 80 204 Sps. Maribeth & Jean Reboton 11 29 80 205 Sps. Felipe Jr. & Ruth Castor 11 30 80 206 Sps. Jenie & Allan Macafe 11 31 80 207 Sps. Felipe Jr. & Ruth Castor 11 32 80 208 Sps. Hilario & Luzvelinda Laguardia 11 33 97 209 Sps. Felipe Jr. & Ruth Castor 11 34 88 210 Ian-Roy V. Abaricia 12 1 85 211 Sps. Agnes & Norde Fegidero 12 2 81 212 Ian-Roy V. Abaricia 12 3 80 213 Sps. Norde & Agnes Fegidero 12 4 80 214 Sps. Racquel & Jerry Racoma & Ma. Crystaline T. Semondac 12 5 80 215 Ramil Moleo Reodica 12 6 80 216 Sps. Baby Jean & Joseph Nicol & Sps. Ricardo & Roselyn Jardin 12 7 80 217 Gracia Ello Espinosa 12 8 80 218 Nanette & Ramsel Veluz 12 9 80 219 Gracia Ello Espinosa 12 10 80 220 Jun V. Nantes & Dalisay Veluya 12 11 80 221 Sps. Emma Belinda & Noel Macale & Sps. Sally & Philip Abcede 12 12 80 222 Eugene Gaela Obispo 12 13 80 223 Cristina Casino Abuel 12 14 80 224 Jovita E. Noche 12 15 80 225 Ellaine R. Oblefias 12 16 80 226 Sps. Cristita & Isidro Walfredo Dayo 12 17 80 227 Ellaine R. Oblefias 12 18 80 228 Rosita Avila & Anita Pavino 12 19 80 229 Maria Candelaria Pornasdoro 12 20 80 230 Spring Joy & Theresa Veluz 12 21 80 231 Nancy Racasa Babista 12 22 80 232 Bryan Jay T. Abrillo & Bea Jackilynne V. Abrillo 12 23 105 233 Concepcion Racasa Babista 12 24 97 234 Sps. Emilio & Joselyn Unlayao 13 1 97 235 Sps. Ramon & Margarita Quiling 13 2 80 236 Sps. Ramon & Margarita Quiling 13 3 80 237 Denise Anne S. Veluz 13 4 80 238 Maria Corazon S. Veluz 13 5 80 239 Sps. Bernard & Julie Bungalon 13 6 80 240 Tina Carpina De Guzman 13 7 80 241 Nazareth Gabriel C. De Guzman 13 8 80 242 Marie Grace De Guzman 13 9 80 243 Myra A. Mateo 13 10 80 244 Myra A. Mateo 13 11 88 245 Sps. German Fabro III & Czarina Fabro 13 12 80 246 Sps. German Fabro III & Czarina Fabro 13 13 80 247 Rufino Arosa Baldovino 14 1 112 248 Sps. Enrique & Mary Villarica Baldovino 14 2 126 249 Ahai-Parks and Playground 15 1 1673 250 Daniel Oliver Saludares Veluz 15 2 107 251 Daniel Albert Saludares Veluz 15 3 80 252 Sps. Bernardo & Veronica Jasul 15 4 88 253 Jose Nombrefia 16 1 97 254 Sps. Sonia & Froilan Lumba & Sps. Frelie & Janet Aureada 16 2 88 255 Sps. Albino & Leona Absulio 16 3 91 256 Sps. Sonny & May Ombajino 16 4 98 257 Sps. Leceria & Reagan Barbasa 16 5 114 258 Sps. Francisco & Ester Deapera 16 6 106 259 Sps. Francisco & Ester Deapera 16 7 125 260 Sps. Francisco & Ester Deapera 16 8 98 261 Sps. Ester & Francisco Deapera 16 9 83 262 Marites Batrina Paas 16 10 80 263 Sps. Melita & Joseph Maejan 16 11 80 264 Sps. Dolor & Edwin De Mesa 16 12 80 265 Sps. Edwin & Dolor De Mesa 16 13 82 266 Ahai-Easement 189 267 Block 17 Excluded Portion 3163 268 Block 18 Excluded Portion 2063 269 Road Lot 1 1263 270 Road Lot 2 2213 271 Road Lot 3 555 272 Road Lot 4 1196 273 Road Lot 5 1440 274 Road Lot 6 473 275 Road Lot 7 933 276 Road Lot 8 1111 277 Road Lot 9 778 278 Road Lot 10 495 279 Road Lot 11 1096 280 Ahai-Alley 30 Footnotes 1. See annex (included are the roads, alleys and easement).