Bria Homes, Inc.

June 2, 2022 BIR RULING NO. OT-279-2022 Sections 6 (E) and 24 (D) (1) of the Tax Code of 1997, as amended; Department Order No. 058-18; BIR Ruling No. 041-2001 Bria Homes, Inc. Lower Ground Floor Evia Lifestyle Center Daang Hari, Almanza Dos Las Pias City Attention: AAA _______________ Gentlemen : This refers to your request on behalf of Bria Homes, Inc. (the "Company") for clarification as to the applicable zonal values on certain real properties pursuant to the Department of Finance Order No. 058-2018 which became effective on December 14, 2018. It is represented that the Company made purchases of Eight (8) parcels of land (the "Subject Properties") located in Brgy. Tipacan, Lipa City, Batangas on several dates from September 12, 2018 to January 11, 2020 from several individual landowners who are not engaged in real estate selling or leasing activities, to wit: Sellers Lot No. TCT No. Tax Dec. No. Class/Area in Square Meters Agreement to Purchase and Sell (ATPS) Date Heirs of Spouses BBB & CCC Lot 11316 072-2019005979 131-03-073-009-017 Agricultural 10,242 Feb. 8, 2019 Lot 11317 072-2019005980 131-03-073-009-017 Agricultural 6,897 Heirs of Spouses DDD & EEE Lot 12180 072-2019005160 131-03-073-008-005 Residential 28,219 Sept. 12, 2018 Lot 11315 072-2019005159 131-03-073-009-019 Agricultural 17,214 Lot 12182-C 072-2019005161 131-03-073-009-008 Agricultural 17,917 Heirs of Spouses FFF and GGG Lot 12181-A 072-202000869 131-03-073-009-032 Agricultural 1,410 Feb. 22, 2019 Heirs of Spouses HHH and III Lot 11318 072-2019002332 131-03-073-009-007 Residential 400 Agricultural 11,604 Dec. 28, 2018 JJJ Lot 12182-B-1 T-100852 131-03-073-009-005 Agricultural 10,000 Jan. 10, 2020 It must be noted that all the above lots are covered by separate Tax Declarations and most lots are classified as "Agricultural," except for Lot 12180 with an area of 28,219 square meters and portion of Lot 11318 to the extent of 400 square meters, which are already classified as "Residential" as of the acquisition date. Furthermore, the DO No. 058-2018 provides for the following table of zonal values for real properties located in Brgy. Tipacan, Lipa City: BARANGAY TIPACAN ALL LOTS ALONG BRGY ROAD ** (NEW) CLASSIFICATION 4th REVISION ZV/SQ. M. CR 5,000.00 I 4,750.00 RR 1,200.00 GP 600.00 A50 250.00 INTERIOR RR 800.00 A50 200.00 ** PREVIOUSLY IDENTIFIED AS TANGOB, SAN JOSE, LATAG, ANTIPOLO DEL SUR, PINAGKAWITAN, STO. TORIBIO, SAN BENITO In view of the foregoing, you now request for confirmation that in computing the capital gains tax (CGT) and the documentary stamp tax (DST) due on the sale transaction between the landowners and the Company, the tax base shall be whichever is higher between/among the: (a) Selling Price as stated in the sale document executed by the parties; (b) Fair Market Value based on the latest Tax Declaration covering the properties; or (c) Zonal values as agricultural or residential, as the case may be, based on the classification of the lots per latest Tax Declarations. In reply, please be informed that Department of Finance Order (D.O.) No. 058-18 provides that the zonal values established within the jurisdiction of Revenue District Office (RDO) No. 59-Lipa City, East Batangas, pursuant to Section 6 (E) of the National Internal Revenue Code (Tax Code) of 1997, as amended, shall apply for purposes of computing any internal revenue tax due on sale/transfer or any other disposition of real properties, provided that said zonal values is higher than the: (1) fair market value as shown in the schedule of values of the provincial or city assessor; and (2) gross selling price/consideration as shown in the duly notarized document of sale or transfer of real property. In this case, the classification and valuation of the properties located in Barangay Tipacan, Lipa City have already been determined and established under D.O. No. 058-18, supra . The properties located in Barangay Tipacan had already been classified as commercial, industrial, general purpose, agricultural and residential. Commercial properties are valued at P5,000.00 per square meter, industrial properties are valued at P4,750.00 per square meter, residential properties are valued at P1,200.00 and 800.00 per square meter, general purpose properties are valued at P600.00 per square meter and agricultural properties are valued at P250.00 and P200.00 per square meter. Considering that the Subject Properties have the corresponding classification and fair market values determined by the provincial or city assessor and established fair market values or zonal values determined by the Commissioner of Internal Revenue pursuant to Section 6 (E) of the Tax Code of 1997, as amended, this Office hereby confirms your opinion that for purposes of computing the CGT and DST due on the sale transaction between the landowners and the Company, the tax base shall be whichever is higher among the: (a) Selling Price as stated in the sale document executed by the parties; (b) Fair Market Value based on the latest Tax Declaration covering the properties; or (c) Zonal values as agricultural or residential, as the case may be, based on the classification of the lots as shown per latest Tax Declarations. 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.) CAESAR R. DULAY Commissioner of Internal Revenue