Ms. Nicanora J. Castro

February 6, 2009 BIR RULING [SH-(006) 076-09] RA 7279; S-02-042-2008 Ms. Nicanora J. Castro 29 Capillan St. San Francisco del Monte Quezon City Madam : This refers to your letter dated January 23, 2009 requesting in effect, for an exemption from taxes pursuant to the provisions of Republic Act (RA) No. 7279, otherwise known as the Urban Development and Housing Act of 1992. It appears that Ms. Nicanora J. Castro is an awardee of a parcel of land from the National Housing Authority (NHA) particularly Lot 8, Block 51, Pcs-8258 located at Madrigal Estate ZIP Project, Quezon City and covered by Transfer Certificate of Title (TCT) No. N-149217. In support of your request, you submitted to this Office a Certification issued by the NHA dated July 9, 2008 that the above-named property is a low-cost housing project. In reply, please be informed that: "Sec. 19. Incentives for the National Housing Authority. The National Housing Authority, being the primary government agency in charge of providing housing for the underprivileged and homeless, shall be exempted from the payment of all fees and charges of any kind, whether local or national, such as income and realty taxes. All documents or contracts executed by and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and registration fees, including fees required for the issuance of transfer certificates of title." Under the foregoing provisions, NHA enjoys exemption from all forms of taxation. Thus, at the time of the sale of the above-stated property, NHA was not liable to pay any kind of taxes, fees and charges. Section 19 of RA 7279, gives incentives to the NHA, as the entity tasked by the National Government to carry out the purposes of RA 7279, in the form of exemptions from the payment of all national taxes, such as income tax and the corresponding creditable withholding tax or the capital gains tax, including exemptions from documentary stamp taxes upon documents or contracts executed by and in favor of the NHA. (BIR Ruling No. 071-98 dated May 25, 1998). DICcTa In view of the foregoing, NHA is exempt from the payment of creditable withholding tax imposed under Section 57 (B) of the Tax Code of 1997, as implemented by Section 2.57.2 (J) of Revenue Regulations No. 2-98, as amended or capital gains tax under Section 27 (D) (5) of the Tax Code of 1997, on its sale of the afore-mentioned property. NHA, is likewise is exempt from the payment of the documentary stamp tax imposed under Section 196 of the Tax Code of 1997, as amended. It is to be noted that under RMC 42-2001 dated October 5, 2001, the exemption from documentary stamp tax of NHA in connection with any of its socialized housing project extends to the other party (either seller or buyer) that deals or transacts with the NHA. Consequently, you being the buyer thereof, shall also be exempted from the payment of documentary stamp tax under Section 196 of the same Tax Code, as amended. (BIR Ruling No. S-20-042-2008 dated June 25, 2008) 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service