Office of the Sangguniang Bayan

April 1, 2009 BIR RULING [SH-(028) 248-09] Office of the Sangguniang Bayan Cuenca, Batangas Attention: Hon. Celerino A. Endaya Municipal Mayor Gentlemen : This refers to your letter as indorsed by the Regional Director, Revenue Region No. 9, San Pablo City, requesting in effect, for exemption from taxes pursuant to the provisions of Republic Act (RA) No. 7279 or the "Urban Development and Housing Act of 1992". Documents submitted show that the Municipal Government of Cuenca, Batangas with Tax Identification No. (TIN) 002-559-127, is the registered owner of a property covered by Transfer Certificate of Title (TCT) No. T-55492 containing an area of 23,831 sq.m. located at BLISS Poblacion 7, Cuenca, Batangas. The Municipality of Cuenca in its instance and thru a Resolution of its Sangguniang Bayan donated the aforestated parcel of land to 84 qualified beneficial occupants of Cuenca Housing Project who are likewise members of Cuenca Housing Neighborhood Association, Inc. (CHNAI). A Deed of Donation dated June 27, 2008 was executed by and among the Municipal Government of Cuenca, Batangas and said beneficiaries, whereby the former transfers the property and the member-beneficiaries agreed to subdivide and adjudicate the same among themselves. In reply, please be informed that Section 20 of RA No. 7279, reads: "Sec. 20. . . . 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: 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 to socialized housing purposes; The Municipal Government of Cuenca, Batangas is exempt from the payment of donor's tax on the conveyance of the said properties for use in the aforestated socialized housing project. Upon application for exemption, a lien on the title of the land shall be annotated by the Register of Deeds having jurisdiction over the properties, to the effect that the same is to be applied or is being applied to socialized housing project pursuant to RA No. 7279. IDcAHT It is to be noted that since the Municipal Government of Cuenca is performing a mandated governmental function of providing a decent shelter to the underprivileged and homeless citizens of its locality, and thus, raising the common people's atmosphere of pleasant well-being under Art. XIII, Sec. 9 of the 1987 Constitution, then its transfer to the 84 qualified beneficial occupants of Cuenca Housing Project of the subject property should much more be exempt from the payment of donor's tax. Likewise, since the conveyance of the aforesaid lot to the beneficiaries is without monetary consideration the same is not subject to documentary stamp tax imposed under Sec. 196 of the same Tax Code, as amended. (BIR Ruling No. DA-192-2003 dated June 19, 2003) 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