National Housing Authority

June 19, 2009 BIR RULING [SH-(052) 382-09] S20-030-06 National Housing Authority 3rd Floor Unit 5 Nationwide Appliance Center Building Veterans Avenue, Zamboanga City Attention: Mr. Reynaldo H. Bolay-Og District Team Head Gentlemen : This refers to your letter dated March 6, 2009, which was referred to this Office by Revenue Region No. 15, Zamboanga City, by way of 2nd Indorsement dated April 13, 2009, requesting on behalf of the landowners, TERESITA D. TAN, SUSAN D. TAN, ORLANDO D. TAN, JESUS D. TAN, JR., MARY D. TAN and EVELYN D. TAN, for a ruling that the sale of their parcel of land to the National Housing Authority (NHA) for its socialized housing program for the benefit of the residents of Liloy, Zamboanga del Norte, is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19, 20 and 32 of Republic Act (R.A.) No. 7279, otherwise known as the "Urban Development and Housing Act of 1992". It appears that the landowners are the registered owners of a parcel of land located at Barangay Baybay, Liloy, Zamboanga del Norte covered by TCT No. T-66501 issued by the Registry of Deeds for the Province of Zamboanga del Norte with an aggregate area of 24,717 square meters; that on February 17, 2009, a Deed of Absolute Sale was executed by the above-named landowners in favor of the NHA whereby NHA has committed to purchase the above said properties in favor of marginal income families; NHA as the sole housing production agency to meet the housing needs of the low and marginal income families in the urban areas, has developed an alternative mode of providing land tenure and access to illegal settlements, where organized communities of low income families are provided financial resources for the purpose of acquiring the land they occupy; and that per Board Resolution No. 4995 dated September 6, 2006, the NHA is authorized to negotiate, enter into a settlement agreement with and eventually pay just compensation to the landowners. In reply thereto, please be informed that pursuant to Sections 19, 20 and 32 of R.A. No. 7279, pertinent portions of which read: SDAaTC "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 contacts 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 the transfer certificates of title. (emphasis supplied) "Sec. 20. Incentives for Private Sector Participating in Socialized Housing. To encourage greater 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: (1) Project-related income taxes; (2) Capital gains tax on raw land 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 xxx xxx xxx the conveyance to the NHA by the landowners of the above-mentioned parcel of land under the socialized housing program is exempt from the payment of capital gains tax and documentary stamp tax pursuant to Sections 19 and 20 of R.A. No. 7279. Upon issuance of this letter of exemption, and upon registration of the documents of sale, a lien on the Certificates of Title of the said parcel of land, which shall be issued in the name of the NHA, shall be caused to be annotated by the Register of Deeds having jurisdiction over the properties to the effect that the said properties shall be used for socialized housing pursuant to R.A. No. 7279. (BIR Ruling No. DA102-98 dated June 22, 1998) cEDIAa 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.) JAMES H. ROLDAN Assistant Commissioner Legal Service