Hausplus Ventures, Inc.

November 24, 2009 BIR RULING [SH-(117) 732-09] RA 7279; RMC 42-01; S20-029-06 Hausplus Ventures, Inc. Suite 1007 Annapolis Wilshire Plaza No. 11 Annapolis St., Greenhills, San Juan Attention: Mr. Johnson D. Lim Gentlemen : This refers to your letter dated November 16, 2009 requesting a ruling exempting the sale of real properties by Gaudencio M. Diaz in favor of Hausplus Ventures, Inc. ("HVI") from the payment of capital gains tax (CGT)/income tax/creditable withholding tax (CWT)/ and value-added tax (VAT), in accordance with Revenue Memorandum Circular (RMC) No. 42-2001, providing further guidelines and information in the implementation of Revenue Regulations (RR) No. 3-93, as amended by RR No. 11-97, issuances implementing RA No. 7279. Documents submitted disclosed that HVI is an accredited socialized housing developer with the Housing and Land Use Regulatory Board (HLURB); that it has proposed to utilize and develop the two (2) parcels of land covered by Transfer Certificate of Title Nos. T-335540 (M) and 335541 (M), both of the Registry of Deeds of Meycauayan, Bulacan, situated in the Municipality of San Jose Del Monte, Bulacan, with an aggregate area of 14,568 square meters, owned by Gaudencio M. Diaz for socialized housing project; that on May 19, 2009, the City Government of San Jose Del Monte, Bulacan, has given the proposed project of HVI a preliminary approval and locational clearance; that on June 23, 2009, the above properties were identified by the HLURB to be utilized for the proposed socialized housing project; that on October 19, 2009, HVI proceeded in buying the above-mentioned properties from Gaudencio M. Diaz in the amount of P2,622,240.00; and that the documentary stamp tax due on the said sale transaction was paid on November 5, 2009. In reply, please be informed that Section 20 of RA No. 7279, provides as follows: EIcSDC "Sec. 20. Incentives for the 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 lands used for the project; (3) Value-added tax for the project contractor concerned;" Based on the foregoing, Gaudencio M. Diaz, the registered owner of the real properties covered by Transfer Certificates of Title Nos. T-335540 (M) and T-335541 (M), both of the Registry of Deeds of Meycauayan, Bulacan, to be utilized and developed into a socialized housing project, is exempt from the payment of capital gains tax, income tax, and consequently, from the withholding tax on the conveyance of the subject real properties in favor of HVI, the developer. (BIR Ruling No. S20-024-2006 dated June 28, 2006) Moreover, the above sale of real properties to HVI is not subject to VAT pursuant to Section 109 (P) of the Tax Code of 1997, as amended, as implemented by Revenue Regulations (RR) No. 16-2005, as amended. 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, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service