Tuazon Village Homeowners Association, Inc.

December 4, 2009 BIR RULING [SH-(122) 746-09] 20 RA 7279; S20-111-2000 Tuazon Village Homeowners Association, Inc. Purok 5, Barangay San Vicente, Panabo City Davao Del Norte Attention: Ms. Gesel H. Ibanez Secretary Gentlemen : This refers to your letter dated August 26, 2009, requesting for exemption from the payment of Capital Gains Tax and Documentary Stamp Tax on the transfer of a parcel of land in favor of Tuazon Village Homeowners Association, Inc. pursuant to Republic Act (RA) 7279. ASDCaI Documents submitted disclosed that the Valeriana B. Tuazon is the registered owner of a parcel of land covered by Transfer Certificate of Title No. T-235475 with an area of 30,748 square meters, more or less; that a Deed of Absolute Sale dated October 9, 2009 was executed by Valeriana B. Tuazon and Tuazon Village Homeowner's Association, Inc.; that Tuazon Village Homeowners Association, Inc. with TIN 006-410-878-000 is a duly accredited association existing under the BP 220 Socialized Housing GLAD Program and registered with the Housing and Land Use Regulatory Board under Registration No. 12513 dated January 18, 2007. In reply, please be informed that pursuant to Section 32 of R.A. No. 7279, pertinent portion of which reads: "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 landowner who sells his/her/its property for use in socialized housing project is exempt from the payment of capital gains tax and from the expanded withholding tax under Revenue Regulations No. 12-94, as amended by Revenue Regulations No. 2-98. Such being the case, the sales to the members of the Tuazon Village Homeowner's Association, Inc. of the portions of the real property covered by TCT No. T-235475 are exempt from the capital gains tax and the expanded withholding tax. Upon issuance of this letter of exemption, and upon registration of the documents of sale, a lien on each Certificate of Title to be issued in the name of the individual members of the Tuazon Village Homeowner's Association, Inc. shall be caused to be annotated by the Register of Deeds having jurisdiction over the properties, to the effect, that the sales of said properties are in accordance with the provisions of R.A. No. 7279. However, it is observed that the documentary stamp tax is not one of the taxes covered by the tax incentives/exemption clause under Sections 20 and 32 of R.A. 7279. Such being the case, the seller, Valeriana B. Tuazon, is liable to pay the documentary stamp taxes on the documents conveying the portions of her real property to the members of the Tuazon Village Homeowner's Association, Inc. under Sec. 196 of the Tax Code of 1997, as amended. The documentary stamp tax shall be based on the consideration contracted to be paid or the fair market value of the realty determined in accordance with Section 6 (E) of the Tax Code of 1997, as amended whichever is higher. (BIR Ruling S-32-062-2000 dated May 10, 2000) HSaIDc 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