BIR Ruling [UN-063-95]

February 13, 1995 BIR RULING [UN-063-95] 1st AM Realty and Development Corporation 35 Collantes St., Xavierville I Loyola Heights, Quezon City Attention: Mr . Alejandro Macasaet President Gentlemen : This refers to your letter dated February 13, 1995 requesting for a ruling that the sale of house and lot package at P150,000.00 or less at your Villa Macaria Subdivision located at Candelaria, Quezon on the following: cdtech Lot No. Block No. 18 I 21, 23, 25, 27, 29, 31, 33 II 24, 26, 28, 30 III 20 IV 9 to 22 V 2, 4, 6, 8, 10, 12, 14, 15, 16 VI 1 to 26 VII 1 to 19 VIII 1 to 10 IX under your socialized housing project registered with the Housing and Land Use Regulatory Board (HLURB) pursuant to R.A. No. 7279, is exempt from the expanded creditable withholding tax. Documents submitted show that Villa Macaria Subdivision is a duly registered socialized housing project under R.A. No. 7279, per certification issued by the HLURB on February 10, 1995; and that as owner-developer of the said project, your maximum selling price per house and lot is P150,000.00. In reply, please be informed that Section 4 of Revenue Regulations No. 6-85 as amended by Section 3 of Revenue Regulations No. 12-94, provides as follows: "SEC. 4. Exemption from Withholding . The withholding of tax prescribed in these regulations shall not apply to income payments in the following cases: xxx xxx xxx (b) Income payments to persons enjoying exemption from payment of income taxes pursuant to the provisions of any law, general or special, such as but not limited to the following: 1. Sales of real property by a corporation which is registered with and certified by the Housing and Land Use Regulatory Board (HLURB) as engaged in socialized housing projects pursuant to Republic Act No. 7279 and its implementing regulations and whereby the selling price of the house and lot or only the lot does not exceed P150,000.00 or at such adjusted amount of selling price for socialized housing as may later be determined and adapted by the HLURB, pursuant to the aforesaid law: xxx xxx xxx Accordingly, since you are registered with and certified by the Housing and Land Use Regulatory Board (HLURB) as engaged in socialized housing projects pursuant to Republic Act No. 7279, the sale of house and lot package at P150,000.00 or below is exempt from the expanded withholding tax pursuant to Revenue Regulations No. 12-94 amending Revenue Regulations No. 6-85. However, it is observed that documentary stamp tax is not one of the taxes covered by the tax exemption clause in Sec. 20 of R. A. 7279. Such being the case, as Project-developer/seller, 1st AM Realty and Development Corporation shall be liable to pay the documentary stamp tax on the document conveying the property imposed under Sec. 196 of the Tax Code, as amended, based on the actual consideration paid to it. In this connection, any sale made by 1st AM Realty and Development Corporation to interested parties other than the principal target beneficiaries under Sections 3(t) and 16 of R.A. No. 7279, shall not be entitled to the foregoing tax exemption, should there be non-compliance with any of the sine qua non terms and conditions as aforestated, for tax exemption purposes. It is, however, understood that the Certificate Authorizing Registration (CAR) shall only be issued after it is established upon proper verification by the Revenue District Officer (RDO) concerned that, considering the rules on valuation of real property, the actual selling price per sale transaction of the units in this case does not really exceed P150,000.00. 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, and/or any of the requirements imposed in this letter are not complied with, then this ruling shall be considered null and void. (BIR Rulings No. S-32-073-94 dated March 11, 1994). Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service)