BIR Ruling [UN-136-95]

April 3, 1995 BIR RULING [UN-136-95] National Housing Authority Quezon Memorial Elliptical Road Diliman, Quezon City Attention: Mr . Epifanio P . Recaa Officer-in-Charge Legal Department Gentlemen : This refers to your letter dated 26 October 1994 requesting confirmation of your opinion that the sale of Mr. Dionisio F. Coronel of his parcel of land located at Sta. Ana, Manila covered by Transfer Certificate of Title No. 67462 in favor of the National Housing Authority (NHA), to be used in Socialized Housing Project pursuant to Sections 19 and 20 of R.A. No. 7279, otherwise known as the Urban Development and Housing Act of 1992 is exempt from the payment of documentary stamp tax, registration fees, including the fees for the issuance of the transfer certificate of title in the name of NHA and capital gains tax. aisadc It is represented that the aforementioned land was acquired by the NHA for integration with its San Andres/Pasig Line ZIP Project for the benefit of low income families in compliance with its mandate under Executive Order No. 90, dated December 17, 1986 to focus and concentrate its efforts and resources in providing housing assistance to the lowest thirty percent urban income earners of the citizenry. In reply, please be informed that pursuant to Sections 19 and 20 of R.A. No. 7279, pertinent portions of which read: "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 real taxes. All documents or contracts executed by and in favor of the National Housing Authority shall also be exempt from the payment of documentary stamp tax and the registration fees, including fees required for the issuance of transfer certificates of titles . (emphasis supplied). "SEC. 20. Incentives for Private Sector Participating in Socialized Housing 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: (1) Project-related income taxes; (2) Capital gains tax on raw lands used for the project; xxx xxx xxx" the conveyance of the aforementioned property is exempt from the payment of documentary stamp tax. Likewise, the landowner, Dionisio F. Coronel is exempt from the payment of capital gains tax on the conveyance of the aforesaid property covered by Transfer Certificate of Title No. 67462 in favor of the NHA. Upon application for exemption, a lien on the title of the land shall be annotated by the Register of Deeds, having jurisdiction over the property to the effect, that the said property is to be applied or is being applied to socialized housing project pursuant to R.A. 7279. Upon the sale of the socialized housing units (house and lot) or lots only, the owner, shall be exempt from the project-related income taxes, and creditable expanded withholding tax prescribed under Revenue Regulations No. 1-90 as amended by Revenue Regulations No. 12-94. It shall be understood that to be tax-exempt, the selling price per lot or house and lot shall not exceed P150,000.00, in accordance with Revenue Regulations No. 9-93 implementing R.A. No. 7279. However, the exemption from registration fees, including the fees for the issuance of the transfer certificate of title falls within the jurisdiction of the Local Government. 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.(BIR Rulings No. 272 dated June 24, 1993) casia Very truly yours, ALICIA P. CLEMENO Assistant Commissioner (Legal Service) By: ALICIA L. TOMACRUZ Head Rev. Executive Assist . (Legal Service)