Issuance of BIR Certification Authorizing Transfer of Title to Real Property Acquired by Financial Institutions Through Foreclosure Sales

May 6, 1986 REVENUE MEMORANDUM ORDER NO. 07-86 SUBJECT : Issuance of BIR Certification Authorizing Transfer of Title to Real Property Acquired by Financial Institutions Through Foreclosure Sales TO : All Regional Directors, Revenue District Officers, and Revenue Examiners This Office has been receiving complaints from financial institutions on unnecessary difficulty and delay they encounter in securing BIR certification authorizing transfer of title to real property acquired through foreclosure sales. For the information of and strict implementation by those concerned, RMO No. 33-81, dated November 19, 1981, as amended by RMO No. 18-82, dated May 28, 1982, authorizes the transfer of title to real property acquired through mortgage foreclosure sale, without the pre-payment of the capital gains tax provided under Section 34(h) of the National Internal Revenue Code, as amended, subject to the following procedural requirements: 1. This Order is restricted only to (i) a bank; (ii) insurance company; and (iii) a finance company. 2. Within thirty (30) days after the foreclosure sale, the corresponding financial institution shall apply for the issuance of the certification required by Sec. 34(h) of the Tax Code with the Revenue District Officer of the place where the debtor-mortgagor has his legal residence or principal place of business. In said application, the bank (insurance or finance company) shall furnish the Revenue District Officer pertinent facts, including information on the following: a. Name of debtor-mortgagor, his legal residence or principal place of business; b. Amount of loan; c. Fair market value of property mortgaged. 3. Copies of the Deed of Real Estate Mortgage and the certificate of sale executed by the Sheriff should be furnished the Revenue District Officer. cd i 4. Upon receipt of the application containing the foregoing facts and information, with the required attachments, the Revenue District Officer shall issue the certification authorizing transfer of title to the bank (insurance company or finance company) in the form prescribed herein as Annex 'A'. Thereafter, the Revenue District Officer shall then conduct the necessary investigation to ascertain the capital gains tax due from the debtor-mortgagor in accordance with the procedure prescribed by Revenue Memorandum Order No. 21-80 dated May 28, 1980." EMPHASIS SUPPLIED Strict compliance with this Revenue Memorandum Order is enjoined. cd (SGD.) BIENVENIDO A. TAN, JR. Commissioner