BIR Ruling No. 302-2020

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

RA No.7279 BIR Ruling No. 034-15

CMP-0302-2020 JUN 0 8 ZuzU

SAMAHANG MARALITA CATMON HOMEOWNERS ASSOCIATION,INC Sitio 6, Catmon, Malabon City 1470

Attention : 1 DENNIS B.MASTELERO

SMC HOA President

Gentlemen:

CATMON HOMEOWNERS ASSOCIATION,INC., in favor of its qualified member- gains tax (CGT), relative to the transfer of title of land from SAMAHANG MARALITA beneficiary pursuant to Republic Act No. 7279 otherwise known as the "Urban Development and Housing Act of 1992". This refers to your letter dated June 14, 2019, requesting exemption from capital

registered owner of the parcel of land located at Lot 2, BIk. 1, SMC Homeowners, Sitio 6, ASSOCIATION, INC., with Taxpayer's Identification No. Gov. Pascual Ave., Catmon, Malabon City and covered by Transfer Certificate of Title non-profit organization duly registered with the Housing and Land Regulatory Board acquired through a loan under the CommunityiMortgage Program (CMP) with Foundation 2004 in the amount of Nine Million Nine Hundred Eighty Thousand Eight Hundred Twenty CATMON HOMEOWNERS ASSOCIATION, INC. in favor of its member-beneficiary, to wit: (TCT) No. (HLURB) under the Certificate of Registration Nol For Alternatives, Inc., as Originator; that said project was taken-out/paid on November 23. 22, 2019. a Deed of Absolute Sale was executed by SAMAHANG MARALITA Pesos (P It is represented that SAMAHANG MARALITA CATMON HOMEOWNERS ssued by the Registry of Deeds of Malabon City; that it is a non-stock, ), involving One Hundred Fifty Four (154) beneficiaries; that on July .; that the aforesaid lot was is the

Member-Beneficiaries DANIEL KOLEN M. MANLAPIG TCT No. M-41886 Lot Area (sq. m. 20 Sitio 6, Gov. Pascual Ave., Catmon, Lot 2, Blk. 1 SMC Homeowners, Malabon City Address

and that Daniel Kolen M. Manlapig, a member-beneficiary, is now in the process of transferring the purchased property to his name.

member-beneficiary who has made full payment of his purchased subdivided lot is not subject to either the CGT imposed under Section 27 (D) (5) of the Tax Code of 1997, as CATMON HOMEOWNERS ASSOCIATION, INC. in favor of the above-named In reply,please be informed that the transfer by SAMAHANG MARALITA

CMP-0302-2020

JUN 0 8 2020

SAMAHANG MARALITA CATMON HOMEOWNERS ASSOCIATION, ING Page 2 of 2

amended, or the creditable withholding tax imposed under Revenue Regulations No. 2-98. as amended, considering that the said transfer of property is made only as a formality to finally effect the transfer of the said property to its member-beneficiary, Daniel Kolen M. Manlapig, who actually bought the same from the former owner through the Association. In

other words, the association is merely transferring the ownership of the property to its member-beneficiary who actually owns the aforedescribed lot.

Furthermore, the said transfer is not subject to the donor's tax imposed under

Section 98 of the Tax Code of 1997, as' amended, since there is no donative intent on the part

of the Association to donate the said property to said member-beneficiary, considering that

it could not donate property the ownership of which already belongs to the member- beneficiary. (BIR Ruling No. 034-2015 dated February 5, 2015)

It is noted that under Section 196 of the Tax Code of 1997, as amended, the deeds or

documents subject to the documentary stamp tax (DST) imposed therein are those where the

realty sold shall be granted, assigned, transferred, or btherwise conveyed to a purchaser or

purchasers or to any other person or persons designated by such purchaser or purchasers.

thereby excluding from its purview the instant case considering that the supposed purchaser

is actually the owner thereof.

Accordingly, the transfer of title of the subject lot in favor of the above-named

beneficiary is not subject to DST under Section 196 of the Tax Code of 1997, as amended.

However, the notarial acknowledgment to the Deed of Sale is subject to the documentary

stamp tax of P30.00' pursuant to Section 188 of the Tax Code of 1997. (BIR Ruling No. 034-

2015 dated February 5, 2015)

It is, however, understood that the Certificate Authorizing Registration (CAR) shall

only be issued after the submission of the requirements provided under RMO 15-2003 and

after it is established upon proper verification by the Revenue District Officer (RDO)

concerned that, considering the rules on valuation on real property, the actual selling price

per sale transaction in this case does not exceed p450,000.00 for house and lot and

P180.000.00 for lot only for each qualified beneficiaries. (BIR Ruling No. 034-2015 dated

February 5, 2015)

This ruling is being issued on the basis ofthe 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,

1aaw1&a

CAESAR R. DULAY

.Commissioner of Internal Revenue

K-1-JAC 035102

The new DST rate is used since the transaction took place after the effectivity of Republic Act No.10963 or

TRAIN Law.