BIR Ruling No. 003-2017

REPUKLK O THFPHHHPPINFS

BUREAU OF INTERNAL REVENUE DHPARIMENTOHINANGE uezon City

Sec. 20, R.A. No. 7279

BIR Ruling No.284-14 BIR Ruling No. 314-14:

00-2017 1-12-2017

BELLEFONTE PROPERTIES, INC 8751 Paseo De Roxas, Salcedo Village. Makati City

Attention : Ms. Milagros T. Blancas Vice President

Gentlemen:

This refers to your letter dated March 7. 2016. requesting Certificate of Tax Exemption on the sale of socialized housing units for "The Belleparc" Project in Barangay Sto. Tomas. Calauan, Laguna, pursuant to Republic Act (R.A.) No. 7279. otherwise known as the "Urban Development and Housing Act of 1992"

Taxpayer's Identification No. : under Philippine laws: that it is registered with the Securities and Exchange Commission Documents submitted show that BELLEFONTE PROPERIIES. INC.. with t is a corporation duly organized and existing

owner of a parcel of land and developer of a housing project known as "The Belleparc" (SEC) under Registration No. located at Barangay Sto. Tomas, Calauan, Laguna, which shall be used for its socialized engaged in real estate business; that it is the

housing project, the pertinent details of which are as follows. to wit:

TCT No. Arca (Sq.m.) 20.000

that the project is duly registered with the Housing and Land Use Regulatory Board (HLURB) under Certificate of Registration No. dated August 5, 2015. with License

Region. Dencris Business Center, Brgy. Halang. Calamba City for 260- lots & units for to Sell No. dated August 5. 2015. both issued by the HLURB Southern Tagalog

socialized housing, lo wit:

03-2017 12-217 Bellefonte Properties, inc./The Belleparc Page 2 of 5

The Bellepare HL.URB Certificate of Registration No

License to Sell No.

(260 lots/units)

NON-SALEABLE AREAS:

COMMUNITY Facility:

Lot 1.Block 37

PARKS & PLAYGROUND:

Lot 1. Block 38

EXCLUDED AREA:

Lot 1, Block 2 Lot 1. Block 1

1,375.34 sq.m. (27 units) of this project is used for compliance within the same project.

11.866.95 sq.m. (229 units) is used for compliance of the project. The Bellccourt- Sta. Rosa located at Sta. Rosa, Laguna.

and that the project is categorized as a socialized housing project as certified by the Regional Officer. Housing and Land Use Regulatory Board (HLURB). Southern Tagalog Region.

In reply, please be informed that Section 20 of R.A. No. 7279. reads:

"Sec. 20. Incentives for the 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 benefi. of the underprivileged and homeless, the following incentives shull be extended to the private sector:

XX XX XXX

" (d) Exemption from the payment of the following.

Project-related Income Taxes:

(2) xxx xxx xxx

(3 Value-Added Tax for the project contractor concerned "

: 003-2017

Bellefonte Properties, Inc./The Belleparc Page 3 of 5

X.X XXX XXX

Only the sale of socialized housing units to qualified beneficiaries shall bc exempt

under Revenue Regulations (R.R.) No. 2-98. as amcnded. from income tax. and consequently from creditable expanded withholding T'ax prescribed

devcloper/owner/seller to execute a sworn statement that he is eligible as a socialized Thus. a huyer of a socialized housing unit shall be required by the

housing beneficiary provided under Scction 5 (A) of R.R. No. 11-97.

Section 5 (A) of R.R. No. 1I-97 provides that:

Incentives!Exemptions. SEC. 5. RequirementsConditions for the Avuilment of Tux

A. To qualify for socialized housing program. a beneficiary

{(a} must be a Filipino citizen:

{b} must be an underprivileged and homeless citizen. as defined in Section 3(t)

of the Act and Section 2(r) of these Regulations;

(C) must not own any real property, whether in the urban or rural areas: and

must not be a professional squatter or a member of squatting syndicates.

In this connection. any sale made by the owner and developer to interested parties other than the principal target beneficiaries under Sections 3 (t) and 16 of R.A. No. 7279 shall not bc cntitled to the foregoing tax cxemption should there be non-compliance with any of the aforestated sine qua non terms and conditions. The developer shall submit the said sworn statement to the BIR during the processing of the Certificate Authorizing Registration (CAR) for thc transfer of the socialized housing unit. (BIR Ruling No. 314-14 dated August U.2014

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 house and lot packages in this casc does not rcally exceed P450.000.00 and P180.000.00 for lot only. Thus. sale of a housc and iot or lot only above the maximum amount shall be subject to the corresponding internal revenue taxes.

by the tax exemption clause in Section 20 of R.A. No. 7279. Such being the case. the documents conveying the properties imposed under Scction 196 of the Tax Code of 1997. owner/project developer/seller shall be liable to pay thc documentary stamp tax on the Nonetheless. it is observed that documentary stamp tax is not one of the taxes covered

as amended, based on the consideration contracted to be paid for such realties or on their fair

Bellefonte Properties, Inc./The Belleparc 03X17 1-172017 Page 4 of 5

higher. market value determined in accordance with Section 6 (E) of the said Code. whichever is

concerned. Relative thereto, Section 4.109-! (B)(1)(p)(3) of RR No. 16-2005 states that: project shall aiso be exempt from the payment of value-added tax (VAT) on the project Pursuant to Section 20 of R.A. No. 7279, a project contractor of a socialized housing

services and the use or lease of properties that is not subject to VAT (output tax) and the seller is not allowed any tax credit of VAT (input tax) on purchases. "VAT-cxempt transactions" refer to the sale of goods or properties and/or "Section 4.109-1. VAT-Exempt Transactions. --- (A) In generul.

XXX XXX XXX

(B) (2) hereof. the following transactions shall be exempt from VAT: Exempt transactions. -- (1) Subject to the provisions of Subsection

XXX XXX XX

(p) The following sales of real properties are exempt from VAT. namely:

XXX XXX XXX

defined under R.A. No. 7279. and other rclated laws, such as R.A. No. 7835] and R.A. No. 8763. wherein the price ceiling per unit is P225,000.00 or as may from time to tine be determined by the HUDCC and the NEDA and other related laws. . 3} Sale of real properties utilized for socialized housing as

portion of which reads: 16. 2013 and as circularized by Revenue Memorandum Circular No. 035-14, pertinent Furthermore, pursuant to HUDCC Resolution No. 1, Series of 2013. dated October

P400.000.00 to P450.000.00 be." that the price ceiling for horizontal socialized housing be adjusted from "THEREFORE BE IT RESOLVED. AS IT IS HEREBY RESOLVED

the newly adjusted price ceiling of P450.000.00 for socialized housing shall apply to sale of real properties utilized for socialized housing, as defined under R.A. No. 7279 otherwise known as "Urban Development and Housing Act". and other related laws such as R.A. No. 7835 otherwise known as the "Comprehensive and Integrated Shelter Financing Act of 1994" and R.A. No. 8763 otherwise known as the "Home Guaranty Act of 2000", heginning December 18. 2013.

Moreover. Section 2 of Revenue Regulations No. 17-2001 provides:

Bellefonte PropertieInc./Te Belleparc Page 5 of 5 0032017 1-12-2017

Section 2. Definition of Terms. -- As used in these Regulations. the following terms shall have the following meaning. X XX XX

P450.000.00)for a house and lot package, subject to periodic adjustment or increase as the Housing and Land Use Regulatory Board (HLURB) may effect "A socialized housing unit shall not exceed P150,000.00 (nov

from time to time. In the case of sale of homelots only. the price shall nor exceed forty percent (40%) of the maximum limit prescribed for the house and lot package. " (Emphasis supplied)

The developer of the socialized housing units under R.A.No.7279 is exempt from the payment of VAT pursuant to the aforecited provision. However, purchases of purchases are to be used for the socialized housing project. Moreover. it shall be understood goods/articles by the project contractor shall be subject to Value-Added Tax. even if the said that it must issue non-VAT official receipts on its gross receipts from the said socialized housing project. (BIR Ruling No. 284-14 dated July 9, 2014)

Accordingly,sale by BELLFONTE PROPERTIES,INC.of the House and Lot/Units

units-socialized housing) not exceeding the price ceiling of P450,000.00 (house and lot in The Belleparc project covered by HLURB License to Sell No. package and P180,000.00 (homelots only) to qualified beneficiaries should be exempt from Income Taxes and, consequently, from Creditable Expanded Withholding Tax and from VAT pursuant to R.A.7279 for 260 lots&

However. if upon investigation. it will be disclosed that the facts are different. then this ruling shall be considered null and void. This ruling is being issued on the basis of the foregoing facts as represented

Very truly yours. arana

Commissioner of Internal Revenuc CAESAR R.DULAY 002885 K-I-JAC