More News from Cebu Daily News
The Bureau of Internal Revenue (BIR) issued Revenue Regulations No. 13-2012 dated Oct. 12 providing for the Value Added Tax (VAT) treatment on sale of adjacent residential lots, house and lots or other residential dwellings, thereby amending certain provisions of Revenue Regulations No. 16-2005, as amended, otherwise known as Consolidated VAT Regulations of 2005.
The new regulation was brought about by the practice of some taxpayers to intentionally document as separate units adjacent residential lots, house and lots, or other residential dwellings like condominium units which are actually being combined and utilized as one residential unit in order to avoid payment of the VAT by keeping them below the VAT threshold amount.
Thus, adjacent residential lots, house and lots or other residential dwellings although covered by separate titles and/or separate tax declarations, when sold or disposed to one ad the same buyer, whether covered by one or separate Deed/s of Conveyances, shall be presumed as a sole of one residential lot, house and lot or residential dwelling.
Vatable transactions therefore includes sale, transfer or disposal within a 12-month period of two or more adjacent residential lots, house and lots or other residential dwellings in favor of one buyer from the same seller, for the purpose of utilizing the lots, house and lots or other residential dwellings as one residential area wherein the aggregate value of the adjacent properties exceeds P1,919,500.00 for residential lots and P3,199,200.00 for residential house and lots or other residential dwellings.
This, however, does not include the sale of parking lot which may or may not be included in the sale of condominium units.
The sale of parking lots in a condominium is a separate and distinct transaction and is not covered by the rules on threshold amount not being a residential lot, house and lot or a residential dwelling, thus, should be subject to VAT regardless of amount of selling price.
Accordingly, exempt from the VAT are transactions involving two or more adjacent residential lots, house and lots or other residential dwellings which are sold or disposed in favor of one buyer from the same seller, for the purpose if utilizing the lots, house and lots or other residential dwellings as one residential area if the aggregate value of the said properties do not exceed P1,919,500 for residential lots, and P3,199,200 for residential house and lots or other residential dwellings.
You may contact the author at email@example.com.
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94