A Law Exempting Homeowners Association from All Taxes
QUESTION: Rltr John, this is about Bureau of Internal Revenue (BIR) Revenue Memorandum Circular (RMC) No. 65-2012. Is there a law that we can cite as reference to debunk the BIR ruling that imposes VAT on Association Dues?
ANSWER: Oh yes there is.
Section 18 of the Magna Carta for Homeowners and Homeowners’ Associations (Republic Act 9904) of January 7, 2010, says: "Where the LGUs lack resources to provide for basic services, the associations shall endeavor to tap the means to provide for the same. In recognition of the associations’ efforts to assist the LGUs III providing such basic services, association dues and income derived from rentals of their facilities shall be tax - exempt: Provided, That such income and dues shall be used for the cleanliness, safety, security and other basic services needed by the members, including the maintenance of the facilities of their respective subdivisions or villages."
So if your HA (including Condominium Corporation) wants to be exempt from that VAT on Association Dues, you get it registered in Housing and Land Use Regulatory Board (HLURB) as a Non-Stock Non-Profit Corporation.
Just a piece of offer, HA administration, real estate ownership, leasing, and selling are most of the time complicated. Your HA can get me as common consultant at very cheap retainer basis; so that in any moment your HA or your members need advice on any real estate issues, just have them ring me up.
As lead convenor of the Integrated Professional Organization of Real Estate Practitioners (IPORESP), I would like to encourage the Homeowners Association to maximize your voice in the real estate sector and expand your connections with the real estate professionals by registering (for FREE) to IPORESP. Homeowners Association are part of the IPORESP organizational structure, and in fact, the HAs have their own Cluster (refer to IPORESP By-Laws). If you have any question on this, please ask me.
As founder of the Realter Society, I would like to inform everyone that HA Administrators can avail of the right to use the Rltr (Realter) professional title by registering in Realter Society. HA administrators include those who manage the Administration of condominium and subdivision homeowners associations; General Managers of hotels, resorts, and Golf and Country Clubs; including Property Managers and court-appointed Estate Administrators. If you have question on this, please ask me.
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I dedicate this blog to Kate, Alyssa, and Jessa, PUP students in Accountancy who are conducting a group thesis research on Value Added Tax on Homeowners Associations.
UPDATE. June 2014. MANILA, Philippines - The Court of Tax Appeals (CTA) has ruled that condominium or association dues as well as other fees collected from unit owners are not subject to income tax and withholding tax. Read more at
If there is anything else important that I forgot to include in this article, or if you experienced a real estate transaction that is anomalous, scam, fraudulent scheme that you want me to document and expose for others to be warned, or if you want to donate to the war chest of real estate consumer rights advocacy, please feel free to email me at JohnPetalcorin@Gmail.Com. If you want to comment about this article, there is a provision for this purpose that you can find below.
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