Petition to VAT-Exempt the Homeowners Associations


Petitioning Commissioner Kim S. Jacinto-Henares
Petition to VAT-Exempt the Homeowners Associations

In 2012, the Bureau of Internal Revenue (BIR) published Revenue Memorandum Circular (RMC) No. 65-2012 that imposed Value Added Tax (VAT) on dues that are being paid by members of Condominium and Subdivision Homeowners Associations (HAs). This petition requests BIR to cancel RMC No. 65-2012.

1. PRINCIPLE. Homeowners Associations rely its income and operations fund solely from contributions of its members. Hence, HAs are self-help organizations that provide basic public utilities and services such as lighting utilities, sanitary services, and security services in common areas of condominium and subdivision communities. These utilities and services are benefited by the general public for free. The services of the Local Government Units (LGUs) does not reach the common areas of the HAs.

2. LEGAL BASIS. 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 in 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."

3. CONFORMITY. We are applying to the HAs the same principle of tax-exemption that is being enjoyed by the beneficiaries of the Cooperative Code of the Philippines (R.A. No. 9520) and Revised Non-Stock Savings and Loan Association Act of 1997 (R.A. No. 8367).

4. IMPLEMENTATION. To prevent abuse and tax evasion, we recommend that the tax exemption be granted only to HAs with unexpired Certificate of Registration as Homeowners Association in the Housing and land Use Regulatory Board (HLURB). To implement this, we recommend that BIR develops a Certificate of Tax Exemption for HAs that is somewhat similar to BIR Form No. 2333-B Certificate of Tax Exemption for Cooperatives.

Lead petitioner:

Rltr. John Odonnell R. Petalcorin
Member, Cityland Vito Cruz Towers Homeowners Association
Real Estate Broker (PRC License # 0010105)
Blogger, Real Estate Service Coach
Founder, RealterSociety.Org
Lead Convenor, IPORESP.Org
Cellphone: 0921-7172040 (Smart)
Landline; (02) 5830858
Email: JohnPetalcorin@Gmail.Com


Panalo ang ipinaglalaban natin. Salamat sa mga pumirma ng Online Petition, kahit konti lang pumirma. 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.
Thank you so much for visiting my site. May God Bless You!

1 comment:

Olivia Cunnings said...

Let us think first of which will we be investing. Know more about real estate before investing in this kind of business to make sure that your money will not be wasted. It is important that we have knowledge in this business to ensure that our investment money will not be wasted.

Property Investment Portfolio