QuestionsQuestions (REVENUE REGULATIONS NO. 14-2000)
It amends specific sections of Revenue Regulations No. 13-99 to streamline and efficiently implement the capital gains tax rules (if any) presumed from the sale, exchange, or disposition of a natural person’s principal residence under the National Internal Revenue Code (1997), particularly in relation to Section 24(D) and Section 244.
It refers to the dwelling house, including the land on which it is situated, where the husband and wife or an unmarried individual and members of his family reside. Temporary absence (e.g., travel, studies, work abroad, or similar circumstances) does not interrupt or abandon occupancy, as long as the residence is characterized by permanency and the individual intends to return.
It means the dwelling house is the one in which, whenever the individual is absent, he intends to return—showing an intent to treat it as his home.
Only the dwelling house is treated as the principal residence of the dwelling house owner. If both the land owner and the house owner actually reside in the dwelling house, then both land and dwelling house are treated as their principal residence.
The principal residence tax exemption applies only to the co-owner(s) who actually occupy and use the property as their principal residence, but only to the extent of their proportionate share in the value.
It is treated as a conclusive presumption of the true residential address, in accordance with admission against interest/estoppel principles, notwithstanding certifications to the contrary.
The certification of the Barangay Chairman or Building Administrator (for condominium units) to show the principal residence and address—since there is no tax record immediately prior to sale.
The seller/transferor must comply with all conditions, including: (1) executing an escrow agreement depositing the presumed 6% capital gains tax in an interest-bearing account with an Authorized Agent Bank; and (2) filing the capital gains tax return and submitting required documents within the prescribed period.
The proceeds must be utilized in acquiring or constructing the new principal residence within eighteen (18) calendar months. The “date of sale or disposition” refers to the date of notarization of the document evidencing the transfer.
No. The escrow agreement is executed and deposited, and the seller/transferor shall not be required to pay any capital gains tax during the 18-month period if the conditions are met as required.
Within thirty (30) days from the date of sale or disposition, in duplicate, using BIR Form No. 1706.
Includes proof of payment of documentary stamp tax on the deed of sale/conveyance; sworn barangay/building administrator certification of principal residence location and residence immediately prior to sale; duplicate original deed of conveyance; certified xerox copy of TCT/CCT; certified xerox copy of the latest tax declaration; and, if constructed on/after 1990, the building permit or occupancy permit showing construction cost.
Within thirty (30) days from lapse of the 18-month period, the seller must submit sworn statements and supporting documents proving utilization of the proceeds in acquiring or constructing the new principal residence (including sworn statement of utilization, architect/engineer cost statement, building permit and related construction documents, and deed of absolute sale if purchased).
Upon showing (based on the submitted documents) that proceeds were fully utilized, the concerned Revenue District Officer shall release the escrow within fifteen (15) days from date of submission by the seller. The release is in favor of the seller/transferor.
Only once every ten (10) years.
He is treated as deficient in payment of his capital gains tax and shall be assessed deficiency capital gains tax inclusive of 20% interest per annum under the applicable code provisions. The escrow deposit (including interest) is applied against the deficiency tax once the assessment becomes final and executory; any remaining balance remains the seller’s liability.
If there is no full utilization of proceeds to acquire or construct the new principal residence, the seller is liable for deficiency capital gains tax inclusive of 20% interest per annum computed from the 31st day after the date of sale or disposition of the old principal residence.
Compliance with preliminary conditions under Sec. 3(1) and (2) is sufficient for the RDO to issue CAR or TCL stating the sale is exempt from capital gains tax pursuant to the code. However, it is expressly subject to compliance with post-reporting requirements under Sec. 3(3).