QuestionsQuestions (BIR REVENUE REGULATIONS NO. 13-99)
It is issued pursuant to Section 244, in relation to Section 24(D)(2) of the NIRC of 1997.
A citizen or resident alien individual taxable under Section 24 of the Code; it does not include an estate or trust.
The dwelling house (including the land) where the husband and wife or an unmarried individual and members of his family reside; actual occupancy is not considered interrupted by temporary absence due to travel/studies/work abroad or similar circumstances, provided the dwelling is characterized by permanency (the individual intends to return whenever absent).
The taxpayer must have commenced construction of the new principal residence or entered into a contract for purchase within 18 calendar months from the date of sale, with intention to use the entire proceeds; expenses paid for effecting the sale (e.g., documentary stamp tax, transfer fees, broker’s commission) are considered part of the amount utilized.
It must be filed with the Revenue District Office (RDO) having jurisdiction over the location of the principal residence within 30 days from the date of sale/exchange/disposition.
Examples include: (1) duly accomplished BIR Form 1706; (2) proof of payment of documentary stamp tax on conveyance; (3) a sworn statement from the Barangay Chairman; (4) duplicate original deed of conveyance; (5) photocopy of TCT/CCT; (6) latest tax declaration of the principal residence.
Within 30 days from the lapse of the 18-month reglementary period, the taxpayer must submit proof/positive action that the proceeds were actually used for acquisition/construction of the new principal residence, including sworn statements and certified documents (e.g., architect/engineer cost statement, building permit, and/or deed of sale if purchase).
Within 18 calendar months from the date of sale, exchange or disposition of the old principal residence.
Only once every 10 years.
The exemption does not arise to the extent of the unutilized portion; deficiency capital gains tax becomes due and demandable on the 31st day after the date of sale (date of notarization), and the taxpayer must file the corresponding capital gains tax return and pay surcharge and delinquency interest.
Compute the percentage of non-utilization: (unutilized portion of GSP / GSP). Multiply this percentage by the GSP or FMV, whichever is higher, then multiply the result by 6%.
Tax becomes due on the 31st day after the date of sale; surcharge applies for late payment, and delinquency interest is computed from the 31st day after the date of sale until the date of payment.
It means the date of notarization of the document of sale/exchange/disposition of the principal residence.
The historical cost or adjusted basis of the old principal residence sold shall be carried over to the cost basis of the new principal residence.
Only the fraction corresponding to the utilized amount/GSP is carried over; equivalently, the portion of historical cost pertaining to the unutilized percentage is excluded from the carry-over.
Yes, the exchange is not subjected to capital gains tax for the individual taxpayer-transferor, provided the condominium unit received is used as the new principal residence. The transferee corporation is generally subject to tax (income tax withholding/appropriate regime depending on asset classification), and the exemption applies to individuals only when they also use the condominium as a principal residence.