Revised Policy on Low-Cost Housing Projects and Withholding Tax
- Beginning March 1, 1990, all sales, exchanges, or transfers of real property with consideration not exceeding P500,000 shall be subject to 0% withholding tax regardless of the registration law of the housing project.
- The determination of whether a transaction is socialized/low-cost is based on the selling price or consideration, not on the project’s registration law.
- This aligns with prevailing low-income housing ceilings set by government housing facilities such as PAG-IBIG.
Proof Requirements for Lower Withholding Tax Rates
- To qualify for the lower 0% or 2.5% withholding tax rates, the presentation of copies of the Certificate of Registration and License to Sell for subdivision or condominium projects issued by HLURB is sufficient proof.
- This satisfies the HUDCC/HLURB certification requirements specified in the regulations.
Effectivity and Implementation
- This Revenue Memorandum Circular modifies RMC 7-90 dated January 16, 1990.
- It takes effect on March 1, 1990.
- The withholding tax rate applicable to a transaction shall be determined based on the date the sales documents are presented to the BIR.
Administrative Directives and Publicity
- All internal revenue officials and others concerned are directed to widely publicize the provisions of this Revenue Memorandum Circular.
- The Circular is signed by the Commissioner of Internal Revenue, Jose U. Ong, on February 16, 1990.