RR No. 13-2012: Prescribes the VAT treatment on sale of adjacent residential lots, house and lots or other residential dwellings, thereby amending certain provisions of RR No. 16-2005, as amended

Key points

1. New paragraph in Section 4.106-3. Sales within a 12-month period of two or more adjacent residential properties to one buyer from the same seller, for use as one residential area, are subject to VAT when the aggregate value exceeds P 1,919,500.00 for residential lots or P 3,199,200.00 for house and lots or other residential dwellings.
2. Amended exemption rule. Section 4.109-1 (B)(1)(p)(4) is amended so that such a sale is VAT exempt only if the aggregate value does not exceed P 1,919,500.00 for residential lots, and P 3,199,200.00 for house and lots or other residential dwellings.
3. Treated as one sale. Adjacent properties with separate titles or tax declarations, sold to the same buyer under one or separate Deeds of Conveyance, are presumed to be a sale of one property.
4. Parking lots. The sale of a parking lot in a condominium is a separate transaction and is not covered by the threshold rules. It is subject to VAT regardless of the selling price.

Who is affected

• Sellers of adjacent residential lots, house and lots or other residential dwellings to one buyer

Deadlines and effectivity

• Aggregation period: sales within a 12-month period