Under SEC. 4.109-1 (B) Exempt Transactions - (p) Sale of Real Properties Exempt from VAT - (4) of Revenue Regulations No. 16-2005 refers to Sales of residential lot valued at One Million Five Hundred Thousand Pesos (P1,500,0000.00) and below, or house & lot and other residential dwellings valued at Two Million Five Hundred Thousand Pesos (P2,500,000.00) and below where the instrument of sale/transfer/disposition was executed on or after November 1, 2005; Provided, That not later than January 31, 2009 and every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year;
If two or more adjacent residential lots are sold or disposed in favor of one buyer, for the purpose of utilizing the lots as one residential lot, the sale shall be exempt from VAT only if the aggregate value of the lots do not exceed P1,500,000.00. Adjacent residential lots, although covered by separate titles and/or separate tax declarations, when sold or disposed to one and the same buyer, whether covered by one or separate Deed of Conveyance, shall be presumed as a sale of one residential lot.
But Under Section 1 of the Revenue Regulations No. 3-2012 amends Sections 4.109.-1 (B), (p)(4) of Revenue Regulations No. 16-2005 as amended by Revenue Regulations No. 16-2011 should be worded as follows:
"(p) The following sales of real properties are exempt from VAT, namely:
(4) Sale of residential lot valued at One Million Nine Hundred Nineteen Thousand Five Hundred Pesos (P1,919,500) and below, or house & lot and other residential dwellings valued at Three Million One Hundred Ninety-Nine Thousand Two Hundred Pesos (P3,199,200.00) and below where the instrument of sale/transfer/disposition was executed and notarized on or after January 1, 2012;
However, for instruments executed and notarized on or after November 1, 2005 but prior to January 1, 2012, the threshold amounts should appropriately be P1,500,000 and P2,500,000 respectively.
Provided, That every three (3) years thereafter, the amounts stated herein shall be adjusted to its present value using the Consumer Price Index, as published by the National Statistics Office (NSO); Provided, further, that such adjustment shall be published through revenue regulations to be issued not later than March 31 of each year.
