Under SEC. 4.109-1 VAT-Exempt Transaction (B) Exempt
Transactions - (q) Lease of
residential units with a monthly rental per unit not exceeding Ten Thousand Pesos
(P10,000.00), regardless of the amount of aggregate rentals received by the
lessor during the year; Provided, that not later than January 31, 2009 and
every three (3) years thereafter, the amount of P10,000.00 shall be adjusted to
its present value using the Consumer Price Index, as published by the NSO;
The foregoing notwithstanding, lease of residential units
where the monthly rental per unit exceeds Ten Thousand Pesos (P10,000.00) but
the aggregate of such rentals of the lessor during the year do not exceed One
Million Five hundred Pesos (P1,500,000.00) shall likewise be exempt from from
VAT, however, the same shall be subjected to three percent (3%) percentage tax.
In cases where a lessor has several residential units for
lease, some are leased out for a monthly rental per unit not exceeding
P10,000.00 while others are leased out for more than P10,000.00 per unit, his
tax liability will be as follows:
1. The gross receipts from rental not exceeding P10,000.00
per month per unit shall be exempt from VAT regardless of the aggregate annual
gross receipts.
2. The gross receipts from rental exceeding P10,000.00 per
month per unit shall be subject to VAT if the aggregate annual gross receipts
from said units only (not including the gross receipts from unit leased for not
more than P10,000.00) exceeds P1,500,000.00. Otherwise, the gross receipts will
be subject to the 3% tax imposed under Section 116 of the Tax Code.
The term 'residential
units' shall refer to
apartments and house & lots used for residential purposes, and building or
parts or units thereof used solely as dwelling places (e. g., dormitories,
rooms and bed spaces) except hotels, motel rooms, hotels and hotel rooms.
The term 'unit' shall mean an apartment unit in
the case of apartments, house in the case of residential houses; per person in
the case of dormitories, boarding houses and bed spaces; and per room in case
of rooms for rent.
However, the bureau has issued the Revenue Regulations No. 3-2012 of the Effectivity of Threshold Amounts
for Sales of Residential Lot, Sales of House and Lot, Lease of Residential Unit
and Sales or Lease of Goods or Properties or Performance of Services covered by Section 109 (P), (Q) and
(V) of the Tax Code of 1997, as amended.
The threshold
amounts has been adjusted as
follows:
1. Section 109 (P) - from P1,500,000.00 to P1,919,500.00
2. Section 109 (P) - from P2,500,000.00 to P3,199,200.00
3. Section
109 (Q - Lease of Residential Units) - from P10,000.00 to P12,800.00
4. Section 109 (V) - from P1,500,000.00 to P1,919,500.00
The new threshold amount was made effective for instrument of
sale (whether the instrument is nominated as a deed of absolute sale, deed of
conditional sale or otherwise) is executed and notarized on or after January 1, 2012.
