LAND & HOUSING FINANCE

Comprehensive & Integrated Shelter Finance Act (CISFA, Republic Act 7835)
~ Prescribes funding sources and additional budgetary appropriations for home lending
programs and the housing development programs of the housing agencies.

Creation of the Pag-IBIG Fund (Presidential Decree 1530)

~ Provides for a system of government and private employee contributions, with employer
counterpart, to be pooled into a mutual fund 70% of which is mandated to be allocated to
home loans of Fund members. Initially placed under the SSS and GSIS, administration of the
Fund was later transferred to the National Home Mortgage Finance Corporation (NHMFC) under
Executive Order 538 to facilitate development of the Secondary Mortgage Market for housing.
Subsequently, the Home Development Mutual Fund Corporation was created to administer the
Fund.

Charters:
o Home Development Mutual Fund (HDMF) to administer the Pag-IBIG Fund ~
Presidential Decree 1752
o National Home Mortgage Finance Corporation (NHMFC) to develop and operate the
Secondary Mortgage Market System for housing ~ Presidential Decree 1267
o Home Guaranty Corporation (HGC), formerly Home Insurance Guarantee Corporation
(HIGC), to provide a system of government guarantees for housing development loans
and home buyer financing loans ~ Republic Act 7863

LANDS LEGISLATED FOR TOURISM DEVELOPMENT

RA 7668 ~ Mt. Samat in Bataan

RA 7357 ~ Callao Cave in Cavite

On Real Estate Practice

RA 9646 - RESA Law ( July 30, 2009 )
On Buyers Protection and Benefit
RA 6552 - Maceda Law ( August 26, 1972)
~ Rights of Buyers of Property on Installment
~ Confers certain rights to installment buyers particularly in cases of default and cancellation
of the sales contract
~ Provides protection to buyers of residential units on installments against scrupulous
sellers/contracts (including residential condominium apartments, but excluding industrial lots,
commercial buildings and sales to tenants.
PD 957

-The Subdivision and Condominium Buyers Protective Decree ( July 12, 1976)
~ Prescribes the comprehensive rules and standards to govern the development, sale and
regulation of subdivision and condominium projects.
-features:
regulate sale of subdivision lots and condominiums units to buyers
defines sale to be covered by registration
defines duties and responsibilities of owner/developer (o/d) of condominium and
subdivision projects.
defines rights of condominium/subdivision units/lot buyers

Capital Gains Tax

Capital Gains Tax vs. Income Tax
When there is a sale of real estate, automatically people think that they have to pay Capital Gains Tax (CGT). This is not
necessarily the case.
CGT is a tax on the gain from the sale of capital assets.
o
Regular Corporate Income Tax (RCIT) [for corporations] and
o
Regular Income Tax [for individuals] apply to the sale of ordinary assets
o
while CGT applies to the sale of capital assets
we first have to determine whether the asset being sold is a capital or an ordinary asset so as to know the proper tax rate to be
used and the BIR form to be used, among other
Capital assets vs. Ordinary assets
capital assets is defined negatively in Section 39(A)(1) of the Tax Code as follows:
Capital Assets. the term capital assets means property held by the taxpayer (whether or not connected with his trade or
business), but does not include
stock in trade of the taxpayer or other property of a kind which would properly be included in the inventory of the taxpayer if
on hand at the close of the taxable year, or
property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business, or
property used in the trade or business, of a character which is subject to the allowance for depreciation provided in
Subsection (F) of Section 34;
or real property used in trade or business of the taxpayer.
capital assets and ordinary assets as applied to the real estate industry - Section 2(c) of Revenue Regulations (RR) No. 7-2003
dated December 27, 2002.
- Its essentially the same as the above definition.
- It has an additional provision on real properties acquired by banks through foreclosure sales
the same are considered as their ordinary assets but banks shall not be considered as habitually engaged in the real
estate business for purposes of determining the applicable rate of expanded withholding tax.
Since we are talking about the sale of real property here, we need to know the definition of real property.
Section 2(c) of RR No. 7-2003
o
Real property shall have the same meaning attributed to that term under Article 415 of Republic Act No. 386,
otherwise known as the Civil Code of the Philippines.
Article 415 of the Civil Code provides:
o
Art. 415. The following are immovable property:
(1) Land, buildings, roads and constructions of all kinds adhered to the soil;
(2) Trees, plants, and growing fruits, while they are attached to the land or form an integral part of an immovable;
(3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without
breaking the material or deterioration of the object;
(4) Statues, reliefs, paintings or other objects for use or ornamentation, placed in buildings or on lands by the owner of
the immovable in such a manner that it reveals the intention to attach them permanently to the tenements;
(5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works
which may be carried on in a building or on a piece of land, and which tend directly to meet the needs of the said industry
or works;
(6) Animal houses, pigeon-houses, beehives, fish ponds or breeding places of similar nature, in case their owner has
placed them or preserves them with the intention to have them permanently attached to the land, and forming a
permanent part of it; the animals in these places are included;
(7) Fertilizer actually used on a piece of land;
(8) Mines, quarries, and slag dumps, while the matter thereof forms part of the bed, and waters either running or
stagnant;
(9) Docks and structures which, though floating, are intended by their nature and object to remain at a fixed place on a
river, lake, or coast;
(10) Contracts for public works, and servitudes and other real rights over immovable property.
***Thus, it appears that it is not only the sale of land and buildings or houses which we should be focusing on, but also the sale of
the above.
***RR No. 7-2003
- Section 3 of RR No. 7-2003 provides the Guidelines in Determining Whether a Particular Real Property is a Capital Asset or
Ordinary Asset

- if the property is not ordinarily held for sale (as inventory) or used in business and subject to depreciation, then the property is a
capital asset.