Description.

The Community Mortgage Program (CMP) is a mortgage financing program of the

Social Housing Finance Corporation (SHFC) which assists legally organized
associations of underprivileged and homeless citizens to purchase and develop a tract
of land under the concept of community ownership. The primary objective of the
program is to assist residents of blighted areas to own the lots they occupy, or where
they choose to relocate to and eventually improve their neighborhood and homes to the
extent of their affordability.
Under Republic Act (RA) No. 7279, known as the Urban Development and Housing Act
of 1992, the sale of real property which shall be utilized for a socialized housing project
under the CMP is exempt from the Capital Gains Tax or ordinary Income Tax and its
corresponding creditable withholding tax. The said sale however is subject to the
payment of the Documentary Stamp Tax (DST).
Legal Reference.
Section 196 of the Tax Code of 1997.
Section 32(b) of RA 7279;
Procedures and Compliance Requirements.
The application for the issuance of the Tax Exemption Certificate for socialized housing
projects covered under the CMP shall be filed with the Legal and Legislative Division,
Rm. 709, 7th Floor, BIR National Office, together with the complete documentary
requirements therefor. The Tax Exemption Certificate shall be the basis of the RDO
having jurisdiction over the real property sold for the issuance of the Tax Clearance and
Certificate Authorizing Registration (CAR/TCL) necessary for the transfer of the title of
the real property.
Checklist of Documentary Requirements (click here)
Tax Forms.

BIR Tax Form 2000 for the DST.

Related Revenue and Other Issuances.
Revenue

Regulations

No. 17-2001 Revenue

Regulations (RR) No. 17-2001

(implementing the provisions on Community Mortgage Program of RA No. 7279,

otherwise known as the "Urban Development and Housing Act of 1992"), specifically
repealed Section 4.C.2 and Section 5.I of RR No. 9-93 and Section 4.C(b) and Section
5.F and G of RR No. 11-97.
Revenue Memorandum Circular (RMC) No. 42-2001 (Circularizing the Tax Incentives
of Sellers of Real Properties in Existing Areas for Priority Development (APDs) Sites,
and in other Areas that may be Identified by the Local Government Units as Suitable for
Socialized Housing Projects under R.A. No. 7279, Otherwise Known as the "Urban
Development and Housing Act of 1992" and the Valuation of the Subject Real
Properties for National Internal Revenue Tax Purposes)
Revenue Memorandum Circular (RMC) No. 35-2014 (Circularizing Relevant Portions
of Housing and Urban Development Coordinating Council (HUDCC) Resolution No. 1,
Series of 2013, Approving the Adjustment of the Price Ceiling for Socialized Housing),
adjusted the ceiling price for horizontal socialized housing from P400,000.00 per house
and lot to P450,000.00.
Revenue Memorandum Circular (RMC) No. 36-2011 (BIR Rulings on Socialized
Housing under Republic Act No. 7279), clarifies that the price ceiling for the sale of
socialized lots only shall not exceed forty percent (40%) of the maximum limit prescribed
for the house and lot package.