Latest Stories

Homeowner groups get breaks: Revenue agency sets conditions for tax exemptions


The income of homeowners’ associations may be subject to levies, but the Bureau of Internal Revenue has set conditions on how the groups may be exempted from various taxes.

In particular, the BIR is referring to associations’ revenue from homeowner-members’ dues and fees, rental of properties, and other charges to members and other entities.

In Revenue Memorandum Circular No. 9-2013, issued last Jan. 29, the BIR noted that under Republic Act No. 9904—or the Magna Carta for homeowners and homeowners’ associations—homeowners’ associations could be exempted from tax dues and rental income, subject to certain conditions.

Such income “forms part of the gross income of the [association], subject to income tax [and withholding tax],” the memo said. “This is because a homeowners’ association furnishes its members with benefits, advantages and privileges in return for such payments.”

The BIR mentions this to underscore that it would no longer regard association revenues as funds merely held in trust by concerned homeowners’ groups.

The revenue agency said that association revenues are subject to the value-added tax or subject to the percentage tax.

One of three conditions that the BIR cited as bases for exemption is that the association must exist as defined by the magna carta.

The law states that a homeowners’ association must be a non-stock, non-profit corporation registered with the Securities and Exchange Commission and the Housing and Land Use Regulatory Board, or previously with the Home Guaranty Corp., formerly the Home Insurance Guarantee Corp.

Also, an association is one that is organized by owners or buyers of a lot in a subdivision or by underprivileged and homeless citizens—as defined by law—who are in the process of gaining or who have gained ownership rights under various government programs related to socialized housing.

A second basis of exemption from taxes is when an association, as certified by the local government unit concerned, lacks the resources to provide its members basic community services and facilities such as security; street and vicinity lights; maintenance, repairs and cleaning of streets; and collection and disposal of garbage.

Third is that the association must show proof—like financial statements—that its revenues are used for basic community services and facilities.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: homeowners’ associations , Philippines , tax breaks , taxes

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Bernice Lee arrested by NBI team
  • Group: Bataan cop killed to stop him from exposing colleagues linked to drug ring
  • Chemical Engineer licensure examination
  • Troubled history fuels Japan-China tension
  • Palace: Our concern is to ensure MRT runs smoothly
  • Sports

  • NLEX fights off Derulo Accelero to remain unbeaten
  • Mayweather diehard Bieber eats pride, poses with Pacquiao for photo op
  • Power Pinays rip Singapore to enter quarters in Asian volley tilt
  • PBA D-League: Waves edge skidding Superchargers
  • Ilad’s last-second basket lifts Gems over Bakers
  • Lifestyle

  • Miss America: Don’t suspend teen over prom invite
  • Transitions and resurrection in the performing arts
  • ‘Archaeology tour’ of Cebu’s heritage of faith
  • Historic Fort Bonifacio tunnel converted into a septic tank
  • ‘Imports’ from London, and play of the year
  • Entertainment

  • Arrest warrants out vs. Deniece Cornejo, Cedric Lee, et al over serious illegal detention
  • Lindsay Lohan says she had a miscarriage
  • Discovery network cancels Everest jump
  • ‘Captain America’ stays strong atop US box office
  • Easter musings
  • Business

  • Century Pacific Food sets IPO price at P13.75 per share
  • Oil prices down in quiet Asian trade
  • Asian shares mixed in holiday-thinned trade
  • BDO seen keen on bidding for Cocobank
  • Bataan freeport investment pledges up 1,302%
  • Technology

  • PH has slowest internet in Southeast Asia
  • Nintendo’s trailblazing Game Boy marks 25th anniversary
  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Opinion

  • Gigi’s home
  • Palace stonewalls on MRT inquiry
  • Couple of things too
  • There is plenty of water behind Wawa Dam
  • Triduum thoughts of a young boy
  • Global Nation

  • Balikatan could spoil peace talks, says militant group
  • DFA officers hold workshop on aiding human traffic victims
  • Canada in communication with PH on toxic wastes
  • Filipinos in Middle East urged not to panic amid MERS-CoV scare
  • Obama on mission to quiet Asia skeptics
  • Marketplace