Exemptions from VAT

The following are exempt from VAT:

Sale of residential lot not exceeding P1,919,500.00 (effective January 1, 2012, as per RR
No. 16-2011[10]). If two or more adjacent 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 does not exceed P1,919,500.00 (effective January 1, 2012, as per RR
No. 16-2011[11]).
In practice, I have heard of cases where adjacent condominium units are bought but the selling
prices are not aggregated for purposes of computing whether the sale exceeds the threshold. I
believe that the reasoning made is that adjacent condominium units are not the same as adjacent
residential lots and thus, the rule on adjacent residential lots does not apply. This is the

aggressive position.
Sale of real properties not primarily held for sale to customers or held for lease in the

ordinary course of trade or business (in other words, a capital asset);

Sale of real property utilized for low-cost ( i.e. P750,000.00) and socialized housing ( i.e.
P400,000) as defined by Republic Act No. 7279 or the Urban Development and Housing Act of
1992;

Sale of residential house and lot not exceeding P3,199,200.00 (effective January 1, 2012,
as per RR No. 16-2011[12]). In practice, condominiums use this amount as the VAT threshold.

Source: http://www.foreclosurephilippines.com/2012/09/value-added-tax-vat-on-the-sale-of-realestate.html#ixzz2umVtO1W9