Tax incentives to be loosened for homeowners — source

While facing opposition from mass housing developers, the Board of Investments (BOI) would like to extend tax incentives to more Filipinos who own low-cost housing units. According to a source from the BOI, Trade Secretary and BOI chair Gregory Domingo is mulling a P2.5-million cap on qualified units – a middle-ground between the board’s initial proposal to lower the cap to P2 million and below, and the developers’ insistence to keep the original P3-million cap. The source privy to the matter requested anonymity as he was not authorized by the BOI to speak on its behalf. BOI computations show that a family earning P50,000 a month could only buy a house worth about P2 million. The source said three groups, including the Subdivision and Housing Developers Association Inc. and the Chamber of Real Estate and Builders’ Association Inc., have submitted position papers opposing the BOI proposal. Hence, low-cost mass housing units worth up to P2.5 million would “most probably" be qualified for perks, the source said. No opposition stood to block the agency’s proposal to scrap tax incentives for socialized housing projects, which are already tax-exempt, the BOI source said. The state-run Housing and Urban Development Coordinating Council defines “low-cost" housing as units that cost between P751,000 and P3 million, and “socialized" housing as those that cost P400,000 and below. Low-cost mass housing units worth P2.5 million and below are exempted from the value-added tax . Under the 2010 Investments Priorities Plan (IPP), mass housing projects in “less-served areas" determined by the BOI are awarded four years of income tax holiday (ITH). Those that are not in less-served areas are granted a three-year ITH. The BOI had said this rule would still apply under the 2011 IPP. — With Paterno Esmaquel II/VS, GMANews.TV