Removing tax perks to deject developers

The government’s proposal to scrap the incentives for socialized housing developers under the Tax Reform for Acceleration and Inclusion (TRAIN 2) law could put off developers in this particular segment.

“Essentially, OSHDP is not in favor of provisions of proposed bills that will remove incentives to socialized and low cost housing developments,” said Organization of Socialized and Economic Housing Developers of the Philippines Inc., (OSHDP) president Marcelino Mendoza in an interview yesterday.

He stressed that developers producing houses for the poor should be protected to encourage private developers to build more.

“This sector is producing houses that should have been the responsibility of the government,” Mendoza said adding that it is not a profitable venture, thus government support is necessary.

TRAIN removes VAT exemptions from the sale of low-cost housing; sale of residential lot valued at P1.919 million and sale of other residential dwellings valued at P3.199 million; and lease of residential units not exceeding P12,800 per month.

Mendoza added that this, and other changes in providing incentives for low cost housing developers, could discourage builders to invest in this residential development category.

OSHDP has over 200 member developers across the Philippines. Last year, these developers produced an additional of a little over 30 thousand affordable houses, still way far behind in resolving the six million housing backlog in the country.