Monday, 24 January 2011 00:00 [ manilatimes.net ]
BY BEN ARNOLD O. DE VERA REPORTER
THE Board of Investments (BOI) has buckled to pressure from property developers, with the incentives-giving agency mulling to raise the ceiling on low cost mass housing units that could qualify for tax perks. A BOI source said Department of Trade and Industry (DTI) Secretary Gregory Domingo agreed to meet halfway the developers, who have bucked the government’s proposal to cut the ceiling to P2 million under the 2011 Investment Priorities Plan (IPP).
The source said Domingo, who chairs the BOI, is amenable to a P2.5 million ceiling, or P500 million below the P3 million cap set under previous IPPs.
In pushing for the P2 million cap, the BOI had said that a family earning P50,000 a month could buy a house worth only 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., submitted position papers bucking the BOI proposal.
Hence, low cost mass housing units worth up to P2.5 million would “most probably” be qualified for perks under the 2011 IPP, the source said.
The source said there was no opposition to the BOI’s proposal to scrap tax incentives for socialized housing projects, which are already tax-exempt.
State-run Housing and Urban Development Coordinating Council defines “low-cost” housing as those units costing between P751,000 and P3 million, and “socialized” housing as those priced P400,000 and below.
Low cost mass housing units worth P2.5 million and below enjoy exemption from value added tax.
Under the 2010 IPP, mass housing projects in “less served areas” are awarded four years of income tax holiday (ITH); those not in less served areas are granted a three-year ITH.
The BOI had said that this rule would still apply under the 2011 IPP.