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BOI plans cap on mass housing perks

Saturday, 08 January 2011 00:00
[ manilatimes.net ]
By Ben Arnold O. De Vera, Reporter
THE Board of Investments (BOI) would put a cap on mass housing projects that shall enjoy incentives even as developers opposed the plan and sought to expand the definition of “low cost” housing.
During the public hearing on the 2011 Investment Priorities Plan (IPP) on Friday, Maria Corazon Dichosa, BOI policy and planning director, said this year’s list of priority investment areas no longer includes socialized housing because such developments are already tax exempt.
The Housing and Urban Development Coordinating Council (HUDCC) defines “socialized” housing as units that cost P400,000 or less.
For low cost mass housing pro-jects, only the units worth P2 million may be entitled to incentives, Dichosa said.
Under HUDCC’s definition, low cost units are priced between P751,000 and P3 million.
Mass housing developers were quick to oppose the BOI’s move.
“It’s a disincentive reducing the ceiling [for low cost mass housing projects that shall be given perks under the 2011 IPP] . . . By reducing the ceiling to P2 million, you eliminated the market niche of the P2.5-million and P3-million [units],” said Charlie Gorayeb, Chamber of Real Estate and Builders’ Association Inc. (CREBA) president.
Gorayeb said CREBA this week petitioned that the HUDCC expand the definition of low cost mass housing to include units worth up to P3.5 million.
Trade Undersecretary and BOI Managing Head Cristino Panlilio said during the public hearing that the government has to streamline the incentives given its tight finances.
Panlilio said BOI computations showed that a family with a monthly income of P50,000 could only afford to buy a house worth about P2 million.
“P2 million and below would be the range of housing units that low- and middle-income families can really afford given their average salaries,” he said.
Since there is a big market for low cost mass housing worth more than P2 million, “developers will [build] with or without incentives,” he said.
Panlilio later told reporters that the BOI is mulling over limiting perks for vertical mass housing projects to those in Metro Manila, Metro Cebu, Metro Davao and other urban areas.
Also, the 2011 IPP would likely retain the rule in last year’s plan wherein mass housing projects in Metro Manila are entitled to a three-year income tax holiday (ITH), while those in “less served areas” shall enjoy a four-year ITH.
The 2011 IPP would also ease the socialized housing requirement for vertical mass housing projects, as the Subdivision and Housing Developers Association Inc. is complaining that the requirement is “unreasonable,” Panlilio said.
Under the 2010 IPP, developers of vertical mass housing projects granted incentives must develop an area for socialized housing equivalent to 20 percent of the total cost of building construction and site preparation.
Panlilio said the 20-percent requirement would be based on the prorated project cost covering units worth P2 million and below.
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