Posted on January 17, 2011 09:56:40 PM [ BusinessWorld Online ]
MASS HOUSING projects priced higher than the new proposed ceiling should still be granted incentives in order to entice developers to address the market shortage, an industry group said in a position paper released yesterday.
Revenues foregone from income tax holidays granted to these projects can be recouped anyway from other government collections that are expected to grow if construction activity increases, the Subdivision and Housing Developers Association, Inc. (SHDA) argued in its submission to the Board of Investments (BoI), dated Jan. 13.
The group counts as members Ayala Land, Inc., Robinsons Land Corp., and SM Investments Corp.
This comes as the BoI had earlier declared it was looking at requiring developers to sell mass housing units for P2 million or less per unit if they want to qualify for incentives under the 2011 Investment Priorities Plan (IPP).
This is less than the current P3-million price ceiling and is designed to balance the administration’s priorities of making housing more affordable while at the same time collecting more taxes to address the budget deficit and shore up more funds for socioeconomic projects.
"The developers view this proposal with great concern," the SHDA said in its position paper.
Incentives for a wide price range of housing projects should be retained as market demand has not been enough to entice developers to meet the shortage, the SHDA claimed.
There is an annual demand for 913,600 housing units, and yet the industry has been unable to put up more than 200,000 units a year, the group noted.
The group went on to assure that granting tax breaks will increase construction activity and, thus, yield "non-income tax revenues...[that will] have more than compensated for the reduced income tax collections."
Taxes, anyway, can be collected from increased sales of allied industries such as construction material companies and delivery firms, the SHDA said.
More revenues will also be generated from "fees being charged for securing development permits, licenses to sell, as well as fees for transferring ownership of the property form the developer to the buyers," it said.
On top of all these, the value of properties will increase amid increased land development and this, in turn, will mean higher real property tax collections, the group added.
"Metro Manila will remain to be the largest employment center in the country and, therefore, the huge employee population will continue to require decent and affordable housing within the urban area," the SHDA said.
"The only viable way of addressing this need will be through low-cost vertical mass housing development. For the foregoing reasons," it added.
"SHDA’s position is that the P3-million price ceiling for low-cost mass housing should be retained in the 2011 IPP." -- Jessica Anne D. Hermosa