The Chamber of Real Estate and Builders’ Associations Inc. (CREBA) is asking the Bureau of Internal Revenue (BIR) to suspend the imposition of value-added tax on law-cost housing scheduled to take effect next year.
Low cost housing units gets the three-year reprieve under the Tax Reform for Acceleration and Inclusion law but this will expire by December.
Under the TRAIN law, buyers of residential lots amounting to P1.9 million and house and lot units worth P3.2 million are exempt from payment of VAT.
With the implementation of the TRAIN Law starting next year, only those property amounting to P2 million and below would be exempted from VAT.
CREBA said that Filipinos are still reeling from the pandemic and they are still in a wait and see attitude before deciding to purchase the housing units while others lost their jobs, the imposition of the law will eventually increase the price of low-cost housing since developers will just pass on the VAT to homebuyers.
CREBA said that the 12 percent VAT will translate to additional P360,000 for a P3.2 million worth of housing unit.
This is an additional burden to the people as the housing backlog in the country was placed at 6.7 million units and increasing by 300,000 units every year.