Creba Speaks
By CHARLIE A.V. GORAYEB
February 2, 2012, 2:59am
MANILA, Philippines — Starting Jan. 1 this year, real estate buyers can already enjoy added relief from value-added taxes (VAT) with the passage of BIR Revenue Regulation No. 16-2011, which effectively increases the threshold amounts for VAT-exempt transactions, as follows: (1) From P1.5 million to P1,915,500 for residential lots; and (2) From P2.5 million to P3,199,200 for house and lot packages or other residential dwellings.
Adjacent lots, even if covered by separate titles and tax declarations, can be counted together when sold to a singular buyer. This means that multiple lots sold or disposed in favor of one buyer for the purpose of utilizing them as one residential lot will be VAT-exempt for as long as the aggregate value of the sale does not exceed the P1,919,500 limit.
The lease of residential units for a monthly rent of P12,800 and below shall likewise be VAT-free. Residential units leased over P12,800 monthly is also exempt if the aggregate rental for the year does not exceed P1,919,500.
In Jan. 5, 2011, the Chamber of Real Estate & Builders Associations, Inc. (CREBA) submitted an appeal to the Housing and Urban Development Coordinating Council (HUDCC) for the adjustment of price ceilings on real estate transactions that are exempted from the payment of the 12 percent VAT.
The proposal was subsequently endorsed by the Housing Czar Vice President Jejomar C. Binay to BIR Commissioner Kim S. Jacinto-Henares.
Pursuant to Section 4.109-1(B)(p)(4) of BIR Revenue Regulation 16-2005, the present values could be adjusted every three years using inflation or the prevailing Consumer Price Index (CPI) published by the National Statistics Office (NSO) as basis.
Between 2004 and 2010, the housing sector has significantly suffered the brunt of spiraling costs of construction materials, more specifically cement and steel. Developers have no other choice but to pass this cost on to the buyers, hence, the upsurge in the price of housing packages.
During the same period, NSO and Bangko Sentral ng Pilipinas (BSP) data indicate that CPI for all items increased by as much as 50 percent, while housing and power CPI increased by 36 percent.
CREBA is grateful for the passage of this landmark issuance which opens up new and bigger opportunities for Filipino families to own a home which, in effect, will push the property industry to develop more units thereby setting the economic multiplier effects of housing as a powerful catalyst for national growth and development.
The new incentive augurs well as a win-win solution for both public and private sectors. It shall in no way reduce government’s revenue-generation efforts.
Instead, it will boost tax collection due to increased development and construction activities and ensure that the money spent on housing permeates widely in the economy and create broader benefits for the people.
By creating an environment favorable and conducive to real estate business and investments, developers will be able to build more units to address the nation’s growing housing requirements, generate additional employment opportunities and investments given the housing sector’s labor and capital-intensive nature, and spur economic activities that will transcend at least 68 allied domestic economic activities whose products and services are inevitably required for every house built.
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“A big corporation with a big heart” is just one of the many good things that could describe diversified conglomerate San Miguel Corporation for initiating the largest corporate social responsibility project for Sendong victims thus far – 5,000 homes for families left homeless by flash floods in Eastern Visayas and Northern Mindanao. This, SMC will do in partnership with Gawad Kalinga and Habitat for Humanity through a donation of R500 million.
CREBA agrees that the ultimate manifestation of revival for Sendong-stricken cities is to see its people rebuild their homes and relive their lives in safe communities.
For its part, the Chamber envisions to do its share by piloting a community development in Cagayan de Oro City with the kind and generous support of its members from all over the country.
We salute SMC Chairman Eduardo Cojuangco, Jr. and SMC President Ramon S. Ang, as well as GK and Habitat, for this noble, long-term and sustainable undertaking. No doubt, the fuel of genuine concern can only emanate from big hearts.
For comments, e-mail: creba_national@yahoo.com.
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