Bagong Henerasyon party-list Rep. Bernadette Herrera on Sunday urged the Department of Finance to consider the suspension of the looming imposition of 12-percent value-added tax on low-cost housing while the country is still reeling from economic toll brought about by the coronavirus disease-19 (COVID-19) pandemic.
She backed the plea of the Chamber of Real Estate & Builders’ Associations Inc. to suspend the VAT on low-cost housing that shall take effect on Jan. 1, 2021 under Republic Act 10963 or Tax Reform for Acceleration and Inclusion law.
“We are hoping that the DOF, led by Secretary Carlos Domiguez III, will find a way to help low-cost housing developers and buyers by directing the Bureau of Internal Revenue to suspend the VAT on the sector until this public health crisis is over,” she said.
The suspension will also provide the country’s real estate and housing industry the much-needed economic stimulus to fully and immediately recover from the effects of the pandemic,” she added.
The low-cost housing has been given a three-year reprieve from VAT payment under theTRAIN law until Dec. 31.
Based on the 2011 consumer price index, the TRAIN law exempted a buyer of a residential lot worth up to P1.9 million and house-and-lot unit up to P3.2 million from payment of VAT.
By January next year, only those worth P2 million and below would be VAT-exempt.
The party-list lawmaker warned that the imposition of VAT on low-cost housing could
make it more difficult for lower middle-income Filipinos to achieve their dream of buying their own home.
“Many Filipinos who were forced to defer plans to buy homes due to the pandemic would suffer the brunt of the VAT on low-cost housing.” she said.
The 1987 Constitution recognizes housing as a basic human right, she added.
“The right to adequate housing ensures that people enjoy physical and mental health and live in a safe place in peace and dignity,” she cited.
“With COVID-19, making homes in decent and safe communities is not only necessary but a matter of survival,” she said.
“Unfortunately, real estate developers have no choice but to fully pass on VAT to homebuyers. That added cost unfairly burdens people who obtain their low-cost housing units through a long-term loan,” she noted.