Senator Juan Edgardo “Sonny” Angara has filed a bill that grants a tax incentive for first-time home buyers in the form of home mortgage interest relief.
Angara’s Senate Bill No. 2148 seeks to provide for home mortgage interest relief, an individual income tax incentive, which allows homeowners to deduct the interest they pay on a qualified mortgage loan used for the purchase or construction of their first family home.
“Nothing gives a person a sense of stability and security than having a place to call his or her home” Angara said.
He said at present, more and more developers are offering affordable housing options through low down payments and easy payment terms for potential home buyers.
”The only remaining deterrent faced by would-be buyers is the financing aspect, more specifically the interest rates imposed by banking institutions and by these developers themselves,” the lawmaker said.
“This is where the government should step in by providing an incentive to those who would be purchasing their first family home,” he added.
Angara said that by removing interest rates in the equation, potential homeowners will only have to pay the principal amount of the property, and thus avoid the stress of dealing with ballooning interest payments,” he explained.
Angara, chair of the Senate committee on ways and means, said that aside from providing tax savings, the proposed measure also aims to promote home ownership by encouraging families to purchase their own property instead of renting.
The neophyte senator noted that due to the high cost of acquiring one’s own residence, more Filipinos are opting to rent instead.
“The wisdom of home ownership lies in the simple fact that instead of throwing away money in monthly rents, one’s money can already be channeled into paying for one’s own piece of property. Home ownership will not only ensure the future security of one’s family but can also be considered as a profitable investment,” he said.
Under the bill, qualified residence must be the first family home of the taxpayer wherein the value of the subject family home must not exceed P2.5 million.
A qualified taxpayer may still claim the privileges under the measure if he/she is a solo parent, and if the original family home was destroyed due to force majeure or was lost due to a valid expropriation by the government.
The claimant must submit all the requisite documents to qualify under this proposal, such as but not limited to the notarized deed of sale, tax declaration, bank assessment, loan documents, income tax returns and/or sworn statement of assets, liabilities and net worth, and other documents as may be required under the implementing rules and regulations.
The bill would amend for the purpose Section 34 of the National Internal Revenue Code of the Philippines.
“With the passage of this bill, it is hoped that the shortage of decent housing would be addressed and our countrymen would have the opportunity to have a place of their own to call home. The proposed law is also a measure of equity to enable the lower classes to lead better lives,” Angara said. (PNA)