THE House Committee on Ways and Means has approved tax incentives for first-time homebuyers, according to the House Media Relations Service.
The committee, in a hearing presided by its vice chairman Rep. Raneo E. Abu (2nd District, Batangas), approved the tax provisions of the unnumbered substitute bill to House Bill 414, principally authored by Rep. Arthur C. Yap (3rd District, Bohol) titled “First-Time Homebuyers Act.”
The bill seeks to make first-time home ownership easier and more affordable by making the cost of purchase cheaper, reducing the financing cost, granting tax incentives for the purchase, and enhancing private-sector participation in housing construction and financing.
The substitute bill was earlier approved and subsequently referred to the Committee on Ways and Means by the Committees on Housing and Urban Development chaired by Rep. Alfredo B. Benitez (3rd District, Negros Occidental) and on Appropriations chaired by Rep. Isidro T. Ungab (3rd District, Davao City).
The committee approved a provision in the bill that grants first-time homebuyers exemption from payment of transfer tax due from their home purchase.
Another tax provision in the bill approved by the panel provides for a discount for first-time home purchase and incentive for granting a discount to a homebuyer.
The provision provides that “any natural or juridical person registered as owner of a land subject of a subdivision or a condominium project, or who is a dealer directly engaged as a principal in the business of buying and selling real estate, or who is real estate developer engaged in the business of developing and selling real estate projects for his or her or its own account and any natural or juridical person engaged as a contractor doing housing design and construction or engaged in the business of selling housing construction materials that grants a minimum discount of five percent to first-time homebuyers may claim the financial loss on the discount granted as a tax deduction.”
Also, the cost of the discount shall be allowed as deduction from the gross income for the same taxable year that the discount is granted.
The total amount of the claimed tax deduction net of value added tax, if applicable, shall be included in their gross sales receipts for tax purposes and shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.
Yap said his bill aims to enable the government to achieve its sworn goal to alleviate the condition and welfare of a majority of Filipino families.
“With this measure, such goal can be partly achieved,” Yap said. “It would make it easier and affordable, especially to low- and middle-income groups, to finally acquire the dream home they may call their own. As an incidental effect, the bill would further fuel the construction boom, which would become the catalyst of economic growth and development. It would strengthen, promote and support the component activities of housing production and finance. Finally, it would increase private sector participation in the investment of their funds into housing finance, construction and development.”
The substitute bill refers to a first-time homebuyer as “any natural person who, for the first time, purchases a house and lot or condominium unit or constructs a house on a land he/she owns and who intends to occupy the same as his/her principal place of residence.”
The incentives for a first-time homebuyer may be availed of for the purchase of a housing package or the construction of a house falling under the category of low-cost and medium-cost housing as determined by the Housing and Urban Development Coordinating Council (HUDCC) and the National Economic and Development Authority (NEDA).
The bill declares it is the state’s policy “o alleviate the condition and welfare of Filipino families, especially in their basic need of shelter; make available affordable and decent housing, especially to low and middle income families; recognize the role of housing development as a catalyst of economic growth and development; strengthen, promote and support the component activities of housing development and finance; and encourage greater private sector participation and investment in housing development and finance.”
To ensure buyer awareness on the benefits of the Act, any owner, dealer or real estate developer and any contractor doing housing design and construction or anyone engaged in the business of selling housing construction materials shall provide a first-time homebuyer a disclosure statement on the discount that may be granted and the transfer tax exemption and tax credit such buyer is entitled to under the Act in the reservation, contract, application to purchase, deed of absolute sale or contract to sell and other similar document employed in the negotiation of the purchase or in the contract of work for the design or construction of the house or in the purchase order of the housing construction material.
The first-time homebuyer shall also be provided the schedule of payment of installments or amortization until full payment of the purchase price.
Any person who makes a material misdeclaration of statement, misrepresentation in any certification, or fraudulent act in connection with the application of a tax credit or with a claim for a tax deduction shall pay a fine of P5,000 to P50,000, or face imprisonment of six months, or both, without prejudice to the prosecution of said offender under the Revised Penal Code.
Any public official or employee who abets or tolerates such wrongdoing shall suffer the same penalty.