A LAWMAKER wants the Department of Finance (DoF) to suspend the imposition of a 12% value-added tax (VAT) on low-cost housing — set to take effect next year — amid a coronavirus pandemic.
The tax would make it more difficult for lower and middle-income Filipinos to buy their own houses and could lead to a slowdown in the sector, Party-list Rep. Bernadette Herrera-Dy said in a statement on Sunday.
Buyers of residential lots worth as much as P1.9 million and house and lot units worth P3.2 million are exempted from the tax. By January, however, only those worth P2 million and below would be VAT-exempt.
Ms. Dy said the VAT should be suspended until the coronavirus disease 2019 (COVID-19) crisis is over. “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 added that property developers have no choice but to pass on the tax to homebuyers. “That added cost unfairly burdens people who obtain their low-cost housing units through a long-term loan.”
The Department of Human Settlements and Urban Development earlier warned that the country’s housing backlog could balloon to 22 million in two decades if the government fails to solve the housing gap. — Kyle Aristophere T. Atienza