BoI seeks compromise on mass housing perks
The Board of Investments will do its best to convince the Department of Finance to settle for a compromise on the value of housing units entitled to incentives, from the original P3 million to P2.5 million.
“The limits (on the value) went to the Cabinet, so that’s being evaluated there. But we’ll still try to convince the DoF to go with the P2.5 million,” BoI managing head Cristino Panlilio told reporters.
Under the 2010 Investment Priorities Plan (IPP), mass housing units worth a maximum of P3 million are entitled to tax breaks: three years for those in the National Capital Region and four years for those outside the NCR.
For the 2011 IPP, however, the BoI proposed that the coverage be reduced to housing units valued at P2.5 million and below. This was staunchly opposed by groups such as the Subdivision and Housing Developers Association Inc. (SHDA), which wanted the limit of P3 million retained.
The Housing and Urban Development Coordinating Council sided with the housing developers on the P3-million limit retention.
The DoF, however, wanted to strike the mass housing sector out of the 2011 IPP altogether.
In a separate interview, Vice President and HUDCC chairman Jejomar Binay said the government agency was just grateful that mass housing was still included in the draft 2011 IPP as a priority sector.
Panlilio said the 2011 IPP was ready for signing. The remaining contentious issue was the value of mass housing units to be granted perks.
In an earlier interview, he related that the National Economic and Development Authority had accepted the P2.5-million mass housing cost cap that the BoI believed was the appropriate amount for such projects to qualify for tax incentives under the IPP.
“Statistically, (P2.5 million) is the price that can be considered mass, affordable housing. It’s what can be considered by 80-90 percent of the working population to be affordable housing. It’s what we believe will benefit the mass to middle market,” he said.
During the consultations for the 2011 IPP in early January, housing developers lodged fierce opposition against the BoI’s proposal to reduce the cost cap for mass housing units.
Even then, without having a concrete figure for the new cost cap, Panlilio said P3 million was simply too high a price for mass housing units.
In a position paper submitted to the BoI in mid-January, the SHDA said there was a shortage of housing units in the country, and reducing the cost ceiling to qualify for incentives might exacerbate this.
“The developers view this proposal with great concern,” the paper stated, adding that the P3-million cap should be maintained in this year’s IPP.
Among SHDA’s members are large developers Ayala Land Inc., Robinsons Land Inc., and SM Development Corp., all of which are aggressively rolling out housing units that would serve the needs of the mass and middle markets.
These pronouncements, however, failed to sway the DoF, which wanted mass housing taken out of the IPP.