House panel OKs tax exemption for first-time home buyers

The House committee on ways and means has approved a bill seeking to reduce the burden on first-time homebuyers.

The panel, chaired by Marikina City Rep. Romero Quimbo, endorsed for plenary approval the proposed “First-Time Homebuyers Act” authored by Bohol Rep. Arthur Yap.

Earlier, the House committees on housing and urban development and on appropriations – chaired by Negros Occidental Rep. Alfredo Benitez and Davao City Rep. Isidro Ungab, respectively – passed the measure.

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 measure grants first-time homebuyers exemption from payment of transfer tax due from their home purchase.

It also provides for a discount for first-time home purchase and incentive for granting a discount to a homebuyer.

The bill 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.”

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, will be included in their gross sales receipts for tax purposes and will be subject to proper documentation and to the provisions of the National Internal Revenue Code, the bill states.

Yap said his bill aims to enable the government to achieve its sworn goal to alleviate the condition and welfare of most Filipino families, especially those who have the basic need for shelter.

Source: Philippine Star