BIR exempts low-cost house owners from taxes

 

Manila, Philippines — Taking a cue from the move of the Housing and Urban Development Coordinating Council (HUDCC) to increase the cost of socialized houses, the Bureau of Internal Revenue (BIR) has issued a guideline exempting the owners of housing units from paying taxes if the house and lot cost P450,000 and below, or P180,000 for lot only.

BIR Commissioner Kim S. Jacinto-Henares issued the guideline in Revenue Memorandum Circular No. 36-2014 after the HUDCC adjusted upward the cost of socialized houses from P150,000 to P450,000.

In case of sale of lot only, the price will not exceed 40 percent of the maximum limit for house and lot package, or P180,000 of the P450,000 price ceiling, the HUDCC said.

Revenue officials justified as realistic and timely the price changes, attributing them to the rising cost of both land and construction materials.

They advised socialized housing developers to use the tax savings in upgrading the quality of dwelling units to attract more buyers.

The sale of real estate properties is subject to the six percent capital gains tax and 1.5 percent documentary stamp tax.

Socialized housing refers to housing projects of the government or the private sector for underprivileged and homeless families, including sites and services development, long term financing and liberalized terms on interest payments in accordance with the provision of Republic Act 7279.

by Jun Ramirez
Manila Bulletin I  May 15, 2014

http://www.mb.com.ph/bir-exempts-low-cost-house-owners-from-taxes/