By Luisa Maria Jacinta C. Jocson, Reporter
THE increase in the value-added tax (VAT) exemption threshold for housing will incentivize more consumers to purchase properties, according to analysts.
The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations No. 1-2024, which increases — for VAT-exemption purposes — the selling price threshold of the sale of house and lot, and other residential dwellings to P3.6 million from P3.199 million previously.
“This adjustment was made by virtue of Section 109 of the National Internal Revenue Code which mandates that every three years the subject amount should be adjusted to its present value using the consumer price index as published by the Philippine Statistics Authority,” the BIR said.
BIR Commissioner Romeo D. Lumagui, Jr. in a statement said that the adjustment shows the “just and service-oriented taxation” by the government.
Colliers Philippines Associate Director for Research Joey Roi H. Bondoc said that this new regulation will help make economic and lower mid-income residential segments more affordable to Filipinos.
“This is particularly important for households that are receiving remittances from Filipinos working abroad that fuel the demand for these residential units,” he said in an e-mail.
He said that horizontal development hubs will likely benefit from the latest revenue regulations, specifically in Bulacan, Pampanga, Tarlac, Cavite, Laguna, and Batangas.
“It will be interesting to see how developers with substantial exposure in affordable and economic housing segments will respond to this given that in the previous years we also saw the increase in land values as well as prices of construction materials,” Mr. Bondoc added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the increased threshold would encourage more residential property sales.
“Definitely, this would encourage more residential property sales as partly incentivized by the tax exemption with the higher threshold.
“Increased sales and tax collection would somewhat offset the higher threshold for the tax exemption on residential property sales,” he added.
