Housing slowdown looms

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    The Chamber of Real Estate & Builders’ Associations Inc. (CREBA) has appealed for the deferment of the imposition of value-added tax (VAT) on housing purchases when the exemption is lifted by the end of the year.

    The group made this call in the wake of a possible massive housing slowdown due to the new coronavirus disease 2019 pandemic which had made it difficult for low-income earners to acquire homes.

    The group bats for a fixed, low-interest, long-term housing loans assistance by government for homebuyers.

    CREBA said when obtained through a long-term loan, the 12 percent VAT of about P360,000 for a P3.2 million home actually translates to P1 million over a 30-year mortgage life.

    The three-year reprieve from VAT payment was made possible by Republic Act No. 10693 or the Tax Reform for Acceleration and Inclusion on lots up to P1.9 million and for house and lot units up to P3.2 million. The cap will be reduced to P2 million come January 2021.

    CREBA said the housing backlog stands at about 6.57 million units, with supply and demand gap getting wider by 300,000 units every year.