BoI relaxes vertical housing requirements

MANILA, Philippines — The Board of Investments (BoI) has relaxed the amount of donation that a vertical mass housing developer must allocate to comply with the requirements for income tax holiday eligibility purposes.

This was contained in the recently approved guidelines on “Compliance of Vertical Housing Projects with the 20% Socialized Housing Requirement.”

Under the 2011 Investment Priorities Plan, all registered vertical housing projects are required to develop an area for socialized housing, which is equivalent to 20 percent of its total construction cost.

The guidelines has identified the modes investment scheme and direction participation scheme – by which developers may comply with the requirement.

Under the investment scheme, a developer shall develop a socialized housing project with a total floor or home lot area equivalent to 20 percent of total saleable area of its BoI-registered project.

Under the participation scheme, a developer shall make a contribution to an accredited NGO/institution engaged in socialized housing and community development projects in the amount equivalent to 30 percent of the 20 percent of building construction cost of its BoI-registered project, or 40 percent of its income tax holiday, at the option of the BoI-registered developer.

The BoI has decided to reduce the amount from 20 percent of total building construction cost of the registered project to 30 percent of the 20 percent of building construction after various vertical mass housing developers have complained that the 20 percent of building construction cost requirement was so expensive for any developer to comply.

Developer also chose this “contribution” or “donation” mode of compliance because it is less cumbersome to implement.

A developer may opt to comply with the requirement on a staggered basis, subject to fulfillment of certain conditions.

In relaxing this preferred compliance mode, the BoI expects more registered mass housing developers to comply with the requirement faithfully.

In addition, the BoI has also approved the Guidelines for Accreditation of NGOs/Foundations Engaged in Socialized Housing and Community Development Projects.

Only accredited institutions shall be authorized to receive contributions from registered developers.

The 20 percent socialized housing requirement for vertical mass housing projects was first implemented in the 2010 IPP in line with the BoI’s thrust of helping to address the housing backlog in the country of 3.7 million units.

Mass housing developers are entitled to three-year ITH for projects located in the National Capital Region and four years ITH for those located outside NCR.

Mass housing projects, which continued to be listed in the 2011 IPP, now account for a sizeable share of the total investments registered with the BoI.

Earlier, the BoI has granted income tax holiday to seven projects worth over P1.64 billion comprising mostly of mass housing developments led by Filinvest Land Inc. and Robinsons Land Corp.

Based on the project approvals, the BoI approved three projects of Filinvest Land and the Escalades project of Robinsons Land and another housing project by Communities Iloilo requirementsInc. The BoI also approved Xurpas Inc., a software developer, and cold storage facility of Hightower Storage and Trading Centre, Inc.