GUEST COLUMNIST
By Charlie A. V. Gorayeb
The Chamber of Real Estate & Builders’ Associations, Inc., (CREBA) is renewing its appeal to the finance department and the commissioner of internal revenue for the suspension of planned increases in zonal values of properties across the country as it continues to reel under a state of calamity as an effect of the global Covid-19 pandemic.
CREBA is cognizant of measures enforced by the past administration towards fiscal and economic stability. But undeniably, three years into the pandemic, the Philippine economy continues to contract. Consumption has yet to jump back up and unemployment in various sectors remain high.
The construction and real estate industries have particularly suffered tremendously. Affected buyers are defaulting on their mortgages or are failing to pay their monthly amortizations leaving no other recourse for developers, sellers and banks but to repossess the properties. With property prices on a standstill due to low demand despite increased inflation, taxes on property transfers no longer reflect the true and actual values of house and lot purchases. Add to that the spiraling costs for construction.
Businesses have no choice but to absorb additional expenses if only to ensure the safety and well-being of their employees in a bid to operate at full capacity. This is especially true for construction projects, including housing and real estate development, which are labor-intensive.
It is in this light that the industry appeals that zonal values of properties across the country remain at pre-pandemic levels and that no increase be implemented during the time the country remains in a state of calamity due to Covid-19. This would allow the zonal value to reflect the actual valuation of property given the stagnation of property values and demand due to the pandemic. This would also allow developers and property owners to keep expenses related to payment of taxes at a reasonable level.
Additionally, CREBA is renewing its earlier petition for the freezing of real property taxes for at least two years, and that other sources, such as the total abating of corruption across all government levels, be prioritized in raising fiscal coffers instead of imposing additional property-related taxes at both national and LGU levels.
It must be emphasized that taxes paid by developers form part of production cost that are ultimately passed on to home buyers. Thus, freezing RPT will support the millions of homeless Filipinos and boost their capacity to acquire decent housing packages which has been made more crucial by our terrible Covid experience.
Extending temporary administrative relief can alleviate some of the pressures on the real estate, housing and construction industries as well as on the many property buyers of hopefuls who are severely affected by this pandemic.