Pampanga Housing Market Update
The selling price of houses, which are priced P2M and above, are expected to have some adjustments this coming January 2021.
The TRAIN Law, while designed to generate additional tax revenues for the government, will impact the affordability of owning a home. A 12% VAT (value added tax) shall be charged on P2M worth homes (condos and house and lots) and those of higher prices. Normally, developers pass this on to buyers; hence, anticipate the jump on price tags.
To better appreciate the effect, let’s take an example – the cheapest one to be affected.
Regular selling price: P2M
Compute: P2,000,000 x 12% = P240,000 (VAT)
New Price: P2M + 240K = P2,240,000
The CREBA is urging lawmakers to defer the existing exemption of low-cost housing from VAT to allow more Filipinos the opportunity to own a home. CREBA stands for Chamber of Real Estate & Builders’ Associations Inc.
Wish to learn more on the basis of this house price hike? Read on Republic Act No. 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN Law):