NINETEENTH CONGRESS OF THE REPUBLIC 
)
OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. No. 469
of lljf
*22 JUL13 AlO :17
RtCEiVtiD BY:
Introduced by SENATOR JINGGOY EJERCITO ESTRADA
AN ACT
TO PROVIDE INCENTIVES FOR THE PRIVATE SECTOR TO UNDERTAKE 
RENTAL RESIDENTIAL HOUSING AT RATES AFFORDABLE TO LOW AND 
MIDDLE-INCOME FAMILIES AND FOR OTHER PURPOSES
EXPLANATORY NOTE
Renting a dwelling unit has long been a viable alternative to Filipino families 
from various income classes. According to the "Rental Control Study: Final Technical 
Report" prepared by the Philippine Statistical Research and Training Institute In 
March 2015:
• 
All families belonging to the low Income group in NCR, OHUCs and 
Other Areas, on the average, have negative savings monthly. Hence, 
they cannot afford to avail of housing loans. However, families in the 
low income group In OHUCs can still avail of the socialized housing 
program of government if they are qualified. This is also true for those 
low income families in Other Areas.
• 
The lowest rental class of Less than Php 1,000 a month reported an 
average rent of Php527 where one-fifth (20%) of the total families or 
309,287 families are involved.
• 
The second to the lowest rental class of Phpl,000-1,999 paid an 
average rent of Phpl,375 per month, where 32.2% or 497,807 families 
are involved.


• 
The rental class distribution of the rent paid by families, in general, 
shows that majority of the renters or 52.2% paid rent of less than 
Php2,000 a month in 2012.
• 
By economic group: 92.6% of the low income families pay rent of less 
than Php2,000 monthly; 59.5% among middle income group also pay 
this amount, while 21.6% among high income group also pays the 
same amount of less than Php2,000 a month.
• 
Average rent paid by NCR families is Php 3,365 per month; OHUCs 
families, Php2,277 and Other Areas, Phpl,753.
• 
Ratio of rent paid to Income In NCR is 12.4%; OHUCs, 9.8%; and 
Other Areas, 8.4%.
Clearly, there is a need for dwelling units for rent at reasonable and 
affordable rates. For the private sector to invest In housing construction which will 
be rented to the low and middle-income level families at reasonable and affordable 
rates, a program package of incentives is needed.
This measure seeks to provide incentives to private companies which 
undertake rental residential housing at affordable rates. Such incentives include 
exemption from taxes and tax credits.
The approval of this measure to address the unmet needs for housing is 
urgently requested.
A
JINGGOY E3ERC1TO ESTRADA


NINETEENTH CONGRESS OF THE REPUBLIC 
)
OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s. No. 469
;7i
of fli?
•22 JUL13 AlO :17
Rl'CEIVED OV;
Introduced by SENATOR 3INGGOY EJERCITO ESTRADA
AN ACT
TO PROVIDE INCENTIVES FOR THE PRIVATE SECTOR TO UNDERTAKE 
RENTAL RESIDENTIAL HOUSING AT RATES AFFORDABLE TO LOW AND 
MIDDLE-INCOME FAMILIES AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Title. - This Act shall be known as the "Incentives for Rental
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Residential Housing by the Private Sector Act"
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Sec. 2. Declaration of Policy. - It is hereby declared the policy of the State to
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provide the basic need of shelter for the homeless low and middle-income with the
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cooperation of and by providing incentives for the private sector.
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Towards the attainment of this policy, incentives private sector provided to
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promote, accelerate and enhance continuity of the public and private sector's
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cooperation to provide residential housing for rent at reasonable affordable rates.
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Sec. 3. Incentives for Rental Housing by the Private Sector - Any law to the
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contrary notwithstanding, the following incentives are hereby granted to encourage,
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promote and support the private sector to provide rental residential housing for low
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and middle-income families:
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(1) Exemption from the Value-Added Tax on lease of properties of the
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rentals from dwelling units covered by Republic Act No. 7644 and
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such dwelling units which are hereinafter leased for residential
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housing of low and middle-income families renovation of existing
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units into rental apartments by construction of new units or 
dwelling residential housing of low or middle-income families;
(2) 
Exemption from any local government taxes on real estate over - 
the rates of levy imposed as of the effectivity of this Act under 
Republic Act No. 7160 or the Local Government Code of 1991, to 
the extent of the tax increase arising from the increase in the 
assessed value of the property from and after the effectivity of this 
Act: Provided, That the real estate and dwelling units constructed 
thereon are covered by R.A. No. 7644, the rental regulation law, up 
to December 31, 1997;
(3) 
Tax credit of twenty-five percent (25%) of the gross rentals for five 
(5) years following the completion of the new or renovated housing 
units for rental housing for low and middle-income families earning 
less than One Hundred Thousand Pesos (P100,000.00) per annum 
at rental rates of not more than Forty Thousand Pesos 
(P40,000.00) per annum per unit necessary repairs of the rental 
units from gross income derived from rental of the units;
(4) 
Tax credit up to twenty-five percent (25%) of the contractor- 
developers professional fees earned from construction of new units 
or renovation of existing units Into apartment dwelling units for 
rental residential housing for middle and low-income families 
earning less than One Hundred Thousand Pesos (P100,000.00) per 
annum and to be rented at not more than Forty Thousand Pesos 
(P40,000.00) per annum per unit; and
(5) 
Entitlement to financing for the necessary repairs to preserve 
existing rental units, renovation of existing units to apartments for 
rental housing, or the construction of new units for rental housing 
developmental financing provision of Republic Act No. 6846, the 
Abot-Kaya Pabahay Fund, or the socialized housing program under 
Section 22 (a) of Republic Act No. 7660, the Documentary Stamp 
Tax Law, or such other Housing Financing for low and middle- 
income socialized housing programs provided by existing law.


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Sec. 4. and Regulations; Monitoring and Implementation. - Rules and 
regulations to implement this Act shall be promulgated by the Department of Human 
Settlements and Urban Development (DHSUD) in consultation with the Department 
of Finance (DOF), in cases of tax exemption and tax credits and with the 
endorsement of national housing agencies with respect to programs for social 
housing and urban development
The implementation of this Act shall be monitored by the DHSUD an annual 
report to thereof submitted to the President and Congress.
Sec. 5. Effectivity. - This Act shall take after complete publication in at least 
one (1) national newspaper of general circulation.
Approved,