HOUSE NF REPRESENTATIVES

Republic of the Philippi EIVED

public of the Philippines :

HOUSE OF REPRESENTATIVES #709 AUG 2016
Quezon City Tie [LO omy

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ISTRATION UNIT

S AND NDE X SERVICE

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. 27.10

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

EXPLANATORY NOTE

The past few years saw a construction boom in the housing sector, not
just in Metro Manila, but the entire country. In Metro Manila, condominium
buildings and housing projects are rising, from the posh skyscrapers in
emerging business districts to the mid and low rise edifices in the old and low
end residential enclaves. Outside of Metro Manila, residential subdivisions
and communities, catering to varying family income brackets, are being
developed.

This construction boom has been one of the elements fueling the slow
but steady rise in economic activity. This is generating a lot of business for
construction and real estate companies, and of course the banking and
financial institutions. More important, it has been providing trickle down
effects to the poorest of the poor by providing employment for construction
and other related workers.

Amidst this construction boom, however, it still cannot be gainsaid that
the ordinary, low to mid income earning family groups, are benefiting. This
is in terms of finally acquiring their “dream” first home. The home they would
want to truly call their own.

First, the actual cost of a house and lot or even a just a small
condominium or unit in a housing project, is still very expensive. The price of
even the cheapest real estate remains to be too steep for the common tao.

Moreover, the financing cost of such acquisition is staggering. And, this
is without even factoring the loan charges, service fees and penalties imposed
on the loan contracts.

Finally, every acquisition of real estate entails the burden of tax
payments. These include, among others, payment of the value added tax,


documentary stamp tax, local taxes and registration fees. And of course, the
payment of realty tax with the local government.

This measure is being introduced to make the first time acquisition of
the family home easier and affordable.

This bill makes the actual cost of first time home purchase cheaper by
enticing construction, development and real estate companies to sell their
housing units at a discount. If these companies grant a discount of a minimum
of Five Percent (5%) of the prevailing sale value of their real estate units to
first time home buyers, they may claim the financial loss on the discount
granted as a tax deduction.

Moreover, the loan financing shall also include only minimum
collateral, equity or downpayment of five percent (5%) or less, of the
acquisition cost. It shall also include accessibility, reasonable repayment
terms, expeditious loan documentation and processing procedures.

As an additional benefit, a solo parent, shall be entitled to an additional
Five Percent (5%) discount from the reduced financing cost. The solo parent
shall likewise be granted a more flexible payment terms of the amortizations
on the loan,

Finally, this bill grants first time home buyers exemption from payment
of any and ail taxes due for the purchase. The buyer shall likewise enjoy a tax
holiday from realty and other local taxes due for three (3) years.

It has been always been the sworn goal of the government to alleviate
the condition and welfare of a majority of the Filipino families, especially
those who are in need of the basic need of shelter.

With this measure, such goal can be partly achieved. It would make it
easier and affordable, especially to low and middle income groups, to finally
acquire the dream home they may call their own. As an incidental effect, this
bill would further fuel the construction boom which would become the
catalyst of economic growth and development. It would strengthen, promote
and support the component activities of housing production and finance.
Finally, it would increase private sectors' participation in the investment of
their funds into housing finance, construction and development. -

It is in this view that the immediate passage of this bill filed as House
Bill No. 414 in the Sixteenth Congress by the undersigned, is’earnestly sought.

Pia aps VAP

Representative


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

House Bill No. _2710

INTRODUCED BY REPRESENTATIVE ARTHUR C. YAP

AN ACT
MAKING FIRST-TIME HOME OWNERSHIP EASIER AND MORE
AFFORDABLE BY MAKING THE COST OF THE PURCHASE
CHEAPER, REDUCING THE FINANCING COST, EXEMPTING THE,
PURCHASE FROM TAXATION, ENHANCING PRIVATE SECTOR
PARTICIPATION IN HOUSING CONSTRUCTION AND FINANCING,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and the House of Representatives of the

Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the “First-Time

Homebuyers Act”.
SECTION 2. Declaration of Policy. — It is the State’s policy to:

a) Alleviate the condition and welfare of Filipino families especially

in their basic need of shelter;

b) Make available affordable and decent housing, especially to low and

middle income families;

c) Recognize the role of housing development as a catalyst of

economic growth and development;

d) Strengthen, promote, and support the component activities of

housing development and finance;


e) Encourage greater private sector participation and investment in

housing development and finance.

SECTION 3. First-Time Homebuyer Defined; Incentives, How
Availed. — For purposes of this Act, a “first-time homebuyer” refers to any
natural person who, for the first time, purchases a house and lot or
condominium unit or constructs a house on a land he/she owns and who

intends to occupy the same as his/her principal place of residence.

The incentives for a first-time homebuyer may be availed of for the
purchase of a housing package or the construction of a house falling under the
category of low-cost housing and medium cost housing as determined by the
Housing and Urban Development Coordinating Council (HUDCC) and the
National Economic and Development Authority (NEDA).

SECTION 4. Exemption of First-Time Home Purchase from
Transfer Tax. — Any provision of law to the contrary notwithstanding, upon
the effectivity of this Act, a first-time homebuyer shall be exempted from

payment of the transfer tax due from the first-time home purchase.

SECTION 5. Tax Credit for First-Time Homebuyers. — Upon the
effectivity of this Act, a first-time homebuyer shall be entitled to a non-
transferable tax credit equivalent to ten percent (10%) of the total amortization
actually paid for the year preceding the availment of the tax credit, for the
whole term of the loan from the date of acquisition of the house and lot or
condominium unit or from the date of the construction of the house intended
as the principal place of residence until full payment of the housing loan

applied for the purchase or the construction.

In claiming the tax credit, the first-time homebuyer shall file his return
along with the following documents, to wit:
a) acopy of:
i. the deed of absolute sale or contract to sell or
ii. the contract of work for the design or construction of the house

and the purchase order of the housing construction materials, as


well as the official receipts for labor or materials expenses
incurred in the construction of the house,
whichever is applicable;
b) housing loan and mortgage agreement;
c) tax declaration;
d) other similar documents employed in closing the purchase;
e) official receipts representing full payment or amortization for the
preceding year; and
f) a certification for a first-time homebuyer issued by the HUDCC in

accordance with Section 8 of this Act.

A natural person who has bought a house and lot or condominium unit
or who has constructed a house prior to the effectivity of this Act and who
actually lives in the property as his/her principal place of residence but who
has not yet fully paid all the amortization due on the housing loan shall be
considered as a first-time homebuyer within the contemplation of this Act and
shall be entitled to the tax credit provided herein to the extent of the unpaid
amortization. In claiming the tax credit, utility billing statements shall be

submitted as additional requirements.

SECTION 6. Discount for First-Time Home Purchase; Incentive for
Granting a Discount. - Any natural or juridical person registered as owner
ofa land subject ofa subdivision or a condominium project, or who is a dealer
directly engaged as a principal in the business of buying and selling real estate,
or who is real estate developer engaged in the business of developing and
selling real estate projects for his/her or its own account and any natural or
juridical person engaged as a contractor doing housing design and
construction or engaged in the business of selling housing construction
materials that grants a minimum discount of five percent (5%) to first-time
homebuyers may claim the financial loss on the discount granted as a tax
deduction: Provided, That the cost of the discount shall be allowed as
deduction from the gross income for the same taxable year that the discount
is granted: Provided, further, That the total amount of the claimed tax

deduction net of value added tax, if applicable, shall be included in their gross


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sales receipts for tax purposes and shall be subject to proper documentation

and to the provisions of the National Internal Revenue Code, as amended.

SECTION 7. Disclosure of First-Time Homebuyers Benefits. -
To ensure buyer awareness on the benefits of this Act, any owner, dealer, or
real estate developer, and any contractor doing housing design and
construction or anyone engaged in the business of selling housing
construction materials shall provide a first-time homebuyer a disclosure
statement of the discount that may be granted, as well as the transfer tax
exemption and tax credit such buyer is entitled to under this Act in the
reservation contract, application to purchase, deed of absolute sale or contract
to sell and other similar documents employed in the negotiation of the
purchase or in the contract of work for the design or construction of the house
or in the purchase order of the housing construction materials. The first-time
homebuyer shall also be provided the schedule of payment of installments or
amortization until full payment of the purchase price.

SECTION 8. Additional Benefit for Solo Parents, — Solo parents as
defined under Republic Act No. 8972, who are likewise First Time Home
Buyer shall be entitled to an additional Five Percent (5%) discount from the
reduced financing cost under Section 4 of this Act. The solo parent shall
likewise be granted a more flexible payment terms of the amortizations on the

loan.

SECTION 9. First-Time Homebuyers Information System;
Information Drive. The HUDCC, with the assistance of the Land Registration
Authority (LRA), Home Development and Mutual Fund (HDMF), and the


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Bangko Sentral ng Pilipinas (BSP), shall establish within ninety (90) days
from the issuance of the Implementing Rules and Regulations of this Act a
database of the names of all individuals who have availed of a housing loan
and of registered owners of residential properties. This database shall be
managed by the HUDCC which shall serve as the clearinghouse in the
issuance of a certification for a first-time homebuyer. The Bureau of Internal
Revenue (BIR), in extending tax credit to a first-time homebuyer upon the
effectivity of this Act, shall share all relevant information and data on a

periodic basis and make such data available to the HUDCC

The HUDCC is hereby mandated to conduct a continuing information
drive about the provisions of this Act which shall be translated and be made
available in major regional dialects and shall be posted on the website and in

conspicuous public places, including barangay halls.

SECTION 10, Penalties for Violations. — Any person who makes a
material misdeclaration of statement, misrepresentation in any certification,
or fraudulent act in connection with the application for a tax credit under
Section 5 of this Act or falsifies any document submitted to obtain a tax credit
shall be punished with a fine of not less than Five Thousand Pesos
(Php5,000.00) but not more than Fifty Thousand Pesos (Php50,000.00), or
imprisonment of not less than six (6) months or both, without prejudice to the

prosecution of said offender under the Revised Penal Code.

Any tax credit issued based on materially false information shall be null
and void without need for any further action and shall be automatically

revoked.

Any person who makes a material misdeclaration of statement,
misrepresentation in any certification, or fraudulent act in connection with the
claim for a tax deduction under Section 6 of this Act or falsifies any document
submitted to obtain a tax deduction shall be punished with a fine of not less
than Five Thousand Pesos (Php5,000.00) but not more than Fifty Thousand

Pesos (Php50,000.00), or imprisonment of not less than six (6) months or


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both, without prejudice to the prosecution of said offender under the Revised
Penal Code.

Any public official or employee who tolerates or abets the commission
of the abovementioned acts in connection with the application for a tax credit
shall likewise be punished with a fine of not less than Five Thousand Pesos
(Php5,000.00) but not more than Fifty Thousand Pesos (Php50,000.00), or
imprisonment of not less than six (6) months or both, without prejudice to the

prosecution of said public official or employee under the Revised Penal Code.

Any person who violates Section 7 of this Act shall suffer the following
penalties:

a) For the first violation, a fine of not less than Fifty thousand pesos
(Php50,000.00) but not exceeding One hundred thousand pesos
(Php 100,000.00) or imprisonment of not less than six (6) months but not.
more than two (2) years or both; and

b) For any subsequent violation, a fine of not less than One hundred
thousand pesos (Php100,000.00) but not exceeding Two Hundred
Thousand Pesos (Php200,000.00) or imprisonment for not less than two

(2) years but not more than six (6) years or both.

If the offender is an alien or a foreigner, he shall be deported

immediately after service of sentence without further deportation proceedings.

Upon filing of an appropriate complaint, and after due notice and
hearing, the proper authorities may also cause the cancellation or revocation
of the business permit, permit to operate, franchise and other similar privileges

granted to any business entity that fails to abide by the provisions of this Act.

SECTION 11. Appropriations. — The amount necessary for the initial
implementation of the First-Time Homeowners Information System under
this Act shall be charged against the current year’s appropriation of the
HUDCC. Thereafter, the funding needed for the continued development,
maintenance and full implementation of the system shall be included in the

General Appropriations Act.


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SECTION 12. Formulation of Implementing Rules. — Within sixty
(60) days after the effectivity of this Act, the HUDCC, DOF, BIR, NEDA,
DOJ, LRA, SSS, GSIS, HDMF, BSP shall be constituted into an Inter-Agency
Committee mandated to issue the Implementing Rules and Regulations of this

Act.

SECTION 13. Separability Clause. — If any provision of this Act, or
any parts thereof, is declared unconstitutional, the same shall not affect the

validity and effectivity of the other portions.

SECTION 14. Repealing Clause. — All laws, executive orders,
presidential decrees, proclamations, rules, regulations, issuances and
enactments of parts thereof inconsistent with this Act are hereby repealed or

modified accordingly.

SECTION 15. Effectivity, — This Act shall take effect fifteen (15) days
from its complete publication in the Official Gazette of in a newspaper of

general circulation in the Philippines, whichever comes earlier.

APPROVED.