SIXTEENTH CONGRESS OF THE 
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.-Senlltil 
, 
REPUBLIC OF THE PHILIPPINES ) 
~ff';' of tll,~"ftl .. ~ 
First Regular Session 
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SENATE 
S.B. No. 2148 
Introduced by Senator SONNY M. ANGARA 
'14 
FEB 27 P 6 :38 
IH;(,LlVL!/I"iY.}~ 
. AN ACT 
PROVIDING FOR HOME MORTGAGE INTEREST RELIEF FOR THE FIRST 
FAMILY HOME, AMENDING FOR THE PURPOSE SECTION 34 OF THE NATIONAL 
INTERNAL REVENUE CODE OF THE PHILIPPINES, AS AMENDED. 
EXPLANATORY NOTE 
Nothing gives a person a sense of stability and security than having a place to oall his or 
her own home. Unfortunately, due to the high cost of acquiring one's own residence, more 
Filipinos are opting to rent instead. According to an initial study conducted by the Statistical 
Research and Training Center of the National Economic and Development Authority (NEDA), 
there are approximately 1.5 million households or 7.2% renters out of the total 21.5 million 
households nationwide. 
At present, more and more developers are offering affordable housing options through 
low down payments and easy payment terms for potential home buyers. The only remaining 
deterrent faced by would-be buyers is the financing aspect, more specifically, the interest rates 
imposed by banking institutions and by these developers themselves .. This is where' the . 
government should step in by providing an incentive to those who would be purchasing their first 
family home. 
A family home provides an atmosphere of permanence, and serves as one's sanctuary 
from the outside world. Moreover, the wisdom of home ownership lies in the simple fact that 
instead of throwing away money in monthly rents, one's money can already be channelled into 
paying for one's own piece of property. Home ownership will not only ensure the future security 
of one's family but can also be considered as a profitable investment. 
Along this line, this bill aims to aid Filipino families in acquiring their first family home 
by providing for Home Mortgage Interest Relief, an individual income tax incentive. 
This tax incentive makes any interest actually paid during a taxable year from any loan 
obtained for the purpose of acquiring or constructing a family home deductible from the gross 
income of a qualified taxpayer. 
By removing. interest rates in the equation, potential 
homeowners will only have to pay the principal amount of the property, and thus avoid the stress 
of dealing with ballooning interest payments. Moreover, this relief will provide tax savings for 
the individuaL 
With the passage of this bill, it is hoped that the shortage of decent housing would be 
addressed and our countrymen would have the opportunity to have a place of their own to call 
home. The proposed bill is also a measure of equity to enable the lower classes to lead better 
lives. 
In view of the foregoing, early passage of this bill is earnestly sought. 
S 
S6'NN¥-l'IIC. ANGARA 
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SIXTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
) 
'14 
FEB 27 P 6 :38 
SENAT~ 
S.RNo. 
~148 
Introduced by Senator SONNY M. ANGARA 
AN ACT 
PROVIDING FOR HOME MORTGAGE INTEREST RELIEF FOR THE FIRST 
FAMILY HOME, AMENDING FOR THE PURPOSE SECTION 340F THE NATIONAL 
INTERNAL REVENUE CODE OF THE PHILIPPINES, AS AMENDED. 
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 "Home Mortgage Interest Relief 
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Act of2014". 
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Sec. 2. Declaration of State Policy. - It shall be the policy of the State to encourage 
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home ownership and to provide financial·assistance to Filipinos desiring to have their tirst family 
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homes. 
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Sec. 3. Definition of Terms. - For purposes of this Act, the following terms or phrases 
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shall mean or be understood as follows: 
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a. Family Home - shall refer to the dwelling house constituted jointly by the husband 
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and wife, or by an nnmanied head of the family, including the land on which it is 
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situated, and as defined under Articles 152 and 153 of Executive Order No. 209 or the 
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Family Code of the Philippines, as amended. 
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b. First Family Home - shall refer to the first dwelling house, either bought or 
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constrncted, and used as the primary residence of a family or by an unmarried head of 
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the family. 
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c. Unmarried Head of the Family - shall refer to any person, regardless of civil status, 
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who has one or more dependentls upon him for chief support. 
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d. Dependent - shall refer to any, or a combination of two or more of the following 
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persons: 
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i. A father or a mother or both; 
ii. One or more brothers or sjsters who are unmarried, not gainfully employed, and 
less than twenty one (21) years of age; 
iii. One or more legitimate, illegitimate, adopted or foster children provided that 
such children are unmarried, not gainfully employed, and less than twenty one 
(21) years of age; 
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iv. One or more siblings or children, regardless of age, who suffers from a mental 
or physical defect. 
e. Solo Parent - shall refer to any person qualified as such pursuant to Section 3(a) of 
Republic Act No. 8972 or the "Solo Parents' Welfare Act of2000". 
f. 
Qualified Mortgage Loan - shall refer to a housing loan from any reputable bank 
operating in the Philippines, including loans from the Home Development Mortgage 
Fund (HDMF) or Pag-IBIG Fund, as provided under Republic Act (RA) No. 9679, 
and cooperatives duly organized and registered with the Cooperative Development 
Authority, as provided under RA No. 9520 or the "Philippine Cooperative Code of 
2008", obtained for the purpose of purchasing or constructing a family home, and 
whose loan amount does not exceed two million and five hundred thousand pesos 
(P2,500,000). 
g. Mortgage Interest Relief - shall refer to an itemized tax deduction that allows 
homeowners to deduct the interest they pay on a qualified mortgage loan used for the 
purchase or construction of their first family home. 
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h. Qualified Taxpayer - shall refer to a taxpayer who is in good standing and has 
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obtained a housing loan for the purpose of acquiring or constructing his family home. 
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Sec. 4. Qualified Residence. - In order to be considered as the "first family home" as 
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contemplated under this Act, the following requisites must concur: 
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a. The residence being claimed as a first family home must meet the requirements set 
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under Articles 152-153 of the Family Code; 
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b. This must be the "first" family home of the taxpayer and be proven as such; 
c. The value of the subject family home must not exceed Two Million Five Hundred 
Pesos (P2,500,000); and 
d. The claimant must submit all the requisite documents to qualify under this proposal, 
such as but not limited to the notarized deed of sale, tax declaration, bank assessment, 
loan documents, Income Tax Retums (ITR) and/or Swom Statement of Assets, 
Liabilities and Networth (SALN), and other do,cuments as may be required under the 
implementing rules and regulations. 
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Sec. 5. Exceptional Circumstances. - The qualified taxpayer may still claim the 
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privilege provided under this Act ifhislher situation falls under any of the following instances: 
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a. If the qualified taxpayer is a solo parent as defined under Section 3(a) of Republic 
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Act No. 8972, otherwise known as "Solo Parents' Welfare Act 0[,2000"; 
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b. If the original family home was destroyed, either completely or substantially, due to 
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force majeure or an act of God such as but not limited to storms, floods, earthquake, 
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volcanic eruption, fire, and other forms of natural calamities, and the taxpayer 
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constructs or purchases a new residential unit; 
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c. If the original family home was lost due to a valid expropriation by the Govemment. 
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Sec. 6. Home Mortgage Interest Relief. -- Section 34 of the National Intemal Revenue 
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Code (NIRC), as amended, is hereby further amended to read as follows:: 
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"SEC. 34. Deductions from Gross Income. -
Except for taxpayers eaming 
compensation income arising from personal services rendered under an employer-
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employee relationship where no deductions shall be allowed under this Section 
other than under SUBSECTIONS (M) AND (N) hereof, in computing taxable 
income subject to income tax under Sections 24(A); 26; 27(A), (B), and (C); and 
28(A)(1), there shall be allowed the following deductions from gross income: 
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(A) Expenses. -
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XXx. 
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(M) 
Premium Payments on lIealth and/or Hospitalization 
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Insurance of an Individual Taxpayer. - XXX. 
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(N) 
HOME MORTGAGE INTEREST RELIEF. 
ANY 
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INTEREST ACTUALLY PAID DURING A TAXABLE YEAR 
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FROM ANY LOAN OBTAINED FOR THE PURPOSE OF 
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ACQUIRING 
OR 
CONSTRUCTING 
A 
QUALFIED 
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TAXPAYER'S FIRST FAMILY HOME, AS MAY BE DEFINED 
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BY EXISTING LAWS AND/OR RULES AND REGULATIONS 
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TO BE ISSUED FOR THE PROPER IMPLEMENTATION OF 
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THIS ACT." 
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Sec.7. The necessary implementing rules and regulations (IRR) for purposes of this Act 
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shall be jointly issued by the Department of Finance (DOF), the Housing and Land Use 
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Regulatory Board (HLURB), and the Bureau of Intemal Revenue (BIR), within sixty (60) days 
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from the effectivity of this Act. 
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Sec. 8. All laws, decrees, executive orders or any other issuances or parts thereof which 
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are inconsistent with the provisions of this Act are hereby repealed, amended or modified 
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accordingly. 
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Sec. 9. 
If any provision of this Act is held invalid or unconstitutional, any other 
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provision not affected shall continue to be in full force and effect. 
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Sec. 10. This Act shall take effect fifteen (\5) days after its complete publication in the 
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Official Gazette or in at least two (2) newspapers of general circulation. 
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Approved, 
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