• 
FIFTE.ENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No. 2409 
) 
) 
) 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
The Housing Finance Program aims to meet about one-third of the 
national housing needs. Private sector investment is needed .to make up the two-
thirds of the housing needs. The middle and low income level families earning 
less than One Hundred Thousand Pesos (P100,OOO.OO) per annum cannot 
purchase dwelling units, whether socialized or economic. Hence, rental housing 
is a major alternative. 
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. 
Approval of this measure to address the unmet needs for housing is 
urgently requested. 
Y EJERCITO ESTRADA 
Senator 


FIFTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINES 
) 
First Regular Session 
) 
SENATE 
Senate Bill No. 2409 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
TO PRQVIDE 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: 
SECTION 1. 
Title. 
This Act shall be known as the "Incentives for 
Rental Residential Housing by the Private'Sector Act." 
SEC. 2. Declaration of Policy. It is hereby declared the policy of the 
State to provide the basic need of shelter for the homeless low and middle-
income with the cooperation of and by providing incentives for the private sector. 
Towards the attainment of this policy, incentives private sector provided to 
promote, accelerate and enhance continuity of the public and private sector's 
cooperation to provide residential housing for rent at reasonable affordable rates. 
SEC. 3. Incentives for Rental Housing by the Private Sector. Any law 
to the contrary notwithstanding, the following incentives are hereby granted to 
encourage, promote and support the private sector to provide rental residential 
housing for low and middle-income families: 
(1) 
Exemption from the Value-Added Tax on lease of properties of 
the rentals from dwelling units covered by RA 7644 and such 
dwelling units which are hereinafter leased for residential 
housing of low and middle-income families renovation of 
existing 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 
the Local Government Code of 1991 (RA 7160), 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 RA No. 7644, the rental regulation law, 


• 
" 
up to December 31, 1997: Provided, further, That the 
exemption shall continue for five (5) years after December 31, 
1997 for as long as the rental rates imposed for the calendar 
year after 1997 are those provided for under RA No. 7644 with 
an increase of not more than twenty percent (20%), cumulative 
and compounded based on the actual rate imposed as of 
December 31, 1997 but not more than Forty Thousand Pesos 
(P40,000.00) per annum per-unit; 
(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,OOO.OO) 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 RA No. 6846, 
the Abot-Kaya Pabahay Fund, or the socialized housing 
program under Section 22 (a) of' R.A. No. 7660, the 
Documentary Stamp Tax Law, or such other Housing Financing 
for low and middle-income socialized housing programs 
provided by existing law. 
SEC. 4. 
Rules and Regulations; Monitoring and Implementation. 
Rules and regulations to implement this Act shall be promulgated by the Housing 
Development Urban Coordinating Council in consultation with the Department of 
Finance, in cases of tax exemption and tax credits and with the 'endorsement of 
national housing agencies with respect to programs for social ho'using and urban 
development. 
The implementation of this Act shall be monitored by the Housing Urban 
Development Coordinating Council 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,