2022 SIPP retains tax perks for mass housing projects

The Subdivision and Housing Developers Association, Inc. (SHDA), the largest alliance of private housing developers in the country, said the retention and inclusion of mass housing activities in the 2022 Strategic Investments Priority Plan (SIPP) will help address the housing backlog and facilitate domestic economic recovery.

An economic activity that is listed in the SIPP will be entitled to a juicy package of tax and non-fiscal government incentives once projects are registered with any of the state-run investment promotion agencies (IPAs).

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In a statement, SHDA National President May Rodriguez said that the retention of their sector in the 2022 SIPP will “ensure that incentives will be extended for participating stakeholders in mass housing activities to help address the housing backlog and facilitate economic recovery.”

The 2022 SIPP, the first listing under the CREATE Law that replaced the old Investment Priorities Plan, continues to cover the development of mass housing units based on a specific price ceiling as part of the incentivized priorities of the country. It also covers in-city-low-cost dwelling projects for lease/rent. For National Capital Region, only in-city low-cost dwellings for lease/rent may qualify for registration.

Memorandum Order No. 61 series of 2022 – Approving the 2022 SIPP – lists the priority economic and business activities that can avail of investment incentives under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act. It adopts the 2020 Investment Priorities Plan (IPP) as Tier I — the base structure for the Philippine development. It also determines products or services that are not locally produced for consideration for Tier 2, and it identifies high technology activities critical to transforming the economy and attracting technology investments for Tier 3.

Rodriguez said that including mass housing under Tier 1 of the 2022 SIPP is a step to boost the housing sector and address the housing backlog.

“SHDA advocates ensuring the retention and amplification of incentives for mass housing. And the inclusion of the housing sector in the 2022 SIPP is an important move to provide housing at the price point to clear the housing backlog,” said Rodriguez.

Rodriguez reiterated that granting incentives for the private sector who will participate in housing activities directly impacts housing production and supply as this will ensure their greater participation in the production of affordable housing.

She also mentioned that this newly approved plan would promote a competitive and resilient economy.

“Another positive impact of this is the economic multiplier effect of 3.14 times of housing on the economy. It will generate economic activities in the many industries attached to the housing sector and creates corresponding employment which can address as much as 5 percent of the country’s total employment requirements,” Rodriguez stated.

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Green housing, smart cities, and smart communities are all eligible for incentives. However, according to Rodriquez, there is still a need to create guidelines and criteria for identifying what can be considered “smart housing and smart communities.”

“Government and the private sector will have to develop specific guidelines and characteristics for smart housing and communities. But by incorporating the efficiencies from technological and building innovations with the fruits of green initiatives, our keywords are affordability, resilience, sustainability, and livability,” Rodriguez said.

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The article was originally published in Manila Bulletin and written by Bernie Cahiles-Magkilat.

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