IT may become even more expensive for the poor to access affordable housing units if the government finally updates the Schedule of Market Values (SMVs) under the TRAIN 3, according to the National Housing Authority (NHA).
On the sidelines of Balai Talakayan, NHA Regional Manager and Head for Operations Victor C. Balba told the BusinessMirror that if SMVs are updated, the NHA will require a higher budget to acquire land where low-cost housing can be built.
While the government is currently subsidizing the cost of construction, the result of higher SMVs could either be an increase in subsidy or cost of the housing unit, depending on the result of the discussions.
“It’s possible [that low-cost housing costs will increase]. Actually [low cost housing prices] have increased, although the government is subsidizing the cost. Construction cost is expensive, but the transfer cost to the beneficiary is not,” Balba said.
This will mean that NHA needs to have a bigger budget, and adjustments must be made regarding the amount of subsidy it provides to poor families availing themselves of low-cost housing.
NHA Resettlement and Development Services Department Manager Elsie Trinidad said discussions are ongoing regarding the updating of the government subsidy for low-cost housing.
Trinidad said the last time the subsidy of P35,000 was updated was when the low-cost housing units still cost P240,000. Under this arrangement, the government deducts P35,000 from the cost of each unit, leaving P205,000 as the amount needed to be recouped from the beneficiary.
Currently, constructing low-cost housing units requires P500,000, more than double the cost of the initial estimate of P240,000.
“Even with the construction cost being provided us, we are updating [the land values]. [This is being] provided by the DBM [Department of Budget and Management] although the government subsidy is increasing,” Balba said.
Outdated values
On Monday, the Department of Finance (DOF) said provinces and cities are losing an estimated P30.5 billion in total forgone revenues as a result of outdated real-property values.
Acting Deputy Executive Director Jose Arnold Tan of the DOF’s Bureau of Local Government Finance (BLGF) said cities could have collected as much as P23.077 billion in incremental revenues from real-property taxes.
Provinces, meanwhile, could have gotten as much as P7.379 billion more if their SMVs were already updated and in sync with international standards.
Such reforms in the real-property tax system constitute Package 3 of the Duterte administration’s comprehensive tax reform program (CTRP).
Only 60 percent of the regional district offices of the Bureau of Internal Revenue (BIR) have updated zonal values.
Tan said that under this outdated system, overvaluation usually happens when the government pays for a piece of real property, but undervaluation often occurs when it is the government’s turn to collect.