New bills discussed in Housing Summit
by Prix D Banzon
Davao City (6 October) -- The House of Representative Committee on Housing started its first public hearing outside of Metro Manila yesterday (October 5) in Davao City where four additional major bills were discussed with the public including key players of the housing industry.
Committee chair Representative Eduardo C. Zialcita of the 1st District of Paranaque City said they need to know the pulse of the public because most of the provisions of the existing laws are outmoded and may not efficiently respond to the current needs.
Zialcita was joined in Davao City's public hearing by his Vice Chair Representative Arthur Y. Pingoy, Jr. of South Cotabato and 2nd District Representative Corazon Malanyaon of Davao Oriental.
The committee presented four House Bills Nos 4803, 3508, 4521 and 4903.Five of the key shelter agencies of the government namely Pag-IBIG Fund, Home Guarantee Corporation, National Housing Authority, Government Service Insurance System and the Social Security System expressed support to the passage of the bill.
Pag-IBIG Fund Manila vice president for Management Services Florentino Espana, Jr in an interview said they are for the amendments even as he cited in particular the need to amend the Maceda Law.He said it eventually would protect interests of the buyers of real property and the welfare of legitimate real estate developers/sellers."The Fund is also a seller but we need to also protect the interests of our clients," Espana added.
The bill seeks to restore the balance between interests of two sectors (buyers and sellers) and in particular propose to remove the obligation of the seller to refund to the buyer the cash surrender value of the total payments he/she made whether or not he/she has paid an equivalent of two years of installment.
Under the explanatory note of HB 4803 introduced by Representative Rodolfo G. Valencia it stated that even at the early stages of the sale, especially if the payments made by the buyer in the year of the sale reaches at least 25 percent of the selling price (otherwise known as deferred sales on installment, the seller is required by law to pay to the Bureau of Internal Revenue creditable withholding tax (CWT) ranging from one and one-half percent to five percent and value added tax (VAT) of 10 percent both based on the gross selling price.
The local government unit likewise imposes business tax based on the gross receipts of the seller. There are also the commissions paid to brokers and selling agents and marketing and selling expenses all totaling to 10 percent of the selling price which have to be paid or incurred by the seller even prior to receipt in full payment by the selling price.
These taxes, according to Valencia in his explanatory note, which were not yet in existence at the time of the Maceda Law was enacted in 2972, and the commission and selling expenses do not go into the coffers of the seller but are actually the mandatory paid to the third parties.Zialcita said that the bill also seeks to increase to 90 days (three months) the required number of months that the buyer is in arrears before the cancellation of the contract by notarial act may be availed.
"This is also to harmonize the Maceda Law provisions with the policies imposed by Pag-IBIG Fund on its housing loans," he said.He said the Maceda Law is no longer relevant and applicable to the current business climate, trends and practice.Zialcita meanwhile explained that HB 3508 introduced by Representative Monico O. Puentevella seeks to erase the boundary line that isolates the application of Republic Act 7289 to beneficiaries under the community mortgage program (CMP) for those under the direct negotiated purchase.
It is an act providing incentives to urban poor organizations in the acquisition of lots by means of direct negotiated purchase.HB 4521 as explained by proponent Representative Dr. Rey B. Aquino that local government units be given a freehand to recommend to developers the schemes for the acquisition and disposition of lands within their localities for socialized housing purposes.
Zialcita also introduced HB 4903 which stated that the 30 years old Maceda Law is an obstacle to fair business deals between the real property sellers and buyers. Zialcita said because of the 50 percent refund provision of the law, many financing transactions involving real estate have collapsed.
The bill among others proposed to limit the availment of the refund provisions of the Maceda law to only once during the entire life of the contract or its extensions, instead of the original once every five years and to remove the escalation of the percentage of refundable amount to the buyer.
"Installment of contacts at present normally runs for as long as 10 years and during that period values of properties do not necessarily appreciate. The reverse is true for the house component which depreciates as it is occupied and used by the installment buyer," he added. (PIA XI) [top]