Tax exemption for economic housing eyed

January 2, 2026 | 12:00am

MANILA, Philippines — The Department of Human Settlements and Urban Development (DHSUD) will study the possible exemption of developers engaged in economic housing projects from corporate income tax (CIT).

In a press statement, DHSUD Secretary Jose Ramon Aliling said the proposed study, to be conducted with the Board of Investments of the Department of Trade and Industry (DTI-BOI), would seek to classify economic housing as a form of mass housing exempted from CIT under Batas Pambansa Bilang 220, enacted in 1982, to address the shortage of affordable housing for low and average-income earners.

Aliling said the study aims to place economic housing projects under “a clearer, rules-based, and more predictable tax incentive framework comparable to socialized housing.”

He said exempting economic housing from CIT is also pursuant to the Marcos administration’s “overarching goal of expanding access to affordable housing while easing regulatory processes that affect priority sectors, particularly the working class.”

“What we’re after here is a clear and smooth system for economic housing. If we have clear policy and a uniform policy implementation, we strengthen the trust and confidence of the private sector. And thus, we can address the housing needs more efficiently,” Aliling said.

To advance the proposed policy study with DTI-BOI, Aliling recommended the formation of a Technical Working Group (TWG) that will be tasked with conducting technical evaluations and crafting policy recommendations for further consideration by the concerned agencies.

Aliling said he is confident that the initiative would contribute to “faster housing development, improved coordination across government agencies, and a more transparent and predictable incentive framework for housing projects compliant with BP 220.”

“This is not just an issue about tax. It is about clear policy direction, trust in the government, and united efforts to address the need for affordable housing,” Aliling said.

The Bureau of Internal Revenue recently issued Memorandum Order 048-2025 which simplifies the process for private developers in applying for certificate of tax exemption for socialized housing projects.

Earlier, DHSUD and Department of Economy, Planning and Development (DEPDev) also issued Joint Memorandum Circular 2025-001 that adjusted the price ceiling for socialized housing projects under the flagship Expanded Pambansang Pabahay para sa Pilipino (4PH) Program.

Socialized housing targets the poor or low-income earning families, including those living in danger zones while the economic housing caters more to average-income earning families.

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