On December 19, 2017, President Rodrigo Duterte signed into law the Republic Act 10963, or more commonly known as Tax Reform for Acceleration and Inclusion or TRAIN Law. This legislation is considered the most significant overhaul of the Philippine tax code since 1997. Applying to taxable years beginning on and after Jan. 1, 2018, the changes will have a profound impact on real estate companies and their owners.
One of the sector that is likely to be affected is the real estate market. It is because part of the Train Law is the removal of the VAT exemptions on the sale of low-cost housing, residential lots valued up to P1,919,500, and other residential dwellings priced up to P3,199,200 as well as the lease of residential units not exceeding P12,800 per month.
To learn more about the changes on tax payments of real estate properties under the Train Law, check the infographic below from Premium Properties Ph.