14/09/2020
"The price of the property that you inquired yesterday will never be the same price tomorrow. Risk now or regret later. If you can reserve it today, do it NOW!"
— Henry Hernandez II, The Salesperson
The Tax Reformation for Acceleration and Inclusion (TRAIN) bill was signed into law on the 19th of December 2017 and has immediately taken effect on 1 January 2018. It is said to allow a simpler, fairer, and much efficient tax system for the Filipinos. In general, TRAIN Law aims to reduce personal income tax while imposing higher tax on certain products like sweetened beverages, oil, petroleum, and fuel products, coal, stocks, automobiles, and others.
TRAIN lowered the VAT exemption of residential lots to Php1,500,000. This means residential lots that were previously tax exempt (worth Php1,500,001 to Php1,919,500) are now subject to VAT. Further, beginning January 1, 2021, residential lots will no longer be qualified for VAT exemption.
TRAIN also lowered the VAT exemption of residential dwellings (house and lots, condominiums) from Php 3,199,200 to Php 2,500,000. This means houses and condos that were previously tax exempt (worth Php2,500,001 to Php3,199,200) are now subject to VAT. Further, effective January 1, 2021, the exemption shall be lowered again from Php2,500,000 to Php2,000,000, and every three years thereafter, the amount stated shall be adjusted to its present value using the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA).
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