The government is considering a higher tax incentive ceiling for socialized and economic housing, a move seen as a bid to keep affordable homebuilding viable as construction costs continue to climb.
Speaking at the induction of the 2026 officers of the Subdivision and Housing Developers Association, Inc. (SHDA) on January 9, Human Settlements and Urban Development Secretary Jose Ramon P. Aliling said a proposal to adjust the price threshold for housing units eligible for incentives under the Board of Investments’ (BOI) income tax holiday program is now with the Office of the President.
Under the proposal, the ceiling would be raised to P3.6 million from the current P2.5 million, widening the range of units that can qualify for fiscal perks. The adjustment follows the government’s approval of a revised definition of socialized housing, which already reflects higher allowable unit prices.
Aliling said the proposed increase is meant to align incentives with market realities, noting that sustained hikes in land prices, labor costs, and construction materials have steadily compressed margins for developers focused on affordable housing.
Beyond socialized housing, the Department of Human Settlements and Urban Development is also looking to resolve long-standing ambiguity around the tax treatment of economic housing, particularly whether BOI-registered projects should be classified as corporate income tax–exempt.
Developers have flagged the uncertainty as a deterrent to new investments, despite economic housing being positioned as a key pillar of the government’s shelter strategy.
Industry leaders welcomed the signals. SHDA President Kerwin V. Padua cited ongoing reforms, including reviews of housing price ceilings, extended compliance timelines for balanced housing requirements, the rollout of one-stop shops for permits, and faster license-to-sell approvals.
SHDA Chairman Francis Z. Villegas added that economic housing ceilings also need reassessment given surging input costs.
Raising incentive thresholds may dent foregone revenues in the short term, but without recalibration, developers risk walking away from the affordable segment altogether. For a housing program built on scale, the bigger risk may be doing nothing.
