THE policy reforms implemented by the Duterte administration will clear the way to “dramatic innovations” in the real estate sector that will help fuel its robust growth in the post-pandemic era, a top official of the Department of Finance (DOF) said.
DOF Secretary Carlos Dominguez III said these reforms include the Corporate Recovery and Tax Incentives for Enterprises Law (Create), which has provided hefty corporate income tax reductions and set a more flexible fiscal incentives system for businesses; and the proposed Real Property Valuation and Assessment Reform Act (RPVARA), which seeks to put in place internationally accepted standards in property valuation.
He, likewise. cited the Duterte administration’s initiatives to fix the flaws in the regulatory framework of the Real Estate Investment Trust (REIT) Law, which now allows property developers to raise billions of pesos in additional investments; and the inevitable rapid shift to the digital economy as the other key factors that would further propel the growth of the Philippine real property sector.
“As our economy reemerges after a period of great difficulty, we will expect an even livelier real estate market with these reforms in place. The intensive use of new digital technologies will add even more vitality to this market,” Dominguez said at the virtual launch of the Property Technology Consortium of the Philippines (PropTech).
According to its proponents, PropTech aims to modernize and propel the country’s real estate industry into the digital age.
Dominguez welcomed this “exciting development” in the real estate industry as he has long been advocating for a rapid shift to digital technologies, both in government and in the private sector.
He said the transition to the digital age “will enable more intensive interaction with consumers, quicker sharing of knowledge and more efficient processing.”
Dominguez cited, for instance, the early move towards digitalization of the government’s revenue agencies, which ensured their full functionality despite the ongoing pandemic.
“The new economy we expect to build as we push ahead with the economic recovery will be driven by new information and communications technologies. The real estate sector will inevitably be drawn into this process,” Dominguez said.
“The use of modern technologies will allow real estate players to reach a wider segment of digitally empowered consumers. It will make housing transactions more transparent and efficient,” he added.
Aside from applying digital tools to innovate and expand their reach to consumers, Dominguez also urged the real estate sector to help “redesign” a post-pandemic economy that is ecologically sustainable by building structures and spaces that are climate-resilient and use “green” technologies.
Dominguez said the PropTech can take advantage of the rationalization of the fiscal incentives system under the Crete as this law incentivizes research and development by granting expenses for these activities with 100 percent tax deduction.
“I am sure that some of the activities this consortium will be engaged in stand to benefit from the new fiscal incentives regime under the Create Law,” Dominguez said.
Dominguez also encouraged PropTech to participate in REITs, which will not only help ensure the robust growth of the property sector beyond the pandemic, but will also open attractive and dependable investment opportunities for the average Filipino.
Meanwhile, a credible and transparent valuation system under the RPVARA, complemented by the use of digital tools, will boost investor confidence in the land and real estate markets, the DOF said. (PR)