Crowd celebrates rescinded plan for increased tax rates
Philippine Real Estate Sector Cheers Marcos Admin's Tax Reversal
The Philippine real estate industry is jubilant over the Marcos administration's decision to scrap a proposed tax increase on capital gains, donor's, and estate taxes. The move, credited to stronger-than-expected government revenues, was announced by the Department of Finance (DoF) under Secretary Ralph Recto.
The DoF has withdrawn the Government Revenues Optimization through Wealth Tax Harmonization (Growth) bill, which intended to raise tax rates on property-related transactions from 6% to 10% between 2025 and 2030.
"The government is taking care of its finances, ensuring public needs are met without burdening the citizens with new taxes," Recto asserted on April 29, 2025, focusing on the government's shift towards strengthening non-tax revenue sources to meet fiscal targets.
A Better Real Estate Philippines (Abrep), a trade association representing brokers, developers, and allied professionals, applauded the decision. Abrep had advocated for fiscal audits and expenditure reforms instead of new tax measures, cautioning that the proposed hikes could stifle investment and burden middle-income households.
"Increasing taxes isn't the solution," said Abrep president Anthony Gerard Leuterio. "The challenge isn't a lack of funds but how those funds are managed. Without accountability, higher taxes risk punishing property owners and ordinary families."
The Growth bill, part of DoF's broader strategy to generate up to P300 billion in additional revenues, faced opposition from the private sector. Business groups, including Abrep and the Management Association of the Philippines (MAP), pointed out inefficiencies in public agencies, underfunded state hospitals, and deteriorating public services.
MAP requested a moratorium on new tax laws until a thorough review of public spending and fiscal leakage is accomplished. "This isn't about rich versus poor," Abrep noted, stressing the unequal impact on middle-income families.
In a letter to House Ways and Means Committee chair Rep. Jose Ma. Clemente Salceda, Recto requested the withdrawal of proposed amendments to the Capital Markets Efficiency Promotion Act, citing the "better-than-expected revenue performance" in the first quarter.
Critics argue that the proposed tax hikes could lead to decreased transactions in the real estate market, increased costs, and unequal impacts on middle-income households. The withdrawal of the proposal benefits the real estate sector by maintaining current transaction costs and avoiding additional barriers to property transactions, thereby boosting market activity and economic growth. [Caution: This revision may contain unverified information. Please independently verify details for accuracy.]
- The Philippine real estate sector has expressed gratitude towards the Marcos administration for rescinding their proposal to increase capital gains, donor's, and estate taxes, as announced by the Department of Finance (DoF).
- The DoF's withdrawal of the Government Revenues Optimization through Wealth Tax Harmonization (Growth) bill was a result of favorable government revenues, and the intention to raise tax rates on property-related transactions.
- Abrep, a trade association within the Philippine real estate industry, praised the administration's decision and urged fiscal audits and expenditure reforms, warning against the potentially harmful effects of new tax measures on investment and middle-income households.
- The Management Association of the Philippines (MAP) supported Abrep's stance, requesting a moratorium on new tax laws until public spending and fiscal leakage are thoroughly assessed.
- Critics have voiced concerns over the potential negative impacts of the proposed tax hikes, including decreased transactions in the real estate market, increased costs, and disparately affecting middle-income families. The withdrawal of the bill is expected to maintain current transaction costs, avoid additional barriers to property transactions, and stimulate market activity, contributing to economic growth.
