THE tax holiday for those who will invest in parking spaces in Davao City was approved on third and final reading during Tuesday’s regular session at the City Hall.

Majority of the councilors of the City Council approved on third and final reading the ordinance that will give special incentive package to encourage owners and developers who will turn their properties as parking spaces for public use.

The ordinance proposed by Davao City Councilor Jimmy Dureza was approved on second reading last Tuesday after it received positive feedback from two-thirds of the Council.

With the ordinance, the city will give two-year exemption for the payment of real property tax for all the lands qualified from the moment. The same land shall be used or converted as parking space.

The city will also give exemption for five years from real property tax for the building should the real property owner develop or construct parking building on a land qualified.

To qualify for the tax holiday, the building must be exclusively used as parking spaces for a period of not less than five years. Once the owner introduces another use for the building within the five-year period, the tax holiday is lifted and real property tax for both land and the building shall be assessed from the time of the grant of the benefit up to the time the building has been converted.

Aside from Real Property Tax, the owners/developers will also be exempt for five years of Business Tax. As above, when the parking space is converted or additional use is introduced before the five-year period is over, the benefit shall be forfeited and the business tax shall be assessed commencing of the grant until the business ceases to operate.

Only properties under commercial zone and all other zones allowed based on zoning ordinance, properties to be developed and/or used exclusively as parking space/buildings, and properties with updated payments are covered by this ordinance.

The ordinance, however, excludes those parking spaces required under National Building Code (NBC) for property owners/developers. All the existing parking spaces of establishments in excess of what is required by the law but passed through the approval of the Office of the Building Official prior to the ordinance can avail of the incentives if they meet some conditions.

The city will give incentives for improved/ renovated parking lots and buildings in excess for what is provided by the NBC under the conditions that: (1) the approved or mandatory parking space is retained, (2) a new or additional structure is built on the existing parking lot area, (3) the new or additional structure complies with the Section 4.

Paragraph B of the ordinance which states that there will be no alteration of the approved building plans to avail incentive benefits and lastly (4) the improvement will not diminish or decrease building plans already approved by the Office of the City Building Official. Land area intended for parking in excess of what is provided under the NBC shall enjoy the real property tax exemption. The area for parking that is covered under the requirement of the Building Code shall not be covered by the real property tax exemption.

“For this purpose, a tax declaration is to be required to differentiate the two areas that is covered and that is excluded from the real property tax incentive,” the ordinance read.