A NEW law is requiring condominium developers to build socialized housing projects, a mandate which was previously limited only to subdivision developers.

As an amendment to Republic Act 7279 or the Balanced Housing Development Act, RA 10884 mandates condominium developers to develop an area for socialized housing equivalent to at least five percent of the total condominium area or total project cost.

From the 20 percent requirement for subdivision developers, the law has reduced this to 15 percent.

“This will help the underprivileged and the poor acquire better chances of owning a home because the compliance has expanded, from subdivision developers now also condominium,” said Housing and Land Use Regulatory Board (HLURB) 7 and 8 Officer-in-Charge Francis Ordeniza.

RA 10884, which lapsed into law on July 17, can be complied by developing socialized housing in a new settlement; through joint venture projects for socialized housing, with either the local government unit (LGU) or any of the housing agencies or with another private developer, or with non-governmental organizations engaged in the provision of socialized housing and duly accredited by HLURB.

The developer may also comply by participating in a new project under the community mortgage program.

To encourage greater private participation and to cut the cost of socialized housing prices, the law has provided incentives to developers.

Among these include exemption from the payment of project-related income taxes, capital gains tax on raw lands of the project, value-added tax for the project contractor concerned, and transfer tax for both raw and completed projects.

Developers will also be exempted from paying donor’s tax for lands certified by the LGU to have been donated for socialized housing projects.

The law also has provisions for penalties for non-compliant developers.

For the first offense, erring developers will be imposed of a fine of not less than P500,000. The second offense carries penalties of not less than P500,000 fine and suspension of license to do business for three to six months.

For the third offense, there will be cancellation of the developers’ license to do business.

Data from HLURB 7 shows it has approved 58 licenses to sell to both condominium (17) and subdivision (41) projects from the start of the year up to Aug. 19, with total project cost reaching P10.2 billion.