There would be a reduction of RD$77,000 million in investment in new projects, causing negative impacts to the GDP and the reduction of more than 115,000 jobs.
With the Fiscal Modernization Law project, the price of housing would skyrocket by more than 30%, which would cause low-cost housing to disappear, since these would be removed from this classification due to the price they would reach.
With the tax reform presented by the Government, the differentiated Income Tax (ISR) rate of housing trusts would be eliminated, which would cause the price of housing to increase by approximately 12.5%, and to this increase would be added a increase of 18% for taxing sales with Value Added Tax (VAT), the inclusion of VAT on transportation and non-industrialized goods such as aggregates, and for the 50% increase in withholdings made to labor, he explained yesterday the Dominican Association of Home Builders and Developers (Acoprovi).
“In other words, this tax reform would result in a total increase in housing prices of more than 30%,” they said, while requesting that a dialogue be opened with the authorities to review the package of tax measures, in order to mitigate the adverse effects. about the sector.
They pointed out that this 12.5% increase in housing prices would cause more than 50% of housing projects classified as low-cost to no longer belong to that category and, in addition, buyers would lose the housing bonus.
“We are going to end up having neither low-cost housing nor average housing. Low-cost housing would disappear. Average housing preys on low-cost housing and this would end up being eliminated in general“, answered the president of Acoprovi, Annerys Melendez.
He said that with the increases that the reform would bring, six out of every 10 families would be disqualified for social housing plans, for not having the necessary resources to pay for these increases.
Housing developers indicated that all these factors, together with the addition of taxes on short-term rentals, will cause a collapse in the demand for housing, decreasing sales by 56%.
This would motivate, they added, a reduction of RD$77,000 million of investment in new projects, causing negative impacts to the gross domestic product (GDP) and the reduction of more than 115,000 jobs.
“Added to this situation is that rental prices would rise due to a reduction in the supply of housing for these purposes,” they stated.
