Further Tax Savings for ‘My House, My Life’ Constructors
The Brazilian Ministry of Finance has raised the maximum sales value of social housing under the My House, My Life (Minha Casa, Minha Vida) programme from R$ 75,000 to R$ 85,000 (previously R$ 60,000 in 2009). Under the measure, units priced below the ceiling avoid the need to pay the 6 percent Special Construction Tax (Regime Especial de Tributação da Construção Civil, RET) paying 1 percent on the sales value.
The amendment was made in light of slow activity in the affordable housing sector in Brazil, particularly by the private sector that continues to see very little financial viability operating under the programme fuelled by rising construction input costs. According to Osvaldo Garcia of the São Paulo Public Works Business Group speaking to the PINI magazine, the move was necessary considering the high demand in the sector and the will mean that construction companies will not have to compromise the quality of their product.
Speaking in the same article, Antonio Luiz Polverini, director of social interest housing at the São Paulo Housing Syndicate, stated that the previous R$ 75,000 ceiling was impeding partnerships between state organs: “the state board of housing, for example, launched the Casa Paulista programme with the aim of contributing R$ 20,000 for São Paulo social housing with the other parties contributing R$ 65,000 – the value of the two therefore required a 6 percent RET to be paid. Now companies can benefit from this new measure and public partnerships can happen.”
For our partner real estate development company – the Fez Tá Pronto Construction System© – the news comes as encouraging as we will be able to construct larger units where necessary and still present an annual ROI at a minimum 78.40 percent.
