Chiz Escudero bill seeks tax exemption for shared residential spaces

MANILA, Philippines — A Senate bill seeks to exempt common areas within residential subdivisions and condominiums from real property taxes (RPT) to ease the financial burden on millions of middle-class homeowners.

Sen. Francis “Chiz” Escudero filed Senate Bill No. 2569, which proposes an amendment to Section 234 of Republic Act No. 7160 or the Local Government Code of 1991, to remove a cost that is quietly passed on to residents through monthly association dues.

Once enacted, the measure is expected to lower monthly dues for millions of condominium and subdivision dwellers nationwide, offering structural relief at a time when households continue to grapple with rising food, fuel, and utility prices.

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Under SB 2569, all portions of a residential condominium or subdivision project that are duly designated or recognized as common areas would be exempt from RPT, provided they are not used for commercial or income-generating activities.

Common areas include hallways, lobbies, parks, and other non-income generating facilities.

Cost of homeownership

The proposed measure, on the other hand, provides that spaces converted for business purposes would remain taxable, ensuring that the exemption applies strictly to shared residential facilities.

In the explanatory note of his proposal, the senator emphasized that homeownership involves not only acquiring a unit but also maintaining the common facilities that serve the entire community.

He noted that this current practice of taxing shared spaces effectively increases the carrying cost of homeownership for families who already shoulder amortization, utilities and rising living expenses.

Middle-class sentiment

“These places do not make money, but they still pay taxes. In the end, it’s the families who live there who pay, not the developer,” Escudero, chair of the Senate committee on urban planning, housing and resettlement, said in a statement.

The imposition of RPT on such common areas not only adds to the recurring financial burden of homeowners but may also discourage developers from allocating land or floor space to facilities and community amenities, he said.

He said the proposed measure responds to a growing sentiment among middle-income families who feel they receive fewer forms of direct government assistance despite being the country’s primary tax base.

“They often do not qualify for financial aid, but they are also the ones who have the heaviest expenses every month. They deserve to receive appropriate attention and assistance to alleviate their burdens,” Escudero stressed.

Developers typically pass on the cost of real property tax on common areas to homeowners’ associations, resulting in higher dues.

Housing groups have long argued that these shared spaces do not generate income and should not be treated as taxable property.