Para ordenar al Departamento de Hacienda a establecer una exención contributiva sobre el pago del Impuesto sobre Ventas y Uso (IVU) aplicable a los materiales de construcción y sobre los Impuestos sobre Servicios rendidos a otros comerciantes (B2B) cuando el servicio esté relacionado a la construcción de Vivienda de Alto Impacto Social, Económico y para Re-Población de Puerto Rico; ordenar a la Oficina de Gerencia de Permisos (OGPe) a establecer una exención del pago de cargos y derechos relacionados a permisos de construcción expedidos para el desarrollo de vivienda asequible en Puerto Rico por un periodo de cinco (5) años, a los fines de fomentar la construcción de Vivienda de Alto Impacto Social, Económico y para Re-Población de Puerto Rico para mitigar la crisis prevaleciente de escasez de unidades de vivienda en la isla; y para otros fines relacionados.

2025-2028 Session

Puerto Rico exempts construction materials and services from sales tax and waives permit fees for five years to incentivize affordable housing development and address housing shortage.

Referido a Comisión(es)

Legislative bill overview

Bill RCC 235 directs Puerto Rico's Treasury Department to exempt construction materials and construction-related B2B services from sales tax (IVU) when used for affordable housing projects. It also mandates the Permits Management Office (OGPe) to waive construction permit fees and charges for affordable housing developments for five years, aiming to stimulate housing production and population retention.

Why is this important

Puerto Rico faces a severe housing shortage that affects affordability and population retention, as residents migrate seeking better living conditions. Tax and fee exemptions reduce development costs, potentially making affordable housing projects financially viable and accelerating construction to address the crisis.

Potential points of contention

Revenue impact: The Treasury Department loses IVU tax revenue from construction materials and B2B services, affecting government funding for other services without identified alternative revenue sources

Definition ambiguity: "High social and economic impact housing" lacks precise definition, creating uncertainty about which projects qualify and potential for selective application or disputes

Five-year limitation: The temporary five-year permit fee waiver may not provide sufficient long-term incentive for sustained affordable housing production or may create a cliff effect when it expires

Developer selection criteria: The bill doesn't specify how projects will be selected or approved, raising questions about transparency, fair competition, and whether incentives benefit intended populations

Unintended consequences: Tax exemptions could increase prices in construction materials markets or benefit contractors/developers more than end-user affordability