By Gina T. Reilly
Smaller construction companies that develop affordable housing projects on Guam are now eligible to receive tax breaks under a new law that expands the Qualifying Certificate program.
"As the cost of housing continues to rise on our island and across the nation, lawmakers are tasked with finding solutions to assist hard-working middle-class families in the purchase of their first home," Gov. Lou Leon Guerrero said in signing Bill 348-36.
The bill, now Public Law 36-131, applies to builders developing at least five to 24 affordable homes.
The new law seeks to mitigate the acute shortage of affordable housing on Guam.
According to Cornerstone Valuation Guam's latest report, Guam’s new median price for a single-family dwelling is now $426,000, showing a sharp increase from $299,000 in 2019, $333,500 in 2020, and $380,000 in 2021.
"Under Guam law, developers that build at least 25 affordable housing units are eligible for incentives including business privilege tax, income tax, real property, and use tax benefits," said Sen. Telo Taitague, the bill's author. "Public Law 36-131 extends the same tax benefits to eligible developers."
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The law also creates the Affordable Housing Assistance Fund, to be administered by the Guam Housing Corp., that will provide assistance to first-time home buyers to pay their down payment and other closing costs, which are often the biggest barriers to home ownership.
"It is my hope that by providing financial assistance with these costs, we will enable many more in our community to achieve the milestone accomplishment of homeownership, and secure the future of their families for generations to come," the governor said.
Public Law 36-131 designates BPT payments derived from construction costs that are tied to affordable housing units as a viable funding source to help qualified borrowers close their home loan through down payment/closing costs assistance, Taitague said.
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