— laud government’s targeted budget measures for housing sector

THE government has reinforced its commitment to making housing affordable for more Guyanese by introducing another host of measures that will directly impact the cost of construction and making owning a home much easier.
The government has zero-rated VAT for stone imported for construction and housing from CARICOM, locally produced pre-stressed concrete piles, locally fabricated mild steel beams for building construction, and locally manufactured roofing and PVC products for building construction.
Additionally, the duty on Industrial Grade Cement will be reduced from 15 per cent to five per cent and the Low-Income Mortgage Loan Ceiling will increase from $10 million to $12 million, and $15 million at the New Building Society. The new measures were revealed on Friday by Senior Minister with Responsibility for Finance, Dr. Ashni Singh, in his budget presentation before the National Assembly on Friday.
The move is expected to benefit the entire construction sector and will see the cost of building being more affordable for all. Those in the construction industry are praising the measure.

“That would be very good for me. As it is right now, the price for everything raise so it’s very costly on the small man. So at the moment if they can zero rate those materials, or construction materials on the whole it would benefit everybody, especially the small man that doing construction right now,” commented Kurt Lindo, a building contractor. In addition to being a building contractor, Lindo is also in the process of building his own home, so while the reduction will help him to provide cheaper services to his customers it also means he is able to do more on his own home.
“It would be a great blessing for me. Right now TCL cement is $1,800, I used to buy TCL for $1,500. So now if the price drops, if I’m going to buy five cement, instead I could buy an extra one or two to do something else with on my home.

So that would be a real blessing,” he related. Suresh Jagmohan, owner of the S Jagmohan Hardware Supplies and Construction Services, sees this as a big move that he says will trickle down through the system and impact everyone as the price of construction decreases.

“Definitely, it’s a very good initiative at the moment. It’s going to be a relief for the entire country, bringing down the cost for consumers,” Jagmohan shared.
He noted that measures such as these will also go a far way in encouraging him to expand his business.
“For me, this means that I would not hold back on any new construction. It would also help directly with our banking fees and so on, especially with our overdraft. If we are doing purchasing and our prices increases, that can limit your spending, so when we have a lower price you spend less from your overdraft and you pay less interest,” he related.

MUCH-NEEDED RELIEF
Jagmohan noted that shipping costs had increased in December, which had put some strain on the business, and as such, these new measures will add some amount of relief to the situation. “The prices rise mainly because of the shipping cost and we were having a lot of impact with that, because the shipping cost went up actually double from December to present. So reducing the taxes bring down the price back to make it affordable to the consumer. So now it will be close to what we were paying before,” he explained. These new measures are added on top of several measures that were already introduced in the 2020 budget, which included the removal of VAT on several categories of building materials. “The ones this year is straight forward. These are specific in terms of what will be zero-rated, and these are big imports that we use a lot in the housing industry. Last year measures spoke to the steel structures and the PVC ceiling, and now stone and other things are covered, so it’s an opening up and widening the bracket of materials covered,” Housing and Water Minister, Colin Croal, said in an invited comment. He explained that the move will mean more disposable income for persons while they are building. “It’s making more resources available and giving persons more options when building. These are major input in construction, and when we have a reduction in this it goes back to the person who wants to construct,” he noted.

The reduction of the cost for the building materials will also trickle down at the Central Housing and Planning Authority (CHPA), which falls under the Ministry of Housing, and is tasked with providing affordable housing options to citizens. Among the measures revealed during Friday’s budget speech, was the announcement that the government will also be looking to build 1,000 affordable housing units for low income persons. The 1,000 housing units will fit into a wider plan by the government to provide 10,000 house lots and distribute 7,000 land titles across the country in 2021. Minister Croal highlight that, that year’s plans are still part of an even wider plan to provide 50,000 house lots over the next five years. He noted that to carry out this drive, lands will be made available in several areas and not just in Regions Four and Three, two of Guyana’s most populous regions. “The issue is not the land; the issue is as we get resources for infrastructure. Ongoing process and the relevant agencies,” he said. He noted that President, Dr. Irfaan Ali, had earlier committed that the government will be building housing units in Regions Two and 10, and so his ministry will be focusing on implementing these promises.