The Ecuadorian government has launched an initiative to promote social housing construction by incentivizing private donations, allowing donors to receive significant tax deductions.
The Ecuadorian government's new initiative aims to facilitate access to housing by encouraging private donations for the construction of social housing. The program specifically targets homes costing up to 178 unified basic salaries, translating to approximately $85,796. With interest rates set at an attractive 2.99% from the Bank of the Ecuadorian Social Security Institute (Biess), the initiative seeks to mobilize investments towards affordable housing for lower-income families.
The proposed urgent law presented to the National Assembly includes a tax reform within the Internal Tax Regime Law, which will offer significant incentives to taxpayers making donations for social housing. Contributing taxpayers will be allowed to deduct from their income tax the full amount of their donations, capped at 30% of the total taxes owed without the possibility of tax refund. This approach is designed to stimulate donations to the housing sector, aiming to increase the availability of affordable homes.
By providing substantial tax benefits for donations and promoting lower interest rates for housing loans, the government hopes to address the critical housing deficit affecting many Ecuadorians. This reform aligns with broader social welfare goals, enhancing public-private partnerships in the housing sector and ultimately paving the way for improved living conditions and increased access to home ownership for vulnerable populations.
