Hammering down prices (17/12)
06/08/2010 - 29 Lượt xem
Nguyen Tran Nam, Deputy Minister of Construction, said supply was consistently less than demand and developers were taking advantage of the situation by raising prices.
“We have to solve this obstacle otherwise the problems will continue,” said Nam. While the country has adequate construction materials, workers and investment capital, developers faced numerous difficulties finding and processing procedures for land.
“This is because our procedures are still complicated and bureaucratic,” he admitted.
Nguyen Trong Ninh, deputy director of the Ministry of Construction’s Housing Department, said the ministry had submitted a proposal to the government to adjust the Land Law in a bid to simplify procedures.
The second solution, Nam said, involved taxation.
At present, investors must pay all land taxes on their project once they take possession of the land. As a result, many are unable to develop the project due to a shortage of capital.
“We propose that they pay only between 15 to 20 per cent in the beginning and the rest is paid on a schedule,” he said.
The solution would ease the financial burden for investors and keep projects on schedule, he said.
The land transfer and registering taxes must also be reconsidered, Nam said. The current land transfer tax and registering tax were too high at 4 per cent and 1 per cent respectively, causing a number of buyers to transfer their real estate under the table, he said. Nam proposed that these taxes be lowered to 1 per cent and 0.02 per cent to encourage buyers to obey the law. Ninh said that these taxes should be calculated using progressive levels.
The progressive tax, Ninh suggested, could be levied on the amount of real estate owned by each individual or the duration of ownership.
Ngo Trong Khang, director of the Housing and Land Registration Centre under the Hanoi Natural Resources, Environment and Land Department, agreed with Ninh on the progressive tax.
“The tax could be divided into many levels, according to the duration of ownership. The less time the property is owned, the more tax it could bear,” Khang proposed.
Khang also called for a stable and long term policy, otherwise it could impact on the real estate market’s development.
Another solution to create more land for investors, Nam said, could be repossession. Companies that are using land improperly or not at all could have it taken away.
A number of enterprises with large areas of government land leave the land unused and leased for benefit (EXPLAIN HOW THIS BENEFITS THEM BECAUSE IT IS UNCLEAR). This is illegal under Vietnamese law.
“This is a big waste that we have to deal with if we want to have more land to give to investors,” said Nam.
Nam added that government needed to create favourable condition for end users.
“We must create opportunities for end users to secure accommodation, such as selling at preferential prices, paying by instalment, or hire-purchase,” Nam said.
Source: VIR.
