Fed up with legal procedures
According to information from the Ho Chi Minh City Real Estate Association (HoREA), in the first 11 months of 2024, in Ho Chi Minh City, there was only 1 social housing project approved for investment policy at the same time as investor approval, which was the Le Thanh - Tan Kien social housing project, which broke ground on August 29, 2024. And up to now, after more than 3 months, the project has not yet been approved by the People's Committee of Binh Chanh district for detailed planning at a scale of 1/500, so it has not yet been granted a Construction Permit.
For that reason, this project has not yet been implemented, although in August 2024, the City People's Committee issued a decision to "locally adjust the 1/2000 scale zoning plan" and issued a decision approving the investment policy at the same time as approving the investor for this project.
Another project that is also stuck in the mechanism is the Linh Trung 2 Export Processing Zone workers' accommodation project (phase 2) invested by Thien Phat Tourism Service Production Construction Investment Joint Stock Company. Up to now, the Linh Trung Export Processing Zone Management Board and the City Export Processing Zone and Industrial Park Management Board (Hepza) have not yet supported the project to complete the procedures so that phase 2 can be started soon, although the City People's Committee has directed to remove the problem.
Currently, in the city, there are only 6 social housing projects with 4,754 apartments under construction at a standstill due to "legal problems" and 2 social housing projects with 1,512 apartments have been completed but not yet accepted.
This is a very modest result. To improve this situation, recently, the leaders of Ho Chi Minh City had to make a commitment to have many policies to remove procedural barriers, creating an open mechanism for investors to accompany Ho Chi Minh City to build 93,000 social housing units by 2030.
The mechanism is still inadequate.
Talking to Lao Dong Newspaper, Mr. Le Hoang Chau - Chairman of HoREA - said that the biggest problem currently in implementing investment procedures for social housing projects is still the lack of coordination and pushing between departments, branches, districts, and counties, leading to the settlement of administrative procedures for social housing projects being very slow and taking a lot of time.
Mr. Le Hoang Chau assessed that the social housing policy of the Housing Law 2023 is the best built in the past 30 years, but the Association found that some detailed regulations in Decree 100/2024/ND-CP are still problematic, inadequate, and limited.
For example, regarding the land fund, the inadequacy is due to the lack of regulations on commercial housing project investors to propose reserving social housing land within the project scope or arranging it in another location outside the project scope or paying money equivalent to the value of the invested land fund to build social housing, when carrying out procedures to approve the investment policy and simultaneously approve the investor.
Mr. Le Hoang Chau said that it is necessary to pay attention to all three methods: building social housing on 20% of the land fund of the commercial housing project; arranging social housing land fund in other locations outside the project scope with equivalent value and paying money equivalent to the value of the residential land fund to build social housing. Because all three of these methods are very meaningful contributions of investors of commercial housing projects to create resources for social housing development.
Not all commercial housing projects are suitable for building social housing on 20% of the project's land fund, especially for high-end commercial housing projects or mid-high-end commercial housing projects, because the price of social housing built on this 20% land fund will make the cost of social housing increase very high.
Regarding the rights of enterprises building social housing, there are still shortcomings because the Law on Value Added Tax and the Law on Corporate Income Tax only stipulate the application of a 5% VAT rate and a 10% corporate income tax rate for all social housing projects for sale, hire-purchase, and lease. However, there are no regulations on more tax incentives for social housing projects for rent only, so it has not contributed to encouraging enterprises to invest in developing social housing projects for rent only.
The Association also recommended that the Ministry of Construction submit to competent authorities for consideration the application of a tax rate of 3% VAT and 10% corporate income tax on social housing projects for rent only to encourage businesses to invest in development.
