Troubleshooting Solutions for Property Businesses

11:28:14 AM | 19/3/2020

Vietnam National Real Estate Association (VNREA) recently sent a document to the Prime Minister, putting forth their proposals to complete legal policies and remove difficulties for real estate businesses.

According to VNREA, in the second half of 2019 and early 2020, the real estate market faced numerous hardships and showed signs of sharp decline that affected many other industries. Many giant, well-branded firms faced the risk of bankruptcy, especially when projects lost liquidity and the launch of new projects encountered many difficulties. VNREA’s solutions are about completing policies and laws, removing difficulties against businesses, and focusing on credit and tax issues.

With respect to credit solutions, real estate companies proposed lowering interest rates for investment loan contracts for apartments, tourist villas and condo offices (for example, lowering 50% of interest rates during the epidemic and 30% in one year after the epidemic is controlled); restructuring and rescheduling payment terms for enterprises (for example, rescheduling repayment terms from six months to one year from the date the epidemic is controlled), and introducing a soft loan package for enterprises.

For tax solutions, they want to have the time extended for fulfilling tax obligations to the State Budget for six months for each payment period until the epidemic is controlled for one year; be exempted from fines for late tax payment in case tax is paid in full; have the time extended for land rent payment until the contagion is controlled, the VAT reduced and tax repayment postponed.

VNREA proposed finalizing legal documents on tourism real estate as per Directive 11/CT-TTG aimed to add shophouse, shoptel and similar products and issue legal regulations on land-use regimes for these types of real estate.

To support social housing funding, according to the Housing Law, the government annually grants 50% of funds to the social policy bank and mobilizes 50% more from various channels to support buyers and lessees of social houses. In addition, four State-controlled commercial banks such as Vietcombank, BIDV, Agribank and Viettinbank are granted interest rate subsidies of 3-4% and the rest mobilize all deposits for lending on their own. However, in fact, in 2019, there was still no source of this funding to support buyers and constructors of social housing. Therefore, many social housing investors such as AZ Thang Long, Hoang Quan, Capitalhouse, Eurowindow Holding could hardly sell their products. Buyers do not get loan support while the demand for social housing is huge. VNREA proposed the Prime Minister increase funding support for low-income people to buy social houses in two channels: Vietnam Bank for Social Policies and State-owned commercial banks.

To have administrative procedures reformed and streamlined to facilitate businesses to carry out their projects quickly, VNREA respectfully requested the Prime Minister to further review procedures to select investors, project investment, construction and management procedures relating to investment construction preparation, site clearance compensation, land allocation, project planning appraisal and approval and environmental impact assessment.

By Huong Ly, Vietnam Business Forum