HA NOI (VNS)— The Ministry of Construction (MoC) has proposed that the Ministry of Finance (MoF) agree to slash value added tax (VAT) by 50 per cent for apartments below 70 sq.m and valued at VND15 million per sq.m, in order to ease difficulties facing the frozen property market.
The MoC says that it is necessary to extend VAT breaks for housing investors and property developers over the next 12 months.
In addition, construction of social housing will also need to enjoy a reduction of 50 per cent VAT.
According to the MoC, preferential corporation income tax should be applied at 10 per cent for any income from social housing business and investment.
The MoC has asked the finance ministry to consider the proposal and make a report to the National Assembly permitting VAT reduction to be applied within 10 months, in order to encourage property developers and stimulate the real estate market.
The MoC reports that the local property market is now facing hard times both in HCM City and Ha Noi. According to Nguyen Manh Ha, who heads up the ministry's Department of Housing and Property Market Management, housing transactions mainly carried out on projects that are already finished and operational.
Most buyers are young couples from other provinces. They often buy apartments ranging between 60 to 100 sq. metre at price of VND1.5-2.5 billion per unit, according to Ha.
Meanwhile, the price of villas and detached or semi-detached villas continues to decline.
The country is home to nine concrete-brick factories. Two are coming to a production standstill while seven others have stopped production entirely. — VNS