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Incentives sharpen social housing focus

Update: January, 11/2014 - 09:09
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HA NOI (VNS)— Several real estate projects have been changed to social housing developments to provide housing for poor people and contribute to loosening difficulties in the market.

The country currently has 124 social housing projects containing more than 78,700 apartments, according to statistics from the Ministry of Construction.

Of these, 85 projects has been under construction for low income earners with 51,900 apartments, while 39 other projects with 27,000 apartments would be made available to workers in industrial zones.

The total projects' investment was over VND35.6 trillion (US$1.69 billion).

In addition, 57 projects have been proposed to convert from commercial housing to social projects, which could provide an additional 34,837 apartments with a total investment of VND20.5 trillion.

Of these projects, Ha Noi has reviewed proposals from 15 projects to increase the number of apartments from 5,478 to 10,587. Another 10 projects in HCM City also submitted proposals to increase the number of apartments from 4,655 to 9,052.

Regulations supporting social housing take effects

The Government has issued Decree 188/2013/ND-CP on the development and management of social housing with stronger support and clearer procedures, which aims to increase the social housing supply, as well as regulate the property market.

The decree, which took effect yesterday, stipulates that social housing projects would be exempt from land use taxes.

Investors in such projects would also enjoy benefits, such as tax reductions and exemptions for value-added and corporate taxes.

Enterprises in the projects could ask for loans from credit institutions. Under the decree, commercial banks and credit institutions would be responsible for providing at least 3 per cent of their total debt balance for social housing projects, offering assistance to low income earners with lower interest rates than those available in the market.

Also, investors would be given support from the State budget for land clearance and infrastructure improvements.

Investors would also be allowed to issue bonds guaranteed by the Government to arrange capitals for their projects.

Further, the purchase of social housing will be transferred after 5 years of use, from the time of signing the contract with the investor.

Of note, in the last two weeks of 2013, disbursements from a VND30 trillion package to offer soft loans to home buyers and property developers, in an attempt to stimulate the property market and resolve bad debt, saw a surge of VND170 billion.

By the end of last year, the State Bank of Viet Nam committed loans of VND1.75 trillion for 13 businesses and 1,764 home buyers.

Of these, commercial banks distributed VND304 billion to 7 enterprises and 1,750 customers, with total loans of VND428.5 billion.

Also, the Bank for Investment and Development of Viet Nam took the lead in providing loans under the package, with total disbursements of VND150 billion. This was followed by Vietcombank, Vietinbank, Agribank and MHB.

Meanwhile, the ministry's Housing and Real Estate Management Department said banks have received applications and reviewed them. — VNS

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