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Fixed  land price in hcm to equal the market price

Fixed land price in hcm to equal the market price

HCMC real estate, market price doubled the price of the city

Le Hoang Chau, chairman of HCMC Real Estate Association said. Land Law of 2013 effective from 1 July 2014. It has brought great benefits to the general economy and the real estate market in particular.

It has contributed to protecting the legitimate rights and interests of land users. And it contributes to improving the state management of land.

However, after 3 years applied in practice. This law still has many gaps that need to be amended to better suit HCMC market.

Fixed land price in hcm to equal the market price
Since the new land law, the market has stabilized and started to recover after the 2007-10 crisis.

“Actually, the price of land in the price list of the city is only 30-40% of the market price. This needs to be closer to the market situation in order to make the law more appropriate, “Chau said.

Need to change from high to low

Currently, the land price bracket issued by the government is regulated for 5 years. Localities promulgated land prices must not exceed 30% higher than the price level. And not lower than the minimum set by the government.

According to Chau, the calculation of coefficient of land price adjustment (coefficient K) of Region 1 (area with the highest coefficient) is 1.2 times. The land in 3 streets in the center of District 1 (HCM City) is Dong Khoi, Le Loi and Nguyen Hue are less than 200 million VND / m2. This is much lower than the reality (in fact, the price of land in these areas has reached VND1 billion / sqm).

In addition, the regulations on the price of land issued by the government also do not create conditions for Ho Chi Minh City as well as other provinces with reasonable price bracket. Under the principle of government land prices, large cities such as HCMC will be difficult to meet requirements.

This provision does not create favorable conditions for the provinces. When the localities will not be able to handle themselves and take responsibility for the price offered. Because it is not close to the market. Which must give the price abgnr in accordance with the state.

Meanwhile, another problem is the land use fee, also the block of the real estate market.

This problem has created a burden for investors as well as businesses. And it also creates something called “hidden numbers” in the investment that can not be predicted beforehand. Not to mention, it also creates negativity in management, which is easy to create.

The current situation on this issue is also very paradoxical. While Ho Chi Minh City is in need of this land use tax for investment. It is very difficult for businesses to complete the charge quickly.

Because of this, the cross-checking mechanism between the two agencies is the Department of Natural Resources and Environment – the unit that determines the initial land price. And the Department of Finance – the key unit in the land evaluation appraisal. Create a clue in solving administrative procedures.

Although Ho Chi Minh City still allows businesses to pay land use fees only with the confirmation of DONRE. Without the price appraisal board of the finance department.

But now, every project will take 1-3 years to pay this money to the budget

The regulations and documents on the land price in Ho Chi Minh City
The regulations and documents on the land price in Ho Chi Minh City are creating difficulties for businesses

“It must have been forgotten a few years ago. Le Thanh Company – owner of apartment project in Binh Tan District offers apartments for sale in his project with the price of VND13.9 million/ sqm.

But after the financial evaluation of the price, enterprises must adjust the price to VND17 million/ sqm. Therefore, enterprises have to spend more money to raise their income. The land use fee has to be paid into the budget more. It is unfair to businesses, “Chau said.

Land law needs to be adjusted more appropriately

According to HoREA chairman, for real estate to run “smoothly” under the market mechanism under the management of the state, the land law needs to be modified. In this regard, the association has also made two proposals for revision:

The first option is to thoroughly change the viewpoint of land use fees. It should be considered as a kind of tax. In the long run, HoREA suggested removing the concept of land use fees. Instead, it is the concept of land use tax at a certain rate. May be 10% or 15% of the land price list.

This will make the land price list more transparent. Computation also becomes easier, and it is important to eliminate the existing xin-cho mechanism. While ensuring to maintain a sustainable and long-term revenue for the state.

~~>>Update on new information on the real estate news in Vietnam here: Vietnam real estate news

The second option, must consider and research to thoroughly reform the mechanism of collection of land use fees. Negatives should be eliminated in pricing, and transparent, as quick and optimal as possible.

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