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Investment In Renovating Old Apartment Building Will Be Entitled To Corporate Income Tax Incentives

The Ministry of Finance is proposing to the Government to submit to the National Assembly a number of policies to supplement the CIT incentives for investment and renovation of old condominiums.

For investment activities, renovation of old apartment buildings, according to the current regulations, this activity is not entitled to CIT incentives.

Through the management of tax collection in the past time, the Ministry of Finance also received the recommendation of a number of enterprises to guide the implementation of financial solutions and land under Resolution No. 34/2007 / NQ-CP of the main extra.

Therefore, the drafting agency proposes to the National Assembly to supplement the regulations on the income of enterprises from the implementation of investment projects to renovate and rebuild the old state-owned condominium sold to the people leased, damaged, collapsed or unsafe for users for sale, lease or hire purchase under the provisions of the Housing Law shall enjoy the preferential CIT rate of 10%, as same as applies to the current investment in social housing construction.

Enterprises must separately account the incomes of each investment project on renovation or rebuilding of old condominium buildings for use as the basis for the enjoyment of tax preferences.

old apartment
Residents are determined not to move even though the apartment is dangerous.

It is known that by the end of 2016, the People’s Committee of Hanoi has completed the assignment of 19 enterprises to elaborate detailed planning 1/500 to renovate the old apartment buildings with a height of 2-6 floors. Among the businesses assigned to deploy, besides the recent attention of the Joint Stock Company Urban Viet Hung Investment (Vihajico) with Thanh Cong collective has many other big names such as Vingroup, Sungroup, FLC, UDIC, Hanoi General Import Export Corporation (Geleximco), Vinaconex …

In addition to these real estate giants, large business enterprises such as T & T Joint Stock Company and Hoa Phat Joint Stock Company are also assigned to plan some projects. However, the list also includes investors who have been involved in lawsuits against residents of previous projects, such as Song Hong Real Estate Joint Stock Company or Tung Shing Group.

When assigning enterprises to implement the above contents, the Hanoi People’s Committee has clearly stated the funding source for the elaboration of the detailed plan because these units are self-motivated. Once the master plan for the master plan is approved, the selection of the participating investor will follow the regulations. At this stage, the city will consider and ensure the resources that investors have made.

According to the Director of Hanoi Construction Department – Le Van Duc, the city has nearly 1,300 old buildings in 76 zones and 306 independent apartments with 2-5 floors. These were built between the 1960s and early 1990s and most of them are out of use.

In fact, the renovation and upgrading of apartment buildings in Hanoi have long been set up with the participation of real estate investors. However, over the years, the process still faces many obstacles, mainly related to the compensation and resettlement agreement between the project owner and the people living in the dormitories.

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