VietNamNet Bridge – The Government has issued a resolution dealing with problems in the property market and bad debt.
To solve the inventories and support the market, the Government has asked relevant ministries to implement effective measures to rapidly spur disbursement for construction project.
The Government has also asked the ministries to allocate investment capital for cities and provinces and focus on building social housing and hostel.
Under the resolution, cities and provinces with large inventories are required to limit the use of State budget to invest in developing new residential housing for displaced people.
They are asked to use the State coffer to repurchase commercial housing projects from investors to use as social housing for low-income earners, State employees and workers and people who made great contribution to the State.
The Government also decided to reduce 50 per cent of land rent this year and in 2014. At the same time, the Government has assigned the Minister of Finance to report to the National Assembly, recommending the legislature to consider and decide to apply corporate income tax at 20 per cent as of July 1, 2013 six months earlier than the schedule.
The Government plans to slash 50 per cent of value added tax (VAT) for investment and trading performance from social housing as of July 1, 2013 to the end of June 2014.
It will also cut 30 per cent of VAT levied on investment and trading performance of apartment with housing space below 70sq.m being sold at VND15 million per square metre.
The Government has also required the Ministry of Construction to work with ministries and agencies to review all housing development projects so as to classify projects to be continued developing or not.
The resolution instructs and assists property developers to adjust their business performance including lowering selling price or shifting their commercial housing projects to social housing ones.
Under the resolution, the Government has required the central bank to instruct State-run commercial banks to set aside at least 3 per cent of total outstanding debt of State-run commercial banks to assist low-income earners, State employees to borrow with low lending interest rates so as to rent or buy social housing.