'Land brokers' are 'immune' to legal regulations?

'Land brokers' are 'immune' to regulations?

At a recent regular Government press conference, Deputy Minister of Construction Nguyen Viet Hung said that there was a situation where land brokers were inflating prices, pushing up housing prices and disrupting the market. For example, in many land auctions in the suburbs of Hanoi, the subjects inflated the prices very high, then reneged on the deposit.

To control the market, Deputy Minister Nguyen Viet Hung said that there are very clear legal regulations such as the Criminal Code, Competition Law, Land Law and especially the Real Estate Law 2023 with many provisions prohibiting price inflation and market disruption.

The leader of the Ministry of Construction said there is a situation of land brokers inflating prices, pushing up housing prices, causing chaos in the market. (Photo: ST)

At the same time, the Government, the Ministry of Construction and localities have also issued their own regulations to prevent price inflation and profiteering from real estate. However, it seems that current regulations have not completely resolved the situation of “land brokers” disrupting the market.

Mr. Nguyen Trung Tuan, a real estate expert, said: "Land brokers" today are like "drug-resistant viruses" because of many tricks and law-evading methods.

For example, in land auctions, the regulations clearly state that “if the auction winner does not execute the transaction, the deposit will be forfeited.” However, the very low deposit level is not a deterrent.

Or in the buying and selling of apartments, many “land brokers” create fake transactions to increase apartment prices. However, it is difficult to verify which agency will verify whether these transactions are fake, whether they are “selling from the left hand to the right ear” or not. Therefore, with current regulations, it is difficult to completely resolve the situation of “land brokers” disrupting the market.

Some new proposals

Recently, the Ministry of Construction proposed that the Ministry of Finance study and propose tax policies for individuals who own multiple houses/lands; and at the same time tax abandoned and unused real estate. The Ministry hopes that this will be a policy that will help limit speculation and "surfing", which disrupt the market.

Many opinions also proposed to impose a second real estate tax to "cool down" housing prices. Over the years, the issue of imposing a second real estate tax has been discussed but has not been enacted. Currently, many opinions continue to believe that this is not an effective measure.

Dr. Dinh The Hien, Director of the Institute for Informatics and Applied Economics, assessed that the proposal to impose a second real estate tax at the present time is completely inappropriate. Because it not only causes the market to lose confidence but can also increase housing prices, making people lose access to housing. More dangerous is the possibility of a backlash when people fall into a spiral of tightening spending, causing an economic recession.

Mr. Hien analyzed: For a long time, the real estate market has been continuously hit by shocks. First, there was the pandemic, international geopolitical difficulties, then the credit tightening policy and then some negative incidents. After many efforts, the market is starting to recover but is still very difficult.

Illustration photo. (Source: ST)

The most important issue at the moment is to regain market confidence, avoiding any shocks or new barriers, such as adding a tax on real estate. In fact, recently, Ho Chi Minh City proposed a new land price framework and immediately did not receive consensus in society.

Not to mention, when people buy a piece of land, they pay personal income tax, pay land tax in full, create jobs for brokers, create conditions for land sellers to earn money, pump money back into the economy... When building a house on that land, it means that the investor has contributed to the construction industry, helping to consume iron, steel, wood, furniture... Therefore, it is not appropriate for them to pay more taxes.

In addition, real estate is not only a place to live but also plays an input role in economic activities. For example, for business producers, in addition to the first real estate such as factories, shops, etc., they must own or rent a second real estate to live in. Taxing the second real estate in this case causes the price of the goods and services they sell to be added with an annual tax rate, and in the end, the consumer is the one who bears the brunt.

In addition to the above proposal, the Ministry of Construction has also issued two documents requesting localities to strictly implement the Prime Minister's telegram No. 82. Strengthening the inspection and supervision of the implementation of legal regulations related to projects of investors and brokers with price inflation and profiteering and taking immediate preventive and handling measures.

Continue to speed up the progress of administrative procedures on investment, site clearance, and land use fee determination to ensure market revenue and reduce profiteering, especially in Hanoi and Ho Chi Minh City.

Propose that the Government assign the Ministry of Construction to coordinate with the Ministry of Natural Resources and Environment and relevant ministries and branches to study and propose to competent authorities to consider the signal of the model of Real Estate Transaction Center and Land Use Rights Transaction managed by the State to limit price risks.

Source: https://www.congluan.vn/co-dat-dang-nhon-quy-dinh-phap-luat-post315809.html