Decision to pilot land expansion for commercial housing nationwide; Expectations for recovery of real estate investors' payment capacity; Hanoi will have the most modern Opera House, over 25,000 m2 wide.
Soc Son land auction has someone paying 30 billion VND/m2; Ministry of Finance proposes taxing house and land purchases based on ownership period
Decision to pilot land expansion for commercial housing nationwide; Expectations for recovery of real estate investors' payment capacity; Hanoi will have the most modern Opera House, over 25,000 m2 wide.
Here are the real estate news highlights of the week.
Decision to pilot land expansion for commercial housing nationwide
On the afternoon of November 30, the National Assembly passed a Resolution on piloting the implementation of commercial housing projects through agreements on receiving land use rights or having land use rights with 415/460 delegates present in favor, 19 in disapproval, and 26 abstentions.
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| The National Assembly voted to pass the resolution. |
The Resolution stipulates the pilot implementation of commercial housing projects through agreements on receiving land use rights or having land use rights (pilot projects) nationwide in the following cases: projects of real estate business organizations receiving land use rights; projects of real estate business organizations having land use rights; projects of real estate business organizations having land use rights and receiving land use rights.
Another case is the project of a real estate business organization established by organizations using land to implement a commercial housing project on the area of a production and business facility that must be relocated due to environmental pollution, or the facility must be relocated according to construction planning and urban planning.
Pilot projects, according to the resolution, must meet the following conditions: the scope of the land area and land plot implementing the project must be consistent with the district-level land use planning or construction planning, urban planning.
The scope of the land and land plot for project implementation is consistent with the approved local housing development program and plan.
The scope of the land and land plots for project implementation is included in the list of land plots expected to implement the pilot project approved by the Provincial People's Council according to the provisions of this Resolution.
There is a written approval from the Provincial People's Committee on the agreement on receiving land use rights to implement the pilot project for the case specified in this Resolution, which is also a condition stated in the Resolution.
Real estate business organizations must satisfy the conditions prescribed by law on land, housing, real estate business, investment and other relevant legal provisions.
The selection of pilot projects must meet the following criteria: being implemented in urban areas or areas planned for urban development; the total residential land area in pilot projects (including existing residential land and land planned to change land use purpose to residential land) does not exceed 30% of the additional residential land area during the planning period (compared to the current status of residential land use) according to the approved land allocation and zoning plan in the provincial planning for the period 2021 - 2030; not belonging to the projects specified in Clause 4, Article 67 of the Land Law;
For the case specified in Point a, Clause 1, Article 1 of the Resolution, the land area for implementing the pilot project must not be on the list of works and projects requiring land recovery approved by the Provincial People's Council according to the provisions of Clause 5, Article 72 of the Land Law.
For the area of national defense land and security land that has been planned to be removed from national defense land and security land that meets the conditions specified in Clause 2, Article 3 of this Resolution but has not been handed over to local management, priority shall be given to the Ministry of National Defense and the Ministry of Public Security to organize the implementation of a pilot project to prioritize sale, lease, and hire-purchase for officers and soldiers of the armed forces according to the provisions of law.
The Resolution takes effect from April 1, 2025 and will be implemented for 5 years.
Ministry of Finance proposes taxing house and land sales based on ownership period
Recently, the Ministry of Finance has submitted to the Government a proposal to develop a draft Law on Personal Income Tax (replacement). In particular, the Ministry has proposed amending and supplementing regulations on taxable income of individuals from real estate transfers to ensure consistency with the 2024 Land Law.
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| The Ministry of Finance's tax proposal directly targets real estate speculators. Photo: Thanh Vu |
Specifically in the submission, the Ministry of Finance said that the current personal income tax policy does not differentiate according to the transferor's real estate holding period.
Meanwhile, a number of countries around the world have used tax tools to increase the cost of speculative behavior and reduce the attractiveness of real estate speculation in the economy, including personal income tax.
Notably, some countries also apply taxes on profits from real estate transactions based on the frequency of transactions and the time between buying and selling the property. The faster this time occurs, the higher the tax rate, and the slower it occurs, the lower the tax rate.
The Ministry of Finance cited that in Singapore, land bought and sold in the first year is taxed 100% on the difference in value. After 2 years, the tax rate is 50%. By the third year, the figure will be 25%.
In Taiwan, real estate transactions made within the first 2 years after purchase, the tax rate is 45%. Made within 2-5 years, the tax rate will be 35%. Within 5-10 years it is 20% and after 10 years it is 15%.
According to the Ministry of Finance, in order to have a reasonable level of regulation and avoid speculation and real estate bubbles, the State can study to collect tax on personal income from real estate transfers based on the holding period as experienced by some countries.
Regarding the specific tax rate, the Ministry of Finance believes that it needs to be studied and determined appropriately, reflecting the actual operation of the real estate market. In addition, the application of personal income tax policy on real estate transfers based on holding period needs to be synchronized with the process of perfecting policies related to land and housing.
Besides, the synchronization and readiness of information technology infrastructure for land and real estate registration is also an important factor determining the success of the policy.
Expectations of real estate investors' solvency to recover
The residential real estate industry report based on data from the top 30 residential real estate companies in terms of revenue, widely announced by VIS Rating on the afternoon of November 28, stated that real estate sales in Hanoi and Ho Chi Minh City in the third quarter of 2024 increased by 48% compared to the previous quarter, the highest level in the past 4 quarters. Housing demand remains strong, reflected in high absorption rates and strong growth in home loans at 7%, compared to only 1% in the same period last year.
Expectations of rising home prices, combined with lower down payments, will continue to drive strong demand from homebuyers. Many developers such as Vinhomes, Nam Long, Nha Khang Dien, An Gia and Nha Ba Ria – Vung Tau have recorded increased sales, mainly in the high-end segments.
However, the revenue and profit for the first 9 months of 2024 of the investors in the report's watchlist decreased by 20% and 43% respectively compared to the same period last year, due to the decrease in handover volume from weak sales in 2023. Therefore, it is expected that more than 60% of investors will not complete the profit plan for the whole year of 2024.
In 2025, VIS Rating expects developers to increase the number of new projects, helping to improve their sales and cash flows. The industry's debt service capacity will remain weak in Q3/2024, but leverage is expected to be controlled thanks to new regulations and developers' cash flows will improve thanks to increased sales.
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| It is expected that the debt repayment capacity of real estate investors will start to improve from the weak level of 2023 - 2024. Photo: VIS Rating |
As of Q3/2024, more than half of the developers monitored by VIS Rating had weak leverage and debt service profiles. This was mainly due to excessive leverage for project development in the 2021-2023 period and the accumulation of unfinished projects and unsold inventory as market sentiment deteriorated from 2023.
But as sales progress improves, VIS Rating expects real estate developers’ debt repayment capacity to start improving from the weak level of 2023-2024.
With a positive outlook for new project sales and cash flows, developers’ debt coverage ratios will gradually improve. New regulations issued in July 2024 will limit the use of debt for new projects. Therefore, VIS Rating expects debt growth to continue to slow from a high of 15%/year in the period of 2022-2023.
Hanoi will have the most modern Opera House, over 25,000 m2 wide.
Recently, Vice Chairman of Hanoi People's Committee Duong Duc Tuan signed Decision No. 6132/QD-UBND approving the detailed planning project of the central spatial axis of Quang An peninsula, scale 1/500.
Accordingly, the total area of the planned land is about 44.1 hectares. The project will include a thematic cultural and artistic park, religious and belief facilities, entertainment areas, and hotel and commercial services.
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| Perspective of the new Opera House. |
Notably, Quang An peninsula is also the designated site for the construction of the city’s new Opera House. This will be a large-scale, modern work of art, representing the image of the capital. The theater area will be built on an area of over 25,000 m2 with a total floor area of 42,000 m2.
Previously, in a conference to gather public opinions in July 2022, the then Vice Chairman of Tay Ho District, Mr. Nguyen Le Hoang, affirmed that the theater would not greatly affect the water surface space and would not be located within the water surface area of West Lake.
In addition, another piece of information that the public is interested in is the identity of the designer of this important project. The person who was “chosen and entrusted with the gold” is Mr. Renzo Piano, a famous Italian architect. He is the “author” of Kansai International Airport (Japan) – the first airport built at sea; the Parco della Musica Auditorium (Italy) – one of the largest performing arts projects in Europe…
In the design of the Opera House in Quang An Peninsula, Mr. Renzo Piano came up with the idea of a roof shell structure only about 200 - 600mm thick. The super thin structure was conceived by the architect 40 years ago - a time when construction techniques could not meet this special requirement.
Not only does the new Opera House have one of the most unique roofs in the world, it also uses many advanced technologies and design techniques. The entire wall of the main auditorium is equipped with a system of acoustic panels that can be operated mechanically.
For each different type of performance, the acoustic panels will be controlled to close, open, up and down in corresponding directions and positions. From there, ensuring sound reflection, sound absorption and reverberation time suitable for the requirements of each art program.
Soc Son land auction: Paid up to 30 billion VND/m2, then "too scared, asked to withdraw"?
According to a source from the reporter of the Investment Electronic Newspaper - Baodautu.vn , in the auction of 58 plots of land in Quang Tien commune, Soc Son district (Hanoi), when they saw that they no longer had a chance to win the beautiful plots of land, many people paid unreasonably high prices.
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| Customer's bid in round 6. Because the price was pushed up too high, the participant withdrew. |
Specifically, in the 5th round, some people wrote down their bids for land up to more than 30 billion VND/m2. Many other plots of land were also bid at very high prices, around 60 - 101 million VND/m2. However, in the 6th round - the final round, they asked not to bid any more.
In the end, only 22/58 plots were successfully bid, with prices ranging from 32 to 50 million VND/m2. All those who “shouted” high prices in round 5 asked to stop bidding in round 6.
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| The price is paid in round 5. |
Sharing with reporters, the source - who is also a direct participant in the auction - said that the land lots here only cost an average of 35 - 40 million VND/m2. The associations and groups that participated in the auction this time did not really understand the market, so they lost their opportunity. The impulsive bidding action not only did not solve the problem, but also damaged the image of land auctions, causing negative impacts on the market.
“I hope the authorities will thoroughly review this auction. This is a deliberate, organized act that disregards the law,” the indignant person said.
58 plots of land are put on the "floor" with a starting price of 2.8 million VND/m2. Area from 90 - 220 m2. Deposits for plots of land range from 44 - 111 million VND/lot. The auction will be conducted by direct voting through 6 mandatory rounds.
Previously, in March 2024, a land auction in Hoai Duc was canceled due to signs of violations. Accordingly, in the first round of the auction, 15/33 plots of land were bid up to 100 - 180 million VND/m2, from a starting price of only 57 - 62 million VND/m2.
Then in round 2, the customer who offered the highest price did not bid and was deliberately disqualified, creating conditions for the person who offered the lowest price in round 1 to win the auction. Considering that the customer showed signs of violating the regulations on property auctions, the organizing committee sealed all auction registration documents and bid forms to transfer to the police agency for investigation and handling according to the provisions of law.
Binh Dinh auctions to find investors for residential project worth over 1,700 billion VND
The Property Auction Service Center (Department of Justice of Binh Dinh province) has just announced the auction of land use rights to implement the residential, service and educational project west of Tay Son street.
Accordingly, the auctioned land belongs to the Binh Dinh Transport Vocational Training Center and adjacent areas located in Quang Trung Ward, Quy Nhon City. The land area is over 6.3 hectares, of which the land area for building adjacent houses is over 2.5 hectares; the land for commercial and service works is over 0.4 hectares...
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| Planning of Residential, Service and Education Area Project West of Tay Son Street. |
The project scale includes 238 adjacent residential lots (investors must build the rough construction and complete the exterior, maximum height of 4 floors); construct commercial service buildings for tourism activities, office business (maximum height of 5 floors).
In addition, the investor must be responsible for investing in completing the technical infrastructure of the educational land with an area of 0.4 hectares; paying money equivalent to the value of the land fund invested in building the technical infrastructure system to build social housing (the land fund is set aside for 20%, about 0.5 hectares for developing social housing).
According to the Property Auction Service Center, the starting price of the property is over VND 558 billion, with a step of 5% (over VND 27.9 billion). The auction will be held at 8:30 a.m. on December 21, 2024, at the Property Auction Service Center Hall, No. 37 Phan Dinh Phung Street, Quy Nhon City, Binh Dinh Province.
The project implementation cost is 1,144 billion VND (excluding land use fees for winning the land use right auction). The project implementation progress is within 48 months from the date of the decision to recognize the auction results or approve the investor.
Thua Thien Hue auctions "golden" land of more than 1,600 m2 to carry out commercial project
The People's Committee of Thua Thien Hue province said that on December 7, the Land Fund Development Center - Department of Natural Resources and Environment in coordination with Quang Nam Joint Stock Company for Finance and Price Auction will conduct an auction to sell assets on land, transfer land use rights in the form of land lease to implement the investment project of the Commercial Service Area at the land plot No. 47 Hai Ba Trung, Hue City.
Accordingly, the land plot at 47 Hai Ba Trung has an area of 1,646.6 m2; with assets on the land attached to the auctioned land including a 3-storey office building, a 2-storey office building, a guard house with a construction area of 685 m2, floor area of 1,628 m2. With a land use term of 50 years, from the date of the Land Lease Decision of the People's Committee of Thua Thien Hue province, the money is collected once for the entire lease term.
The expected starting price for the auction of the land and house is 100.42 billion VND. Of which, the starting price for land use rights is 93.47 billion VND, the starting price for assets attached to the land is 6.94 billion VND. With a deposit of more than 20 billion VND, each price step for land use rights is 1.8 billion VND, for assets attached to the land is 140 million VND.
According to the People's Committee of Thua Thien Hue province, after the auction, the land will be invested in a 9-storey commercial and service area project. The products and services provided by this project are essential commercial, service, tourism, entertainment and recreation services.
The project has a total investment of more than 233,047 billion VND. Of which, the investor's capital contribution must ensure at least 20% of the total project investment capital. The project implementation progress shall not exceed 36 months from the date of land allocation or land lease, in which the construction commencement shall not exceed 12 months from the date of land allocation or land lease.
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