Although more than 20 floors have been built, the project has not yet paid land use fees to the state, so it cannot sell houses in the future, putting the business in a difficult position.
Businesses are tied down by land money
As a large enterprise in Binh Duong province, from 2018 to now, Bcons Group has made its mark with dozens of mid-range real estate projects developed, built and handed over to customers. However, from 2023 to now, although new projects have been continuously granted construction permits, this enterprise still faces a huge difficulty: the project has been granted a construction permit, but has not yet received a decision to pay land use fees.
A leader of this group said that Bcons has a project with more than 20 floors, but the Department of Natural Resources and Environment of Binh Duong province has not yet announced the decision on land use fees that the enterprise must pay.
Not having paid the land use fee means that the enterprise cannot build the house selling price of the project, cannot submit documents to the Department of Industry and Trade to get approval for the project to be eligible to sell houses and sign sales contracts with customers. When the conditions for opening for sale are not met, the enterprise cannot mobilize capital to have money for construction.
Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association
Having also built up to the 10th floor, Phu Dong Real Estate Joint Stock Company said that in 2022, the enterprise was approved for investment policy, planning, and construction permit for an apartment project in Di An City (Binh Duong Province). Immediately after receiving the construction permit, the investor received capital support from the bank for construction. Up to now, this project has been built up to the 10th floor, but the land use fee has not been paid yet, because the Department of Natural Resources and Environment has not yet appraised the land use fee.
Like Bcons, Phu Dong cannot open sales of future projects until it has fulfilled its financial obligations.
In Binh Duong, not only the two above enterprises have projects stuck with land use fees, but many other projects, such as PiCity Sky Park of Pi Group in Di An City, A&T Sky Garden invested by A&T Vietnam Technical Trading Investment Joint Stock Company... Not only Binh Duong, but Long An is also in a similar situation. For example, the Destino Centro apartment project in Ben Luc district has been granted a construction permit, but has not been able to pay land use fees.
Mr. Le Van Thang, General Director of Tan Dai Thanh Real Estate Joint Stock Company, said that before 2022, provinces would issue investment policies first, then issue 1/500 planning, then calculate land use fees for businesses to fulfill their financial obligations before issuing construction permits. However, currently, provinces issue construction permits first, while land use fees are appraised and businesses complete them later. However, this step is currently congested, putting businesses in a difficult position.
“If we don’t know how much land use fee we have to pay, we can’t make up the price of the house for customers. And even if we build, if we haven’t paid the land use fee, we won’t be able to open for sale, sign contracts, or collect money from customers, so businesses won’t have money to build. If we borrow from the bank, the interest we have to pay for the loan will have to be added to the house’s selling price later, and if the house price is too high, customers won’t buy it… That’s why businesses are stuck with the land use fee,” said Mr. Thang.
Need to be "untied"
According to Ms. Nguyen Thi Bich Thuy, Deputy Director of the Department of Natural Resources and Environment of Binh Duong province, the reason why local real estate projects are stuck at the land use fee payment stage is because the province lacks appraisal enterprises and it is very difficult to hire enterprises to appraise land prices.
Mr. Nguyen Van Dung, General Director of Hoang Long Real Estate Company, said that the problem of congestion in calculating land use fees for real estate projects for enterprises is not difficult to handle, because the Land Law stipulates that when it is impossible to find an enterprise to appraise land prices, the Department of Natural Resources and Environment proposes to the provincial People's Committee to establish an interdisciplinary team to appraise land use fees for the project. However, in reality, after many violations in price appraisal that have caused losses to the state budget in recent times, local officials are afraid of making mistakes, afraid of responsibility, and afraid of legal risks. To be safe in valuation to avoid the risk of being held accountable later, local officials often choose to approve land prices at high levels or delay approval.
Mr. Dung said that it is necessary to “untie” real estate enterprises in approving land use fees. In particular, the State will review and recalculate land use fees for projects that have been approved for land use fees that enterprises have reported to have unreasonable calculation times and methods. At the same time, exempt enterprises from late payment penalties if there is a conclusion that the project price is determined to be unreasonable.
For new projects that are completing approval procedures and have not yet paid land use fees, state management agencies should finalize the time and calculation method with businesses so that businesses can calculate the costs and effectiveness of the project when implementing it.
Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), said that the prolonged approval of land prices, which can take several years or even decades, not only causes stagnation, but also increases costs for businesses, because while waiting for valuation, businesses still have to bear interest costs and opportunity costs.
According to Mr. Chau, when the approval process is prolonged and the land use value cannot be accurately predicted, it also causes difficulties for businesses in forecasting and financial planning, causing businesses to face the risk of financial shortage or inability to pay debts.
Source: https://baodautu.vn/batdongsan/doanh-nghiep-dia-oc-mac-ket-vi-tien-su-dung-dat-d230829.html
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