No increase in profits for social housing businesses

On the afternoon of September 30, at the regular Government press conference for September 2023, the press raised the issue of social housing development with the leaders of the Ministry of Construction.

The recent fire in Khuong Ha Street has further demonstrated the urgency of developing social housing. Although there have been many support policies in the past, businesses still cite many reasons for the difficulties in implementing social housing projects such as low profits, difficulty in accessing credit or land funds, etc.

“Why doesn’t the State take the lead in investing in social housing projects instead of waiting for businesses? What is the solution to speed up the construction of social housing, especially in big cities like Hanoi and Ho Chi Minh City?”, the press asked the Ministry of Construction.

Answering this question, Deputy Minister of Construction Nguyen Van Sinh said that according to the provisions of the law on housing, including the development and investment of social housing, the law clearly stipulates the form of the State as the investor using budget capital, as well as mobilizing resources from enterprises.

“Both forms are regulated by law, there are no restrictions on the development and investment of social housing,” said Deputy Minister Nguyen Van Sinh.

Real Estate - Ministry of Construction: No increase in profits for businesses building social housing — Deputy Minister of Construction Nguyen Van Sinh.

Speaking further about this content, Minister and Head of the Government Office Tran Van Son said that in developing social housing, the State performs 3 tasks: Planning, issuing policies and mechanisms, and inspecting and examining. Regarding being the investor, State-owned enterprises and State-owned corporations have been participating in the construction of many social housing projects.

“As in Binh Duong, social housing in this locality is mainly implemented by Becamex Company,” Minister Tran Van Son informed.

Regarding the policy to support enterprises, according to Deputy Minister Tran Van Sinh, previously, land allocation for development and investment in social housing was mainly implemented on 20% of land in commercial housing projects. Currently, the amendment of the Housing Law is being implemented in the direction of assigning local People's Committees to allocate enough land according to the housing development program.

“In the future, the allocation of land for social housing development will be decided by the provincial People’s Committee. This will ensure sufficient land in independent areas as well as in commercial housing projects if conditions and planning are suitable,” Mr. Sinh emphasized.

Real Estate - Ministry of Construction: No increase in profits for businesses building social housing (Figure 2). — The Deputy Minister of Construction said that increasing profits for businesses building social housing will increase housing prices for low-income people (Photo: Huu Thang).

Regarding financial incentives, the Deputy Minister of Construction said that the policies have been clearly stipulated, including: Exemption from land use fees, exemption from income tax, 10% profit, support for loans with preferential interest rates... With these incentives, many investors have participated in developing social housing.

According to Mr. Sinh, in the coming time, in the Housing Law (amended), the Government is proposing a more active support direction. In which, it will continue to exempt land use fees, support corporate income tax, VAT, continue to apply 10% profit, reserve 20% of land area for investors to build commercial service areas; receive support from localities to invest in technical infrastructure, social infrastructure in social housing projects...

“There are opinions that why not increase the profit for social development investors from 10% to 15%. Doing this will increase the price of housing for low-income people,” said Mr. Sinh.

According to Mr. Sinh, the most important issue now is the need to reform administrative procedures. This will help promote investment and participation of businesses in developing social housing.

Regarding access to capital, according to Mr. Sinh, recently the State Bank has implemented many policies to support businesses such as reducing interest rates, debt relief, debt extension... Particularly for social housing, there is a 120,000 billion VND package for investors to borrow at an interest rate 1.5-2% lower than commercial interest rates.

"With support policies, the supply of social housing will be better in the future," Mr. Sinh emphasized .

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