No increase in profit margin for social housing businesses

Deputy Minister of Construction Nguyen Van Sinh said that if the profit for investors increases from 10% to 15%, the selling price of social housing will increase accordingly.

At the Government press conference held on the afternoon of September 30, Deputy Minister of Construction Nguyen Van Sinh said that many opinions say that to develop social housing, investors' profits must be increased by 10 - 15%.

But if the profits for businesses increase, the price of social housing will increase accordingly.

Deputy Minister Nguyen Van Sinh. (Photo: Vu Lieu).

“ This will create more burden and difficulties for low-income people - the subjects eligible to buy social housing. Enterprises themselves also believe that, in the current context, investment production achieving a profit of 10% is too good. What they need is administrative procedure reform, local authorities have not yet intervened quickly to resolve issues related to planning and land," said Mr. Sinh.

According to the Deputy Minister, many businesses are currently not interested in investing in social housing projects due to difficulties in accessing loans, limited land funds, and regulations on a 10% profit margin for investors when building social housing.

However, according to the Deputy Minister, when building social housing, businesses also receive support from policies with mechanisms such as: Exemption from land use fees, some types of taxes (value added tax, corporate income tax), preferential low-interest loans, etc.

The draft Housing Law (amended) still maintains the above supports, and adds more practical policies such as exemption from land use fees and land rent. Enterprises are allocated 20% of land fund to develop commercial service areas; localities support investment in technical infrastructure. Investors are also entitled to borrow preferential capital through commercial banks and social policy banks.

In addition, businesses are supported with preferential access to capital and loans with preferential interest rates. Particularly for social housing, there is a VND120,000 billion package with preferential interest rates 1.5-2% lower than the market.

The leader of the Ministry of Construction also said that current legal regulations on housing and investment in social housing development do not limit the scope of investment by enterprises. The state can invest or mobilize resources from private enterprises.

Chau Anh

Source