Vietnam PM asks to amend real estate tax to avoid speculation

Laws - The Vietnamese prime minister on December 6, 2011 signed Directive No. 2196/CT-TTG issuing a number of measures to strengthen management for real estate market.

Accordingly, to overcome the weaknesses and shortcomings as well as create conditions for healthy and sustainable development of the realty market, the prime minister requested for:

* Strengthening the management and control of market.

* Enhancing the role and responsibility of the state management agencies in inspection and appraisal and allowance of investments in housing development projects and real estate business investment.

* Implementing the restructuring of real estate goods in accordance with market demand and boosting the development of social housing types under the state regulation.

Some tasks for ministries:

* Ministry of Construction: Building a policy mechanism and guiding localities to comply with laws on housing, real estate business and management of housing real estate commodity structure.

In addition, the ministry has been asked to study, build and submit the plan of house for living and house for lease to the government in the first quarter of 2012, which will focus on developing social housing for rent and housing saving scheme.

* Ministry of Finance (MoF): Guiding localities on methods of determining land prices in accordance with the market price in normal conditions towards transparency.

The ministry has been asked to propose real estate tax to avoid speculation and use land resources efficiently and report to the government in the second quarter of 2012.

In addition, MoF will also research and amend regulations on personal income tax (PIT) for the transfer of real estate and submit the decree guiding and amending the implementation of the Securities Law to the government in the first quarter of 2012, including the corrections on model of real estate investment fund to support capital for the real estate market through the stock market channel.

* State Bank of Vietnam (SBV): Continue to direct commercial banks and credit institutions to strictly carry out the government's Resolution No11 to guarantee reasonable and safe credit growth and proportion for real estate sector. In the short term, the central bank will reduce the credit growth and proportion for real estate sector with reasonable route to avoid shocks, at the same time apply measures to increase the liquidity and avoid the freeze of the real estate market.

The central bank will coordinate with the Ministry of Construction to research and guide credit institutions to offer credit policies in accordance with the restructuring process for the real estate market.

The central bank will direct to allocate loans for low-income housing projects for real homebuyers, limit lending for newly started real estate projects and ground clearance and strictly monitor personal loans for real estate business.

Loans will continue to be offered for the real estate projects that will be completed and able to sell and withdraw capital in 2012.