HoREA has just sent a document to the Prime Minister and the Ministry of Construction proposing a number of solutions related to social housing.

Notably, regarding the VND120,000 billion credit package for social housing, which has now been increased to VND125,000 billion (due to another joint stock commercial bank participating with VND5,000 billion), HoREA proposed that the State Bank consider expanding the loan eligibility to 2 more borrowers.

Accordingly, it includes buyers of commercial housing priced at 3.5 billion VND/unit or less and landlords who are eligible to borrow to build new or renovate and upgrade boarding houses for workers and laborers to rent.

At the same time, the Association proposed that the Ministry of Construction continue to restore the credit package of VND 110,000 billion, interest rate of 4.8-5%, maximum loan term of 25 years that the Ministry of Construction proposed on February 17, 2023 to implement the social housing policy.

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HoREA proposes that home buyers with a price of 3.5 billion or less can borrow from the 125,000 billion VND package. Photo: Hoang Ha

The Association also proposed that the Ministry of Construction consider submitting to competent authorities to consider expanding the beneficiaries of social housing policies to those who are not subject to personal income tax or subject to personal income tax from level 1 or below.

Regarding land funds for social housing development, the Association recommends that localities allocate sufficient land funds for social housing development when establishing and adjusting construction plans and implementing bidding to select investors to implement projects using land for social housing projects according to the provisions of the Bidding Law 2023. From there, it is possible to select capable investors and effectively exploit and use public land funds (clean land) that have been planned to develop social housing, overcoming the waste of land resources as happened before.

When the 2024 Land Law comes into effect, localities can also conduct bidding to select investors to implement projects using land for social housing projects in cases where the land has not been cleared, interspersed with "public land" and "private land" as prescribed in Article 126 of the 2024 Land Law.

In addition, the Association proposed to supplement or increase preferential policies for investors in social housing projects.

Specifically, HoREA proposed that the draft Decree regulating the development and management of social housing consider increasing the standard profit for investors to 15%, instead of only 10% in cases where enterprises create their own land funds and negotiate to buy back land use rights from individuals and households to implement social housing projects.

At the same time, investors are allowed to mortgage the social housing project itself to borrow preferential loans or commercial loans.

The Association proposed that the Ministry of Construction agree with the Ministry of Finance to propose supplementing the Tax Law to stipulate a 70% reduction in value added tax and corporate income tax for social housing projects to encourage project development.

Along with that, the Association proposed that the Ministry of Finance consider the proposal to amend the Personal Income Tax Law, increasing the family deduction from 11 million VND to 15 million VND for employees and from 4.4 million VND to 5.5 million VND for dependents. Increase the taxable level 1 to 75 million VND/year instead of only 60 million VND/year as currently regulated to suit the current practical situation.

What to do to borrow the preferential credit package of 120,000 billion? Information about the credit package of 120,000 billion for lending to businesses and social housing buyers is considered one of the most positive signals after the conference on the real estate market chaired by the Prime Minister on February 17.