New land-use fees could thaw property market

Property companies are urging HCM City authorities to reduce land-use fees to turn around the stagnant property market.

During a meeting last week between the city administration and local property companies, property investors asked local agencies to change how the fees are assessed.

Under Decree No 69 enacted in 2009, fees are based on the market value of land rather than the amount that investors have actually paid for it.


Nguyen Xuan Quang, chairman of the Nam Long Investment Joint Stock Company, said that a foreign company taking part in a project with Nam Long complained about the lack of transparency about land-use fees and later withdrew from the housing project.

"Property investors need to be informed about land-use fees when they prepare projects. The land-use fees should be paid according to the progress of projects to ease the project owners' financial burden," Quang said.

"According to current regulations, real estate developers must pay the land-use fee before they are granted construction permits. But it always takes a lot of time for authorised agencies to calculate the land-use fees while the real estate developers cannot develop their projects without construction permits," Le Huu Nghia, director of the Le Thanh Property Company, said.

Nguyen Dinh Tan, director of the Municipal Taxation Department, agreed with the property developers and said the payment of land-use fees should be based on how enterprises sell their property products.

Dao Thi Huong Lan of the Ministry of Finance said the ministry was preparing a draft decree on new ways to calculate land-use fees.

At the meeting, representatives of property firms also complained about the wait of up to three years to be granted a permit for real estate projects.

Tran Trong Tuan, director of the city's Department of Construction, said the time needed to complete procedures for granting a construction permit often lasted 21 months. The maximum wait was 27 months.

In cases that last longer, it was often because enterprises had made errors when completing the paperwork, he said.

Tuan said it was important for the government to simplify administrative procedures, but he also asked enterprises to study the laws to ensure that they obey them.

On behalf of the city administration, Nguyen Huu Tin, vice chairman of the municipal People's Committee, pledged that the city government would quickly adjust regulations that overlap with rules of other local agencies.

To help the property recover, the city would also propose that the Government act on policies that are beyond its jurisdiction, he said.