Out-of-town projects given priority to turn low-cost homes

Housing projects in HCMC’s outlying districts will be given priority for approval on division into smaller condos and conversion into low-cost homes before the central area under a request of the city’s government.

Speaking at a meeting with related authorities and property developers on Monday, Nguyen Huu Tin, vice chairman of the city, said that the housing conversion and adjustment policy aimed to remove troubles facing local companies on condition that such transformation must be subject to the city’s zoning plans. He said that the process of the housing transformation in the city was too slow.

The problem arises when apartment projects awaiting approval for division of condos into smaller units or conversion into low-cost homes have to ensure requirements of the current zoning plans or related criteria. That is because the population of the projects will certainly be increased in sync with these adjustments, thus putting higher pressure on the social and traffic infrastructure.

The municipal Department of Construction at the meeting informed that division of commercial apartments into smaller condos should be done in line with safety and minimum space and usage area criteria. Each condo after being split up must be equivalent to or bigger than a standard commercial flat measuring at least 45 square meters, according to the department.

Meanwhile, commercial housing schemes seeking approval on conversion into budget homes will have their construction density and land usage coefficient raised besides enjoying incentives. Those projects with land usage fees already paid will have the fees either refunded or deducted into financial obligations of the project owners.

Representatives of many districts noted that the approval couldn’t be carried out with multiple projects at the same time and that each scheme should be taken into consideration to avoid exerting infrastructure pressure on the scheme.

Nguyen Thi Nhu Loan, general director of Quoc Cuong Gia Lai Joint Stock Company, proposed State management authorities consider every application in a flexible way to give the nod to involved applicants soon. Loan complained that her company over the past few months had asked for permission to split up flats of a commercial housing project in the outlying district of Binh Chanh from 300 units into 490 units but so far has not received any response from relevant authorities. - Source: The Saigon Times

State employees have easy access to preferential home loans

A number of homebuyers have benefited from the VND30-trillion low-cost home credit package launched by the Government, but it seems state employees have an advantage of accessing the low-interest loans.

A homebuyer identified as M told the Daily that Bank for Investment and Development of Vietnam (BIDV) had approved his application for a VND600-million loan under the preferential lending program.

He has decided to buy a 69.3-square-meter apartment priced at VND14.9 million per square meter at the Khang Gia-Tan Huong project in HCMC’s Tan Phu District. This is one of the nine commercial housing projects eligible for the program.

Both M and his wife are university lecturers, with a combined income of over VND17 million a month. Thus, they can afford to buy the above apartment with a preferential loan interest rate of 6% per annum.

As M is working at a state university, where officials make asset declarations annually, it is favorable for him to have his housing status confirmed.

Loan applicants who are state employees just need to have their employers confirm whether they already have a home. Meanwhile, those who work for companies in other economic sectors than the state one may find it tough as they must seek a confirmation from ward-level authorities.

Another problem is the home purchase contract requirement. Banks want homebuyers to show their home buying contracts to take out a loan whereas homebuyers do not feel secure to sign the contracts with apartment developers without a bank loan being approved beforehand.

“It is a vicious cycle,” said M. He said he took risk when deciding to sign a home contract to complete his loan application.

For about one month, M had shuttled between the lender and the project owner to make the application complete. Eventually, he got VND600 million from BIDV, with a monthly installment of some VND8 million (principal and interest combined).

Also buying a Khang Gia-Tan Huong apartment, Hai in District 8 has been struggling with loan application procedures for over three weeks now. The biggest headache is he needs the authority of the ward where he is residing to confirm his housing status.

He worries he might lose his deposit of VND20 million on the apartment. He lives in a rented home at the moment.

Since the VND30-trillion home loan program was launched in early June, BIDV has approved only two loan applications. Meanwhile, at Vietcombank, six applicants have received the nod, with total loans of VND4.1 billion, said Nguyen Hoang Minh, deputy director of the central bank’s HCMC branch.

A senior source from a BIDV branch said many clients hit the wall when it came to seeking a confirmation from ward authorities.

“It’s hard to confirm if families have other houses than the one where they are staying. Who will be responsible for inaccurate confirmations? Therefore, many homebuyers have been unable to get a confirmation for their loan applications,” said the source.

For property firms in need of preferential loans, only VND9 trillion is available now, but many businesses want to borrow. In HCMC, the list of property developers eligible for loans is still awaiting the confirmation from the Department of Construction, and has yet to be issued to banks.

Banks will be caught in an awkward situation if the loan amount for corporate borrowers in the program runs out after they have signed loan agreements with enterprises.. - Source: The Saigon Times

Budget condo buyers get 50% VAT cut

Those buying and renting low-cost homes from today enjoys a value-added tax (VAT) rate of 5%, down by a half from the old level.

A 50% VAT cut is also given to homebuyers at the commercial projects with flats covering less than 70 square meters each and quoted at below VND15 million per square meter, says a dispatch released by the Ministry of Finance last Friday. VAT reduction is effective from today to June 30, 2014.

In addition, from today, businesses are charged a corporate income tax rate of only 10% on their earnings from budget condo sale and lease. The preferential tax rate is also applied to the low-cost housing projects developed by the State and private organizations and individuals. - Source: The Saigon Times