Real estate services and construction companies in HCM City have asked the Government to review and amend land use fee regulations.

 

Six hundred flats for low-income people near completion in HCM City's Tan My Ward.

 

They say the current regulations are complicated, impractical and the land use fees are too high.

 

According to supplemental regulations issued last year, real estate companies have to pay land use fees according to area they use, based on land prices at the time of payment.

 

The regulations say companies will receive a deduction in the land use fees based on the compensation they paid for land clearance earlier.

 

However, the deduction they receive is based on annual prices of land fixed by local administrations.

 

These factors lead to high land use fees that make it difficult for real estate companies to pay them, Le Hoang Chau, chairman of HCM City Real Estate Association (HoREA), said at a workshop held in HCM City yesterday, June 3.

 

According to the city's Department of Natural Resources and Environment, no real estate company has paid the land use fee since the supplemental regulations came into force last October.

 

Nguyen Viet Tao, chairman of the N.V.T Joint Stock Company, said the regulations are not practical and are causing difficulties for real estate companies in carrying out their projects, both ongoing and new.

 

The Government should collect opinions from real estate companies so that the regulations are more effective, he said.

 

Many representatives pointed out that the current regulations would mean loss of revenues for them.

 

They complain that the land use fee real estate companies have to pay currently is an unknown quantity, so they cannot accurately calculate their investment in a project in order to take a decision on its implementation.

 

The land use fee is now dependent on property assessment consultants and open market prices, which means there is no reliable, regular benchmark based on which the calculations can be made.

 

Luong Tri Thin, general director of Dat Xanh Real Estate Service & Construction Company, said that the complicated procedure in assessing land prices also make it difficult to pay the land-use fee.

 

Le Ngoc Tu, head of Binh Dan Housing Development Company, said that the city People's Committee allowed the company to change the land use purpose (from agricultural to residential, for instance) for 14,000sq.m to build a residential apartment project at the end of last year. After completing work on the project's infrastructure, the company met with city's Department of Finance to pay the land-use fee.

 

The department asked the company to hire a company specialising in assessing land prices at the time they wanted to pay, he said.

 

It took the company a long time to know how much it would have to pay, and it turned out to be too high at more than VND54 billion (US$2.8 million) for the 14,000sq.m area.

 

Thin also wondered whether the price assessed by the consultant was accurate. In such situations, disagreements over land prices would occur sooner than later, he felt.

 

Do Thi Loan, Secretary General of HoREA, said relevant authorities should quickly report on the difficulties real estate companies are facing and review regulations concerning zoning, land prices, land recovery, compensation and resettlement.

 

Chau also asked the Government to effect changes in the deductibles that would accrue to the companies based on the compensation paid for land clearance.

 

The deductible should be based on the actual money paid by the real estate company and not the agricultural land value, he said.

 

The Government should also allow companies to pay land-use fees based on the actual built-up area and not the total project area. This would encourage companies to allot more area for public works, he said.

 

Provincial People's Committee should issue a common framework of prices valid for three to five years, making it easier to calculate costs, compensation and land-use fees, he added.

 

Many representatives said at the meeting that the new method of calculating land use fees had prevented them from carrying out low-income housing projects.

 

Chau suggested that the Government exempts companies investing in low-income housing projects from having to pay land use fees.

 

Representatives of State agencies said they would submit the information and suggestions made by the companies to the Government.

 

VietNamNet/Viet Nam News