In the latest proposal sent to the Prime Minister, the Ho Chi Minh City Real Estate Association (HoREA) continues to propose urgent solutions to immediately remove difficulties in cash flow and liquidity for the real estate market.
Soon to remove difficulties for 156 projects, Ho Chi Minh City has tens of trillions of more tax dollars
According to HoREA President, Ho Chi Minh City’s GRDP in the first quarter of 2023 only increased by 0.7% compared to the first quarter of 2022, ranking last among the 5 cities directly under the Central Government and in the top 10 provinces and cities with GRDP growth. the shortest. In which, the real estate business dropped by 16.2%, leading to a decline of 17% in the construction industry.
“Ho Chi Minh City’s low GRDP growth results can be seen because the disbursement result of public investment in the first quarter was only insignificant 2%, but public investment is a driving force for the economy. Next. This is due to the deep decline of the real estate market, leading to a sharp decline in the construction industry, the production of building materials, and interior and exterior equipment,” Chau said.
The deep decline of the real estate market made the GRDP growth of HCMC in the first quarter of 2023 quite low. Photo: Phudong Group
According to Mr. Le Hoang Chau, Chairman of HoREA, dismantling the “mechanism” is the solution that costs the least to the state budget, but it is effective, has a great spread, and to do this, it is necessary to build a develop a standard and correct law, but first of all, it is necessary to develop a “best quality draft law”.
“The Association found that in the past 6 years, the implementation of Clause 1, Article 10 of Resolution No. 42/2017/QH14 has not ensured fairness for all businesses, because it is “only beneficial” for credit institutions. Commercial banks in dealing with bad debts have real estate projects as collateral and “only benefit” the businesses that have caused this “bad debt” (just a minority of businesses).
Even more remarkable is the “pilot” mechanism and policy on project transfer for this “minority” of businesses, but it does not allow it to be applied to “the majority” of “healthy” real estate businesses. other normal (?!)”, grandfather Le Hoang Chauspeak.
“However, it is worrying that there are still a number of provisions of the draft laws” that do not ensure the uniformity, uniformity, or are inadequate and not close to the reality of life. It is better to promulgate a law a little later to have a standard and correct law, than to enact a law that is “inadequate and unfeasible”, which will hinder development”, Mr. Chau said.
As evidence, Mr. Chau said, cOnly 156 projects considering real estate, urban, commercial housing, social housing of 121 enterprises and investors in Ho Chi Minh City are stuck, if the average value of each project is 2,000 billion VND. the total investment amount to about 312,000 billion VND.
If obstacles can be removed to return to normal, the State can collect 10% VAT for VND 31,200 billion; If the profit is 20%, the State can also collect 12,480 billion dong of corporate income tax and other derivative tax revenues, create jobs…
Proposal to “pilot” real estate project transfer according to Resolution No. 42/2017/QH14
TIn response to the difficulties of the real estate market, HoREA proposed the Government and the National Assembly Standing Committee to consider allowing businesses to transfer real estate projects under agreement under the pilot mechanism specified in Resolution No. 42/2017/QH14 dated June 21, 2017 of the National Assembly to immediately remove difficulties in cash flow and liquidity for the real estate market.
In particular, this solution also facilitates real estate businesses themselves to agree to buy, sell and transfer real estate projects to create “cash flow and liquidity”.
“This is a solution that businesses can agree to implement themselves outside of the capital market (bond market) and credit market, so it does not create additional burden for credit institutions,” Chau affirmed.
According to HoREA, dismantling the “mechanism” is the solution that costs the least to the state budget, but it is effective and has great pervasiveness. Photo: Phudong Group
Specifically, the HoREA President cited that, if allowing the same application of the pilot mechanism to transfer real estate projects under Resolution 42, it will have an immediate positive impact and together with the mechanism and policies. Decree 08/2023/ND-CP will remove difficulties in cash flow and liquidity for real estate businesses, including those issuing bonds that are about to come due.
This solution also supports bondholders and facilitates the open development of the real estate project transfer (M&A) market, while respecting and ensuring business autonomy and freedom of business. according to the provisions of Article 7 of the Enterprise Law 2020″, Mr. Chau added.
Not to mention, allowing businesses to transfer projects according to agreement and demand, the State can both collect taxes and enhance the effectiveness and efficiency of state management of the real estate market. .
In particular, this solution also increases transparency, overcoming the situation of project transfer “hiding” in the form of share transfer, leading to change of shareholders, change of business owner, but actually the transfer of shares. The project may cause loss of state budget revenue.
In addition, HoREA also proposed to elaborate and complete the content of Clause 4, Article 41 of the Draft Law on Real Estate Business (amended), which adds the following provisions: “In case the transferor of a project, a the part of the project that has not yet fulfilled its financial obligations to the State, the transferee shall have the responsibility and obligation to fulfill this financial obligation.
In order for Ho Chi Minh City to regain its growth momentum and maintain its role as the economic locomotive of the southern region and the whole country, the Ho Chi Minh City Department of Statistics suggested that the city focus on handling bottlenecks and bottlenecks in land. . At the same time, resolving legal conflicts over procedures for land allocation, determination of compensation unit prices, payment and settlement procedures for capital construction to speed up the disbursement of public investment capital.
In the immediate future, Ho Chi Minh City needs to prioritize solving difficulties for projects that are slow to be disbursed, especially focusing on disbursement of key regional connectivity projects such as Metro No. 1, Metro No. 2, Ring Road. 3, Terminal 3, Ho Chi Minh City – Moc Bai Expressway.
In addition, Ho Chi Minh City needs to continue to effectively implement the support packages of the socio-economic recovery and development program, as well as focus on developing supporting industries, in parallel with accelerating the formation become the Vietnam International Financial Center located in Ho Chi Minh City to attract external resources to invest in the city.
