Solutions for revitalizing the Vietnamese real estate market

Vietnam's property market is expected to recover if legal obstacles will be removed.

>> Real estate market expected to roar back this year

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), stated that in order to return the Vietnam property market to a correct, healthy, and sustainable trajectory, the Government should first issue a Decree amending and supplementing a number of articles of Decree No. 44/2014/ND-CP on land prices in order to remove bottlenecks in land valuation so as to calculate land use fees and land rent for hundreds of commercial housing projects, ensuring no loss of state budget revenue, issuing ownership certificates to buyers, helping project developers to fulfill their obligations to the State and customers.

Second, HoREA proposed amending Point c, Clause 7, Article 31 of Decree 31/2021/ND-CP and related legal regulations to implement Government Resolution 33/NQ-CP dated March 11, 2023 and in accordance with National Assembly Resolution No. 98/2023/QH15 on piloting a number of specific policies to develop Ho Chi Minh City, including procedures to approve investment policy for social housing projects, commercial housing projects, and commercial housing projects.

Third, this Association proposed extending Clause 1, Article 3 of Decree No. 08/2023/ND-CP until December 31, 2024, while temporarily suspending the application of professional securities investor norms in order to bring the corporate bond market closer to international standards.

Fourth, the Ministry of Finance should swiftly propose to the Government an amendment to Decree 132/2020/ND-CP to abolish the 30% interest expense ceiling for firms for associated transactions, in order to represent their investment, production, and commercial operations honestly, fully, and promptly. Simultaneously, government authorities should tighten controls and aggressively prosecute firms with associated activities that engage in "transfer pricing" and inflate expenses in order to illegally escape taxes.

Fifth, at the request of the Prime Minister in Official Telegram 1177/CD-TTg dated November 23, 2023, HoREA proposed that the State Bank of Vietnam review and evaluate the implementation of Circular No. 02/2023/TT-NHNN, Circular No. 03/2023/TT-NHNN, Circular No. 06/2023/TT-NHNN, and relevant regulatory legal documents to remove unsuitable regulations that impede credit access for people and businesses and to effectively support the corporate bond market.

>> Real estate outlook in 2024: Credit conditions are expected to be relaxed

Sixth, the associations recommended that the government work with the National Assembly Standing Committee to propose that the National Assembly consider extending Resolution No. 42/2017/NQ-QH14 until December 31, 2024 to assist credit institutions in effectively handling bad debts, including handling collateral assets that are real estate projects.

HoREA propose to extend the Resolution No. 42/2017/NQ-QH14 until December 31, 2024 to assist credit institutions in effectively handling bad debts, including handling collateral assets that are real estate projects.

Because Resolution No. 42/2017/NQ-QH14 has assisted credit institutions in successfully resolving bad debts from 2017 to the present, particularly in dealing with collateral assets that are real estate projects, yet this Resolution will expire on December 31, 2023.

And with the provisions in Clause 3, Article 40 of the Law on Real Estate Business 2023, at credit institutions there will be a type of collateral for bad debts that is real estate projects that only have land allocation decisions, leased land from a competent authority, but the transferor has not fulfilled the project's financial obligations regarding project land including land use fees, land rent and related taxes, fees and charges. Because Clause 3, Article 83 of the Law on Real Estate Business 2023 does not stipulate transitional handling.

"Because the Real Estate Business Law 2023 will take effect on January 1, 2025, there will be a "legal gap" in 2024 because the Law on Real Estate Business 2023 will not be applied during this period, and Resolution 42/2017/NQ-QH14 will have expired," stated HoREA.