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Reviving the property market
The Ministry of Construction has suggested several measures to revive the property market. It calls for reducing capital gains tax on sales of houses or apartments to prevent evasion. At the same time, it wants a higher tax rate in case a property is sold within a year or two of purchase. For real-estate developers, it suggests cutting value-added tax and income tax on developers of housing projects for low-income buyers, workers at industrial parks and university students.
But it wants higher taxes on people owning more than one property, with a progressive tax imposed on their properties.
In other recommendations, it says around half the money collected as land-use rights should be used for supporting people whose farmlands are acquired for public works find new livelihoods.
It wants regulations on disseminating information about housing revised to ensure that those wishing to buy housing have sufficient access to information about the projects. The current lack of access to such information abets speculation.
It says the opinions of residents affected by a project should be solicited at all stages, from calling for investment to construction and management.
All property transactions should be done through banks to reduce risk and enable tax collection, it says.
Besides, they should be encouraged to be done via property trading floors by offering tax breaks, it says.
However, it wants the floors themselves – around 700 of which have mushroomed since the Law on Real Estate Business took effect in 2009 – to be more carefully overseen.
A recent inspection of 60 of them in the capital resulted in fines for 25 for violations like selling properties that do not meet requirements. For instance, apartments can only be sold when their foundations are finished.
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