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Low-cost apartment incentives
In a bid to boost investment and ensure social welfare, the government last week announced that investors would enjoy more incentives for low-cost apartment projects.
Vice minister of Construction (MoC) Nguyen Tran Nam said the draft proposal had been given the governmental in-principal approval and the measures would boost investment, particularly in the construction sector. Nam said issuing incentives for low-cost housing projects would satisfy the rising demand of low-income earners, students and workers at industrial parks and increase the consumption of construction materials.
According to the MoC, about 700,000 of two million state employees and their families and about 200,000 industrial park workers, did not have stable accommodation.
Recently, some investors had turned their sights from high-rise to low-cost apartment projects. Investors like Housing and Urban Development Corporation, Vinaconex and Vietnam-Singapore Industrial Parks Joint Stock Company announced they would take part in the development of social housing. However, investors asked for governmental support for such projects. For example, Vinaconex requested financial support from the government to build six social housing projects across the north and central parts of the country.
Under the MoC’s proposal, investors developing industrial parks would have to make investment plans and clear sites for low-cost apartment projects that provide accommodation for workers at the industrial parks. Afterwards, investors could invest in the projects or call in other firms to develop low-cost apartments.
The investors would be exempt from land rental charges and pay 10 per cent corporate income tax for the whole projects, instead of the normal lelvel 25 per cent. Moreover, within this period, investors would enjoy tax breaks for the first four years and a 50 per cent tax reduction during the following nine years.
“The government will give financial assistance to these projects, such as interest rate subsidies,” Nam said. Nam added that low-income earners could borrow money from governmental funds to buy apartments. However, investors would also have to meet governmental requirements on leasing and selling prices of low-cost apartments. The MoC announced that 50 per cent of workers at industrial parks would have stable accommodation by 2015.
Apart from offering incentives for low-cost apartment projects at industrial parks and urban areas, the government would also mobilise about VND8 trillion ($470.5 million) for building low-cost apartments serving students nationwide. The plan would be implemented through 2015 to provide apartments for 60 per cent of all students.
VietNamNet, VIR
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