|
Not fair, say homeowners stuck with huge land use tax bills
A land use tax conundrum has developed for many home buyers in Ho Chi Minh City’s Phu My Hung Urban Area.
Those who purchased properties several years ago are being asked to pay tax on much higher evaluations because of the delay in receiving titles from the developers. In some instances, the taxes amount to a significant proportion of the property value, putting them beyond the buyers’ reach. Land use and property titles can be registered only if the tax is paid.
Truong Ngoc Hanh bought a 95-square meter apartment at the My Vien Project in 2006. Over the past three years whenever she asked about her land and house titles, she was told by the developer to wait.
The wait was finally over about two months ago. But together with the good news came a land tax bill of more than VND490 million (US$27,500). Hanh was given one month to clear the debt or pay a daily fine of 0.05 percent of the total bill, or around VND250,000.
Hanh said as she could not afford the tax bill that equaled more than one third of the apartment value, she had to sit and watch the tax penalty balloon to VND5 million.
For several other homebuyers, the tax bills are even bigger and they have no one else to blame except the property developer, whom they hold responsible for the delay in giving them property titles.
Le Tran Xuan Trang, owner of a villa on Nguyen Binh Street, said she has just received a land tax bill of VND1.6 billion.
“I bought the house in 2004 and the developer transferred it to me in 2005. If I had been granted the ownership by Phu My Hung Corp. in 2007, for example, I would have had to pay a land use tax of VND3 million per square meter.
“But now the tax is VND12.1 million per square meter, which means the paperwork delay has costing me taxes four times higher than in 2007.”
Trang said it had already been inconvenient enough to live in a house of her own without an official title for several years. “Now if we have to pay a land tax bill worth the price of a house in order to receive the title, it is not reasonable.”
Land use taxes in Ho Chi Minh City are calculated by land valuations set by the city administration and the values have typically increased every year. Under the land valuation system for 2009, property valuations in some parts of District 7, where infrastructure is said to be improved, have doubled from a year ago.
Hundreds of homeowners in Phu My Hung last week came to Phu My Hung office, complaining it was the fault of the developer that they did not receive titles when land values were still low. Some said they felt cheated as they thought they’d already paid land use taxes to the developer.
According to the tax agency in District 7, Phu My Hung Corp. is a foreign invested firm and is only allowed to lease land for its residential projects. Homebuyers will be asked to pay land use taxes when they apply for land titles.
Bui Thanh Son, deputy general director of Phu My Hung Corp., said customers of the company have paid land use taxes themselves since 2004.
It has never been any problem until this year, when land valuations and taxes set by the government are much higher than last year but property prices in the market have fallen by half, Son said.
Phu My Hung Corp has given land and house titles to 4,000-5,000 customers since 2004. There were as many homebuyers still waiting for their ownership deeds.
Many customers were eligible to receive the titles now but were refusing to pay the land use tax, Son said, explaining that the current high land use taxes in the area would make properties there no longer as attractive.
Answering the question about the delay in getting the title, Son told Thanh Nien last week it is not easy to speed up the process.
“It takes at least 18 months to finish the construction of a project. Then the developer will need to complete other paperwork first before applying for land and house titles for customers.”
However, an official at the HCMC Department of Construction said a property title is granted within 30 days if the application is approved. If there are delays, it means the developers have failed to meet all the requirements during construction.
But homebuyers are the ones having to pay for the consequences of paperwork delays.
Lawyer Nguyen Sa Linh told local newswire VnExpress that legally speaking Phu My Hung customers will have to pay the land use taxes.
“It is stated in the contract that customers will pay land use taxes. As a result, if they don’t pay the taxes, they will get have double trouble: violating the contract and being fined by the tax agency.”
Many homeowners have already requested that they are allowed to pay land use taxes at rates that existed when they made the purchase.
The city government has said it would find a solution for the problem that can balance the interests of all sides.
thanhnien, vietnamplus
|
