President HoREA: Need a high tax on those who have a lot of real estate

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Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association (HoREA) proposed the same when speaking at the seminar “Awake in the land fever” held by Nguoi Lao Dong Newspaper on the morning of April 8.

According to Mr. Le Hoang Chau, the investment needs are legitimate of all people and economic sectors. With the real estate market, there are many F0 investors (first time participating in the market) participating in the market, so the crowd sentiment is understandable because they lack knowledge and experience.

Chairman HoREA emphasized the current land fever, really real estate price fever in all types, not only land and agricultural land but also apartment prices, villa projects, townhouses and also old urban areas, the price of housing in the old urban area also increased very high.

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Mr. Le Hoang Chau proposed measures to combat soil fever. Photo: Employee

Not to mention, the impact of the Covid-19 epidemic has caused many businesses to divert their investments, in which real estate is a channel with the characteristic of storing assets safely with the mentality that even though money is devalued, land no devaluation.

“The interest rate on savings deposits has never been so low. Real estate enterprises are allowed to borrow at the lowest interest rates in recent years. Low interest rates also contribute to the direction of savings flow to real estate. In addition, the crowd mentality is somewhat from the top, brokerage because the whole country only about 300,000 brokers are trained in practicing certificates, so it requires professionalism, business ethics is very difficult. And it is difficult for some investors to price and blow prices”, Mr. Le Hoang Chau analyzed.

The implications of the price fever are not new, occurring more than 10 years ago. As the story of Nhon Trach City, Dong Nai province with 5 times of price fever and 5 times of falling “bubbles” and the last investor “embraces”, if not withdrawn in time, he loses assets. This consequence caused many investors to be damaged or even bankrupt while their real estate was abandoned. Lessons learned from the previous land price fever, when the fever passed through abandoned agricultural land and not put into use.

“The big consequence of the land fever is that a large number of middle and low income people lose their opportunities because the price level is pushed up too high. As recently, there is a project costing 30-33 million VND / m2 but after fever, the selling price has been pushed up to over 50 million VND / m2 … And the chance of housing consumers with real needs is lost “, Mr. Le Hoang Chau said.

Regarding solutions to eradicate land crazes, HoREA leaders proposed from the perspective of experienced state management from some countries that when dealing with this problem, it is necessary to tax very high transfers to suppress the will of investors. Specifically, if the investor buys and sells again, it will be highly taxed in the first 2-3 years when transferring.

At the same time, the state also needs to tax those who have a lot of real estate and levy high taxes if land is not put to use. Currently, the State has a policy of land acquisition, which is slow to put into use, but only recovers real estate projects that are not in use. While in China they do these tools very well, like when there is a “bubble” the local government immediately imposes high tax rates.

While in Vietnam, the tax rate under the tax law must be passed by the National Assembly, so it is not timely, so this tax rate can be assigned to the Government to decide in accordance with the market development.

Even with the credit mechanism, lending 70% of the value of collateral can create opportunities for investors to borrow more. This credit policy also needs to change at periods of housing price fever, such as reducing the loan limit from 70% to 30-50% depending on the period, controlling the investment in surfing through the flow of credit into the real estate market.

In addition, planning tools, mainly provinces, need land use planning, have annual land use plans, for example, in which direction for the development of HCMC, each year will be planned. This is within the reach of the authorities of the provinces and cities, so it should be implemented effectively, increasing the supply of the real estate market and controlling the real estate market.

Source: ndh.vn – Translated by fintel.vn