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What caused HCMC’s land use fees to drop sharply?

Ho Chi Minh City Real Estate Association (HoREA) said that the revenue from the state budget comes from the real estate market and from land sources, especially land use levies and corporate income tax revenues. From the real estate business for the 2011-2021 period in Ho Chi Minh City, It reflects the real situation of the city’s real estate market and also shows the trends and developments of the country’s real estate market.

In particular, the total land use fee levies in the period 2011-2021 only reached 132,830 billion VND, or only 4.59% of HCMC’s total budget revenue during this period.

In the 2011-2014 period, land use charges in these 4 years declined sharply as a result of the “frozen” real estate market crisis in the 2008-2013 period (except in 2010 when the market recovered) and hot growth. ). Since the beginning of 2014, the market has recovered and re-grown, so that the collection of land use levies has increased since 2015 to reach VND 16,073 billion, 2.66 times higher than 2014.

In the 2016-2021 period, the collection of land use levies reached VND 82,932 billion and only contributed 5.9% of the city’s total budget revenue. During this period, 2017 was the peak year of real estate market development in the entire 2011-2021 period, resulting in the highest amount of land use levies (VND 21.706 billion), but also only contributed 6.19% of the city’s total budget revenue. in 2017. The increase in revenue from land use levies was mainly due to the large number of old projects that were approved before the 2014 Housing Law came into effect (1 July 2015), especially before the enactment of SK 99/2015/ND-CP (15 December 2015).

    What caused HCMC's land use fees to drop sharply?  - Photo 1.

After this point, almost all commercial housing projects are stuck in the investment procedure because Clause 4, Article 23 of the 2014 Housing Law and Clause 2, Article 18 of Decree 99/2015/ND-CP stipulates that Only 100% of residential land will be designated as investors.

In particular, the levy of land use fees in the last 4 years (2018-2021) continued a sharp downward trend due to the lack of supply of housing projects and products. In particular, the collection of land use fees in 2020 was only 7,634 billion VND, equal to half of revenues in 2019 and only a third of land use costs in 2017; The collection of land use levies in 2021 will only amount to 7,560 billion dong, almost equal to 2020 revenues and also only approaching a third of land use levies in 2017, with the above reasons coupled with the impact of the Covid-19 pandemic.

Land rent collection of 132,830 billion VND in the last 11 years accounts for a low proportion of 4.07% of the city’s total budget revenue.

“The results of APBN receipts from land, especially land levies and land rents as above, do not accurately reflect the resource potential of land, but budget revenues from land could be reasonable to reach around 15%. of the total regional state budget revenue,” said the association.

Corporate income tax revenue from real estate business in 04 years (2017-2020) was only 15.376 billion VND and tends to decrease. But, in particular, there are also some companies and real estate companies with high profits, so that corporate income tax increases, especially for businesses designated as project investors.

In this regard, HoREA comments: “Appointment as an investor of projects with public land and offices is also a “minus point” in terms of the opacity of the real estate market, which is also part of the puzzle. fertile ground for interest groups and friendly businesses.” .

According to the Association, in 2021, the highlight of Ho Chi Minh City’s budget revenue was the collection of registration fees of VND 5,042 billion, 4.3 times higher than revenue in 2020, which is half of the total. property registration fees in the period 2016-2021 have shown that real estate transactions have recovered and tax management is very effective.

https://cafef.vn/dieu-gi-khien-nguon-thu-tien-su-dung-dat-cua-tphcm-sut-giam-manh-20220314103730621.chn


According to Phong Linh

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