Answer
Question: We are going to apply for investment in development of a new urban area. What are rights and obligations regarding the development of houses for low-income earners in our project that we may have?
Answer:
Pursuant to Decision 67/2009/QD-TTg dated April 24, 2009 (coming into force as from June 10, 2009) of the Prime Minister promulgating a number of mechanism and policies on development of houses for low-income earners in urban areas, an investor of a new urban area project must reserve at least 20% of the new urban area’s land for development of houses for low-income earners and simultaneously be the investor of such project on development of houses for low-income earners.
When selling houses developed for low-income earners, the investor can determine selling prices so as to recover all investment expenses and have a profit not exceeding 10% of the investment expenses. In return, the investor shall be entitled to incentives, which are separately applicable to the project on development of houses for low-income earners, as follows:
- To be exempted from land use fee or land rent applicable to the land area used for development of houses for low-income earners;
- To enjoy value added tax at the rate of zero (0) percent;
- To enjoy corporate income tax exemption for the first four years from when taxable income arises and fifty (50) percent reduction of the amount of corporate income tax payable for the five subsequent years and to apply corporate income tax rate of ten (10) percent for the whole operation term;
- To be assisted in borrowing loans from preferential credit or interest relief sources, funds for development of houses or other preferential funds; to paid for a part or the whole of loan interests following decision of the Provincial/Municipal People’s Committee where the project is located;
- To be supplied, free of charge, with design samples or typical designs of houses as well as technical improvements on construction and installation in order to reduce construction costs;
To be supported by the State to invest in technical infrastructure (i.e. transportation, power supply, water supply and sewage system).
