Pursuant to …;
Enactment of certain mechanisms and policies for developing low-income housing in urban areas
for people with low income in urban areas
______________________________
PRIME MINISTER
Pursuant to the Law on Organization of the Government dated December 25, 2001;
Pursuant to Resolution No. 18/NQ-CP dated April 20, 2009 of the Government;
Considering the proposal of the Minister of Construction,
DECISION:
Article 1. General Provisions
1. The State encourages all economic sectors to participate in investing in the construction of housing for sale (in one lump sum or on credit), rental, or lease-purchase for people with low income in urban areas (hereinafter referred to as low-income housing) through socialization methods. (hereinafter referred to as Decree No. 42/2023/NĐ-CP); 2. Investors in low-income housing projects shall enjoy incentives related to land, tax, credit, and other incentives as stipulated in this Decision.
3. Investment in the construction of low-income housing must be aligned with urban development plans, while also taking into account actual needs, being consistent with the country's socio-economic conditions, and the specific characteristics of each locality; it must be organized and managed according to regulations, ensuring the quality of construction works, effective management and utilization; it must be conducted openly and transparently, avoiding waste, corruption, and loss. Low-income housing projects should be developed harmoniously with commercial housing projects and new urban areas to ensure that people with low income can benefit from public welfare and social infrastructure in urban areas.
4. Provincial People's Committees (hereinafter referred to as Provincial People's Committee) shall review, adjust, or supplement general planning, detailed construction planning, and land use planning of their localities to create land funds for constructing low-income housing; at the same time, they must determine the target for developing low-income housing as one of the basic targets of the socio-economic development plan of the locality; this target must be established annually and for each period, in accordance with the socio-economic conditions and specific characteristics of each locality, and must be implemented and regulated with responsibility systems.
Article 2. Mechanism for Implementing Low-Income Housing Projects
1. Low-income housing as defined in this Decision is housing constructed by enterprises under various economic sectors using self-raised capital. Investors in low-income housing projects shall enjoy preferential mechanisms as stipulated in Article 5 of this Decision.
2. Investors in low-income housing projects are determined as follows:
a) In cases where investors register to implement commercial housing or new urban area projects, they must allocate a portion of the land fund within the scope of such projects according to Clause 2, Article 3 of this Decision to construct low-income housing, and simultaneously assume the role of investor in such low-income housing projects;
b) In cases where investors already have clean land funds (having land use rights according to the law) and register to invest in constructing low-income housing, such investors are the project investors;
c) In cases where investors are assigned land by the State to invest in constructing low-income housing for rent or lease-purchase, such investors are the project investors.
3. Investors in low-income housing projects may operate through the method of selling (in one lump sum or on credit), renting, or lease-purchasing to people with low income and those facing difficulties in housing as stipulated in Article
6 of this Decision. Article 3. Land Fund for Constructing Low-Income Housing
1. The land fund for constructing low-income housing shall be allocated within the planning of commercial housing projects, new urban areas, or separately in accordance with the provisions of Clause 3, Article 1 of this Decision.
2. Commercial housing projects with a scale of 10 hectares or more and new urban area projects within the territory must allocate a minimum of 20% of the residential land area of the project for constructing low-income housing (the proportion of land area for constructing low-income housing in each commercial housing project or new urban area must be determined in the detailed construction planning approved by the competent authority).
3. For localities that still have a land fund of 20% reserved for constructing social housing in commercial housing projects and new urban area projects, this land fund shall be allocated to the project investors for constructing low-income housing. If the project investors do not implement, the Provincial People's Committee shall allocate the land fund to other investors to construct low-income housing for rent or lease-purchase.
3. For localities that still have a land fund of 20% reserved for constructing social housing within commercial housing projects and new urban area projects, this land fund shall be assigned to the project's developer to invest in building low-income housing. In case the project developer does not implement this, the provincial People's Committee shall assign it to another investor to build low-income housing for rent or lease purchase.
Article 4. Design standards, selling price, rental, and lease-purchase price for low-income housing
1. Low-income housing refers to apartment-type housing with a maximum apartment area not exceeding 70 square meters; construction infrastructure technical and social infrastructure indicators shall comply with current Construction Standards. Low-income housing projects may adjust their building density and land use coefficient up to 1.5 times higher than the current Urban Planning Construction Standards, without limiting the number of floors, provided they are consistent with the approved urban planning by the competent authority. t s22. The selling price of low-income housing shall be determined by the project developer based on the principle of covering all costs to recover the investment capital, including interest (if applicable) and a maximum profit rate of 10% of the investment cost; state incentives shall not be included in the selling price of housing.
3. The rental and lease-purchase prices for low-income housing shall be set by the project developer based on the principle of covering all costs to recover the investment capital, including interest (if applicable), management and operation costs, and a maximum profit rate of 10% of the investment cost; state incentives shall not be included in the rental or lease-purchase price; the minimum period for recovering the capital shall be 20 years.
4. In cases of installment purchase and lease-purchase of low-income housing, the buyer or lessee shall pay the initial payment not exceeding 20% of the housing price, except where the buyer or lessee has a different agreement with the seller. The installment payment period and lease-purchase period shall be agreed upon by the seller and buyer or lessee, but shall be at least 10 years.
5. The provincial People's Committee shall be responsible for organizing the appraisal of selling prices, rental prices, and lease-purchase prices, and strictly monitoring the sale, rental, and lease-purchase of low-income housing within its jurisdiction.
Article 5. Investment Incentives for Developers of Low-Income Housing Projects
1. Investors wishing to participate in the development of low-income housing projects shall register with the provincial People's Committee to enjoy the investment incentives stipulated in Clause 2 of this Article.
2. Developers of low-income housing projects shall enjoy the following preferential mechanisms:
a) Exemption from land use fees and land rental fees within the scope of the project;
b) Application of the highest preferential VAT rate (0%);
c) Exemption from corporate income tax for four years from the date of taxable income, and a 50% reduction in corporate income tax for the next five years, with an application of a corporate income tax rate of 10% throughout the operating period;
d) Access to investment credit support from the following sources:
- Preferential loans or interest subsidies according to regulations;
- Loans from local housing development funds and other preferential loan sources (if available);
- Consideration and partial or full interest subsidy support by the provincial People's Committee (depending on the budget capacity of each locality);
đ) Provision of free sample designs and typical designs for housing, as well as scientific and technological advancements in construction and installation to reduce construction costs;
the option to self-implement if they have sufficient capacity as prescribed by law or designate tendering for consulting, construction, and equipment procurement contracts; e) State support for the development of technical infrastructure outside the project boundary (transportation, electricity, water supply and drainage).
e) To be supported by the State in investing in technical infrastructure outside the project fence (transportation, electricity supply, water supply and drainage).
Article 6. Subjects and Conditions for Purchasing, Leasing, or Purchasing on Lease Basis Low-Income Housing
1. Subjects eligible to purchase, lease, or purchase on lease basis low-income housing include civil servants, public officials, employees, members of armed forces receiving salaries from the state budget, and individuals with low income in urban areas.
2. Conditions for purchasing, leasing, or purchasing on lease basis low-income housing
Individuals eligible to purchase, lease, or purchase on lease basis low-income housing must meet the following conditions:
a) Not having housing or having housing but with an average area less than 5 square meters.2/person;
b) Not having received state support for housing or land in any form;
c) For cases of purchasing and purchasing on lease basis low-income housing, they must have permanent residence registration or long-term temporary residence registration in the province or centrally administered city where the project is located;
d) Having low income and lacking the ability to improve their living conditions.
3. Individuals purchasing or purchasing on lease basis low-income housing may borrow funds from commercial banks with state support on interest rates to pay the full price or installments for purchasing or leasing low-income housing.
Article 7. Procedures and Formalities for Determining Eligible Subjects and Implementing Purchases, Leases, or Purchases on Lease Basis of Low-Income Housing
The procedures and formalities for determining eligible subjects, conditions, and implementing purchases, leases, or purchases on lease basis of low-income housing shall be carried out as follows:
1. Individuals wishing to purchase, lease, or purchase on lease basis low-income housing must submit an application confirmed by their workplace regarding their subject status and income level, and by the People's Committee of the commune where they reside regarding their circumstances and current housing situation. After confirmation, the applicant submits the application to the developer of the low-income housing project.
2. The developer is responsible for reviewing and comparing the regulations on eligible subjects and conditions for low-income housing as stipulated in Article 6 of this Decision to sign the contract.
3. After signing the contract for purchasing, leasing, or purchasing on lease basis low-income housing, the developer is responsible for compiling a complete list of eligible subjects who have been resolved and sending it to the Construction Department at the local level where the project is located for inspection (post-inspection).
In case the developer implements sales, leasing, or purchasing on lease basis of low-income housing not in accordance with regulations, the provincial People's Committee is responsible for compelling the developer to refund all subsidized expenses, prohibiting them from undertaking other real estate business projects for two years from the date the project is revoked or the business registration is revoked. In cases of serious violations, they will be held accountable according to the provisions of the law.
4. The provincial People's Committee shall specify the procedures and formalities for reviewing and prioritizing eligible subjects with the need to purchase, lease, or purchase on lease basis low-income housing within its jurisdiction, ensuring compatibility with the economic and social conditions of each locality.
Article 8. Management of Construction Quality for Projects Investing in Low-Income Housing
1. The management of construction quality for projects investing in low-income housing shall be implemented in accordance with the laws on construction quality management (Government Decree No. 209/2004/ND-CP dated December 16, 2004 on construction quality management; Government Decree No. 49/2008/ND-CP dated April 18, 2008 amending and supplementing certain articles of Government Decree No. 209/2004/ND-CP dated December 16, 2004 on construction quality management and guiding documents issued by the Ministry of Construction).
2. Low-income housing projects must be independently assessed for construction quality suitability by an independent consulting organization before being put into use.
Article 9. Methods and measures for managing the low-income housing fund
1. Strictly prohibit the abuse of all forms of preferential policies of the State on the development of low-income housing for profit-making purposes.
2. The project investor shall be responsible for organizing the management of the use and operation of low-income housing in accordance with the laws on housing, and shall not arbitrarily change the purpose of the low-income housing project.
3. Purchasers, lessees, or lease-purchasers of low-income housing shall not rent, sublet, mortgage, or transfer the housing under any form. Purchasers or lease-purchasers of low-income housing are permitted to sell or rent the housing after fully paying the developer and obtaining the Certificate of House Ownership Rights, but must ensure a minimum period of ten years from the date of signing the purchase or lease-purchase contract with the project developer.
4. Within the period of less than ten years from the date of signing the contract, if the purchaser or lease-purchaser of low-income housing has a need to transfer, then they may only transfer to the State or to the project developer or to the target group eligible to purchase or lease-purchase low-income housing according to local regulations. The transfer price of the housing shall not exceed the price of similar low-income housing at the time of transfer.
5. In cases where transactions of low-income housing violate the provisions of Clause 3 and Clause 4 of this Article, depending on each specific case, the value of the support provided by the State will be recovered, the purchase, lease, or lease-purchase contracts will be canceled, the Certificate of House Ownership Rights will be revoked, or other legal actions will be taken as prescribed by law.
Article 10. Implementation Organization
1. Relevant Ministries, sectors, and People's Committees of provinces and centrally-run cities shall be responsible for implementing the tasks assigned in Resolution No. 18/NQ-CP dated April 20, 2009 of the Government.
2. The Ministry of Construction:
a) Directly guide and instruct key localities (Hanoi City, Ho Chi Minh City, and some other localities) and some state-owned corporations to implement investment construction projects of low-income housing in accordance with the provisions of this Decision during the period of 2009-2010;
b) Issue model designs, typical designs of low-income housing; regulations on the management of the use and operation of low-income housing funds; rental contracts applicable to low-income housing projects;
c) Monitor, urge, and compile the implementation situation of this Decision; propose amendments and supplements to suit the actual situation for submission to the Prime Minister for consideration and decision.
3. The Ministry of Planning and Investment shall supplement low-income housing projects into the list of projects eligible for preferential credit loans or post-investment support from the Government.
4. The Ministry of Finance:
a) Guide the implementation of financial and tax incentives related to the policy as stipulated in this Decision;
b) Study and report to the Government to submit to the National Assembly for supplementation of tax incentives at the highest level for low-income housing projects during the last session of the National Assembly in 2009. 5. The Ministry of Natural Resources and Environment shall take the lead and coordinate with localities to review planning and land use plans to supplement land for low-income housing projects, guide the implementation of land-related incentives for low-income housing projects as prescribed in this Decision.
6. The State Bank of Vietnam shall provide guidance on procedures, formalities, and conditions for purchasers or lease-purchasers of low-income housing to borrow money to purchase and lease-purchase housing in accordance with this Decision.
7. People's Committees of provinces and centrally-run cities:
a) Organize and direct investigations, surveys, compilation of needs, and the formulation of annual investment construction programs for low-income housing in the period of 2009-2015 within their jurisdiction;
b) Review, adjust, or supplement land funds for developing low-income housing in general and detailed urban planning of the locality; recover land funds belonging to commercial housing projects, new urban areas that have been allocated to developers but not implemented or implemented slowly compared to approved schedules, 20% land reserved for social housing in commercial housing projects, new urban areas but not yet utilized, to allocate to developers who wish to invest in low-income housing;c) Specify and publicly announce standards, target groups, and conditions for purchasing, leasing, or lease-purchasing low-income housing within their jurisdiction; organize management and monitoring of sales, rentals, and lease-purchases to minimize profiteering;
d) Specify mechanisms and incentives to encourage economic components to participate in the development of low-income housing within their jurisdiction; regulations on the management of the use and operation of low-income housing funds within their jurisdiction;e) Organize meetings, mid-term reviews, and annual assessments of the results of implementation, report to the Ministry of Construction for consolidation and reporting to the Prime Minister.
This Decision shall take effect from June 10, 2009.
d) Specific regulations on incentive mechanisms and preferential policies to attract economic sectors to participate in developing low-income housing within the administrative region; management rules for the use, exploitation, and operation of low-income housing funds within the administrative region;
d) To organize inspections, audits, supervision, and handling of violations related to the sale, rental, and lease-purchase of low-income housing within their locality according to their authority;
e) To organize mid-term and annual reviews of implementation results every six months and annually, and report to the Ministry of Construction for consolidation and reporting to the Prime Minister.
Article 11. This Decision takes effect from June 10, 2009.
Article 12. The Ministers, Heads of ministerial-level agencies, Heads of government agencies, Chairpersons of provincial People's Committees under the direct jurisdiction of the central government shall be responsible for implementing this Decision./.