Week 22/2024 – Central Vietnam Real Estate News Summary

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   1. Vietnam’s Booming Industrial Real Estate: A Leader In Market Growth.

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1. In recent years, Vietnam’s industrial real estate sector has consistently led the market, driven by government investment policies, improved infrastructure, and strategic positioning in the global supply chain. Stable politics, competitive labor costs, and tax incentives attract both domestic and foreign investors. The sector benefits from global supply chain shifts, especially from China, and robust infrastructure development.
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3. Industrial zones boast high occupancy rates and rising rental prices, particularly in key northern and southern provinces. Despite challenges like limited industrial land and labor shortages, the sector has significant growth potential, supported by expanding logistics, e-commerce, and favorable demographics. Further infrastructure investment and administrative reforms are essential.

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Source: batdongsan.com.vn

2. Vietnam’s Real Estate Market Shows Robust Growth In Q1 2024.

In the first quarter of 2024, Vietnam’s real estate market showed significant improvement, with an absorption rate of nearly 21%, up 4% from the previous quarter and nearly three times higher than the same period last year, according to the Vietnam Association of Realtors (Vars). New projects had a particularly high absorption rate of 51%.

The market is viewed as offering a unique investment opportunity in the first half of 2024, with experienced investors poised to secure high-value properties for long-term gains.

Ho Chi Minh City saw notable liquidity improvement, with a 13% increase in property transaction processing.

Additionally, property prices rose by 2-5%, and market satisfaction increased, indicating strong future growth expectations.

Source: cafef.vn

3. The Law On Land, Housing, And Real Estate Business May Take Effect From August 1.

The three revised Land, Housing and Real Estate Business laws are expected to take effect from August 1, instead of July as planned in the Government’s Resolution.

Currently, most localities and businesses hope that new laws with important impacts on the real estate market will soon be brought to life. Vice Chairman of Ho Chi Minh City Bui Xuan Cuong said that the revised Land Law had a great impact on the city’s socio-economic life. In the first months of 2024, the number of procedures related to real estate is more than 67,000, an increase of nearly 19,000 documents over the same period.

According to the assessment of the Ministry of Construction, the revised Real Estate Business Law has many new contents, which will tighten the situation of land division and sale in localities.

Source: vnexpress.net

4. The Real Estate Market Still Has To Clear Bottlenecks.

The real estate market in Ho Chi Minh City is currently facing a significant shortage of affordable housing and social housing (NOXH). Data indicates that from 2020 to early 2024, the city has not had any affordable commercial housing, primarily offering mid-range and high-end housing, with commercial housing making up over 70% of the total supply. This imbalance makes it difficult for low-income individuals to find suitable housing. Similarly, the supply of NOXH is also very limited, with only a few hundred units provided since 2020. This shortage of supply has led to high housing prices and fewer transactions.

In 2024, the Ho Chi Minh City real estate market will continue to face challenges with supply-demand imbalances. Legal issues are a major obstacle, accounting for 70% of the difficulties, causing many real estate projects to be unable to complete procedures or be halted. Legal adjustments, such as the Land Law 2024, the Housing Law 2023, and the Real Estate Business Law 2023, are needed to address these issues and support the development of at least one million NOXH units between 2021 and 2030. The market is expected to return to normal growth from 2025 as the new policies start to take effect.

Source: cafef.vn

5. Personal Income Tax Exemptions For Real Estate Transactions In Vietnam.

According to regulations, personal income tax (PIT) on income from real estate transactions is calculated as the transfer price multiplied by the tax rate of 2%. However, there are several cases where individuals are exempt from PIT when dealing with real estate transactions:

Transfer of agricultural land: Individuals earning income from the value of agricultural land use rights allocated by the State without land use fees or with reduced land use fees are exempt from PIT.

Land use rights allocated by the State: Income from the value of land use rights allocated by the State is not subject to PIT.

Sole property: According to Decree 65/2013/NĐ-CP, income from the transfer of residential houses, land use rights, and assets attached to residential land of individuals who own only one residential house or land use right in Vietnam, and have owned and used it for at least 183 days (6 months), is exempt from PIT.

Gifts and inheritance: The 2007 Law on Personal Income Tax exempts PIT for transfers through inheritance or gifts between spouses; biological parents and children; adoptive parents and adopted children; parents-in-law and children-in-law; grandparents and grandchildren; and siblings.

In summary, regardless of the type of PIT exemption, individuals generating income from real estate transactions must provide complete and accurate documentation to prove their eligibility when dealing with tax authorities.

Source: cafef.vn

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