Is the Investor in the Trade Union Facility Project Allowed to Allocate 20% of the Total Floor Area of the Social Housing Project for Commercial Business?
Is it permissible to use the homestead land area that has been invested in building technical infrastructure within the scope of a social housing construction project to invest in commercial housing construction?
According to Clause 1, Article 9 of Decree 100/2015/ND-CP (amended by Point a, Clause 8, Article 1 of Decree 49/2021/ND-CP) on mechanisms for supporting and preferring investors in social housing construction, it is stated as follows:
Mechanisms for supporting and preferring investors in social housing construction
1. Investors in social housing construction projects not using public investment capital or state capital outside public investment are exempt from land levy and land rent as stipulated in Point a, Clause 1, Article 58 of the Housing Law. Specifically:
a) Exemption from land levy and land rent for the land area allocated or leased by the State, including land fund for commercial business construction, approved by competent authorities within the scope of social housing construction projects.
The provincial People's Committee shall consider and decide on the refund or deduction from the investor's financial obligations to the State, including compensation and site clearance costs (if any), in cases where the investor has paid the land levy when the State allocated land or acquired land use rights from other organizations, households, or individuals for social housing construction or the investor has paid the land levy for the 20% land fund;
b) Reserve 20% of the total homestead land area that has been invested in technical infrastructure within the scope of the social housing construction project (including projects using the 20% land fund) to invest in commercial housing construction to offset investment costs, contributing to reducing the sale price, rental price, and rent-purchase price of social housing, as well as reducing the management and operation service costs of social housing after investment.
In Official Dispatch 4550/BXD-QLN in 2022, the Ministry of Construction provides guidance as follows:
According to housing law, investors in social housing construction projects are allowed to reserve 20% of the total homestead land area that has been invested in technical infrastructure within the scope of the social housing construction project (including projects using the 20% land fund) to invest in commercial housing construction as specified in Point a, Clause 8, Article 1 of Decree 49/2021/ND-CP. The Project Management Board of the Trade Union Facilities has proposed reserving 6,464/32,897m2 (about 19.6%) of the homestead land for social housing to construct adjacent housing.
Is it permissible for investors in the Trade Union Facilities project to reserve 20% of the total housing floor area of the social housing project for commercial business? (Image from the Internet)
Is it permissible for investors in the Trade Union Facilities project to reserve 20% of the total housing floor area of the social housing project for sale?
In Official Dispatch 4550/BXD-QLN in 2022, the Ministry of Construction provides guidance on this issue as follows:
According to Point c, Clause 1, Article 9 of Decree 100/2015/ND-CP dated October 20, 2015, of the Government of Vietnam, if the detailed planning scheme of the project approved by a competent state agency does not provide a separate land fund for commercial business construction within the project's scope, the investor is allowed to reserve 20% of the total housing floor area of that project for sale, lease, or lease purchase at commercial prices.
However, in Point a, Clause 8, Article 1 of Decree 49/2021/ND-CP dated April 1, 2021, amending and supplementing some articles of Decree 100/2015/ND-CP, it only stipulates that the investor is allowed to reserve 20% of the homestead land area (the provision for reserving 20% of the floor area is no longer included) to invest in commercial housing construction.
What are the responsibilities of the provincial People's Committees regarding the Trade Union Facilities project?
In Official Dispatch 4550/BXD-QLN in 2022, the Ministry of Construction provides guidance on this issue as follows:
According to Point c, Clause 1, Article 1 of Decision 1729/QD-TTg in 2020 (amending and supplementing Decision 655/QD-TTg in 2017), it is stipulated as follows:
Provincial People's Committees:
- Coordinate with the Vietnam General Confederation of Labor to develop planning, plans, and allocate funds from locally managed budgets and attract investment from enterprises of various economic sectors to build housing areas for workers to purchase, rent, and lease purchase in industrial zones and export processing zones with complete technical infrastructure, including:
+ Transport systems, power and water supply and drainage systems, green areas, and social infrastructure works, including cultural and sports facilities, kindergartens, schools, commercial services, parks...along with trade union facilities of the Vietnam General Confederation of Labor to improve workers' material and spiritual life.
- Allocate land funds, funds from locally managed budgets, and carry out site clearance at the planned land site for trade union facilities agreed upon by the Vietnam General Confederation of Labor to implement the investment in trade union facilities according to this Decision.
- Allocate land, lease land to land users, including allocating land to the Project Management Board of Trade Union Facilities under the Vietnam General Confederation of Labor to invest in construction projects of technical and social infrastructure belonging to the trade union facility planning;
- Allocate land to enterprises under the Vietnam General Confederation of Labor and other enterprises to invest in housing projects for sale, rent, and lease purchase within the trade union facility planning area in accordance with laws on land, housing, investment, and other relevant laws.
At the same time, according to Point d, Clause 1, Article 1 of Decision 1729/QD-TTg in 2020 (amending and supplementing Decision 655/QD-TTg in 2017), it is stipulated as follows:
Vietnam General Confederation of Labor
- After being introduced and approved by the provincial People's Committees on the location for the trade union facility planning area, the Vietnam General Confederation of Labor shall be responsible for:
+ Organizing surveys and preparing detailed 1/500 scale planning of trade union facilities for the entire land area introduced and approved by the local authorities using the funds of the trade union organization.
+ Investing in certain projects or the entire trade union facility project using the trade union organization's funds, state budget support, loans, and other legitimate mobilized capital as follows:
++ Acting as the investor in building technical infrastructure (if any) and cultural and sports facilities within the trade union facility planning from the trade union organization's funds and state budget support, complying with legal regulations.
++ Enterprises with the function and capacity according to legal regulations under the Vietnam General Confederation of Labor act as investors in constructing housing for sale, rent, and lease purchase within the trade union facility planning according to Point d, Clause 2, Article 57 of the Housing Law, organizing investments in accordance with social housing regulations, including workers, trade union members, and laborers in industrial zones and export processing zones.
- Collaborating with provincial People's Committees during the planning of trade union facilities, with contents: attracting investors to maximize private investment in building housing for workers; criteria for selecting subjects eligible to purchase, rent, and lease purchase housing in worker housing projects; sales, rent, and lease purchase prices in worker housing projects; management of trade union facilities post-investment according to legal regulations.
See detailed content at: Official Dispatch 4550/BXD-QLN in 2022
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