Personal income taxpayers are ineligible to purchase social housing in Vietnam in 2023? What are the rules for social housing lease, lease purchase or sale?
Who is eligible for incentive policies on social housing in Vietnam according to current regulations?
Currently, according to the provisions of Article 49 of the 2014 Law on Housing of Vietnam on entities eligible for incentive policies on social housing as follows:
Entities eligible for incentive policies on social housing
If the entities below satisfy requirements prescribed in Article 51 of this Law, they shall be eligible for incentive policies on social housing:
1. People with meritorious services to the Resolution prescribed in law on preferential treatment for people with meritorious services to the Resolution;
2. Households living in poverty or near poverty in rural areas;
3. Households that are often affected by natural disasters or climate changes in rural areas;
4. Individuals living in low income, poverty or near poverty in the urban areas;
5. Employees working in enterprises inside or outside the industrial zones;
6. Commissioned officers, professional and technical non-commissioned officers, standing army, and workers in the agencies of People’s Police and People’s Army;
7. Officials and civil servants prescribed in law on officials and civil servants;
8. Entities who have returned official residence as prescribed Clause 5 Article 81 of this Law;
9. Students of institutes, universities, colleges, vocational training institutions; students of the public ethnic boarding schools using social housing during their duration of study;
10. Households or individuals subject to land withdrawal and land clearance as prescribed without any compensation in form of housing or residential land paid by the State.
Thus, according to current regulations, there are currently 10 entities eligible for incentive policies on social housing in Vietnam, of which prominent groups are individuals living in low income, poverty or near poverty in the urban areas; households living in poverty or near poverty in rural areas; households that are often affected by natural disasters or climate changes in rural areas, etc.
Personal income taxpayers are ineligible to purchase social housing in Vietnam in 2023? What are the rules for social housing lease, lease purchase or sale?
Personal income taxpayers are ineligible to purchase social housing in Vietnam in 2023?
Currently, Article 51 of the 2014 Law on Housing of Vietnam stipulates the requirements for eligibility for incentive policies on social housing with the following contents:
Requirements for eligibility for incentive policies on social housing
1. The entities eligible for the policies as prescribed in Clause 1 Article 50 of this Law shall satisfy the requirements pertaining to housing, residence, and income as follow:
…
c) With respect to entities prescribed in Clause 4, 5, 6 and 7 Article 49 of this Law, they are required to be not subject to regular income tax as prescribed in law on personal income tax; with respect to households living in poverty and near poverty, they must be subject to the households living in poverty and near poverty as prescribed in regulations of the Prime Minister. With respect to entities prescribed in Clause 1, 8, 9 and 10 Article 49 of this Law, they are not required to satisfy requirements pertaining to income as prescribed in this Point.
Thus, currently, the entities eligible for incentive policies on social housing are required to be not subject to regular personal income tax as prescribed in law on personal income tax, including:
- Individuals living in low income, poverty or near poverty in the urban areas;
- Employees working in enterprises inside or outside the industrial zones;
- Commissioned officers, professional and technical non-commissioned officers, standing army, and workers in the agencies of People’s Police and People’s Army;
- Officials and civil servants prescribed in law on officials and civil servants;
However, at the 5th session, the XV National Assembly, according to the report of the draft Law on Housing (amended), the Minister of Construction said that the draft Law on Housing (amended) supplements the regulations on:
- The entities eligible for incentive policies on social housing; forms of implementation of incentive policies on social housing;
- Requirements for enjoying incentive policies on social housing; principles of implementing incentive policies on social housing;
- Form of social housing development;
- Type of house and standard of social housing area; land to build social housing...
In addition, a number of new regulations were added, such as State capital for housing development; form of capital mobilization for housing development.
In which, for the entities eligible for incentive policies on social housing proposed in the draft include:
- People with meritorious services to the revolution, relatives of martyrs;
- Poor and near-poor households;
- Low-income people in urban areas;
- Workers and employees working at enterprises in industrial zones;
- Cadres, civil servants and public employees in accordance with the law on cadres, civil servants, public employees...
Also at the meeting, the Law Committee said that there were some suggestions to amend the regulation in the direction that "workers and employees whose incomes are not subject to regular personal income tax are eligible for incentive policies on social housing".
This regulation aims to ensure fairness for low-income workers in general, regardless of whether they work inside or outside the industrial park.
On this issue, many National Assembly deputies expressed disagreement because, according to regulations, subjects with incomes who must pay income tax will not be entitled to the mechanism of buying social housing.
However, in reality, there are many cases where income is subject to income tax but it is still not economical enough to buy a house for many different objective reasons. Therefore, this regulation has eliminated a series of cases that need to be eligible for incentive policies on social housing.
What are the rules for social housing lease, lease purchase or sale according to current regulations?
Article 62 of the 2014 Law on Housing of Vietnam stipulates the rules for social housing lease, lease purchase or sale as follows:
- The social housing lease, lease purchase or sale must comply with regulations of this Law, each entity prescribed in Clause 1 Article 50 of the 2014 Law on Housing of Vietnam may not rent, rent and buy, or buy more than one social house concurrently; the students of public ethnic boarding schools shall be exempted from housing rents and service charges during their duration of study.
- The term of a social housing lease agreement is at least 05 years; the minimum term for lease purchase payment for social housing is 05 years from the date on which the lease purchase agreement is signed.
- The lessee under an agreement on social housing lease or lease purchase may not sell, sublet, or lend that house during the term of the agreement; if he/she no longer wishes to rent, or rent and buy that house, the agreement shall be terminated and that house shall be returned.
- The buyer under the agreement on social housing lease purchase or sale may not resell the house within at least 05 years, from the date on which the total amount is paid off, except for the management unit of that social housing or entities entitled to buy that social housing if the management unit does not buy the house at the selling price of the same social housing in the same location, at the same time. Income from this transaction is exempted from personal income tax.
- After 05 years from the date on which the total housing amount is paid off and the Certificate is granted, the buyer may resell their house according to market mechanism provided that they have paid land levies as prescribed in regulations of the Government and income tax as prescribed in law on taxation as required; if they resell to the entities entitled to buy social housing as prescribed of this Law, the maximum selling price must equal the selling price of the same social housing in the same location, the same selling time and that housing is exempted from personal income tax.
If the buyer or the lessee who is subject to the relocation may resell the house(s) according to market mechanism after they have paid off the total amount and have granted the Certificate provided that they have paid land levies as prescribed in regulations of the Government and income tax as prescribed in law on taxation as required.
- Any transactions in social housing lease, lease purchase, or sale do not comply with regulations of this Law, the agreement on housing lease, lease purchase, or sale shall be invalidated and the lessee or the buyer must return the house to the agency in charge of social housing; if they do not return the house, the People’s Committee of the province where the house is located shall enforce the withdrawal of that house.
The housing rents or prices shall comply with regulations of law on civil; the lease purchase prices of social housing shall comply with Article 135 of the 2014 Law on Housing of Vietnam.
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