Incentives for developers of apartment building renovation and reconstruction projects in case of grouping in Vietnam

Incentives for developers of apartment building renovation and reconstruction projects in case of grouping in Vietnam​ (Image from the Internet)

Incentives for developers of apartment building renovation and reconstruction projects in case of grouping in Vietnam

According to Clause 3, Article 3, Decree 98/2024/ND-CP, grouping apartment buildings for renovation and reconstruction refers to relocating owners and users from two or more independent apartment buildings within the same commune-level area, district-level area, or neighboring district-level areas to construct new apartment buildings at one or two locations with gathered apartment buildings, aimed at arranging resettlement for all owners and users subject to relocation.

Incentives for developers of apartment building renovation and reconstruction projects in case of grouping in Vietnam are stipulated in Article 39 of Decree 98/2024/ND-CP as follows:

(1) In cases where the location for reconstructing apartment buildings, after arranging resettlement for owners and users, still has an area for business ensuring a minimum profit margin of 10% and a maximum of 15% of the total project investment proposed by the investor according to Point b, Clause 1, Article 38, or determined by the housing management authority according to Point c, Clause 1, Article 38, Decree 98/2024/ND-CP, the investor will not be granted additional land from the remaining gathered apartment buildings; the selection of the investor to implement the project on these remaining land areas will be based on approved planning and project investment objectives following the laws on land, construction, and related laws in Vietnam.

(2) In cases where the location for reconstructing apartment buildings, after arranging resettlement for owners and users, has an area for business but does not meet the profit as per (1) or has no area for business, the investor of the renovation and reconstruction project will be granted additional land from one or some of the gathered apartment buildings for business according to the approved plan, ensuring profits as per (1).

For the remaining land area (if any) not granted to the investor as specified in this clause, based on the approved plan and project objectives, the provincial People's Committee will select the investor according to the laws on land, construction, and related laws to invest and construct as per the approved plan.

(3) The provincial People's Committee will allocate land, lease land, and exempt land compensation, land levy, and land rent for the area granted to the investor of the apartment building renovation and reconstruction project according to Points b and c, Clause 1, Article 38, Decree 98/2024/ND-CP.

(4) In cases where the project settlement yields profits exceeding the allowed profit margins as per (1), the investor must remit the excess profits to the state budget; if the excess profit arises from the adjustment of investment policy according to Article 14 of Decree 98/2024/ND-CP, the investor will only be required to pay taxes according to regulations on the excess profits.

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