Just calculate correctly
Speaking at the seminar “Land valuation: Correct and sufficient”, Ms. Dang Thi Kim Oanh, General Director of Kim Oanh Group, said that the company won the auction of land use rights for more than 23 hectares of an approved project. zoning. After that, the State planned some infrastructure to go through the project, forcing businesses to adjust the project planning.
However, the authorities said that the residential land area of the project under the old planning when converted to the new planning but is of a different type of land will not be deducted. Meanwhile, other types of land under the old planning that are converted to residential land under the new planning must pay additional fees.
Faced with the risk of heavy losses when calculating the land price according to the plan that cannot be deducted and must pay additional money, Ms. Oanh said that it is possible to record the actual expenses that the enterprise has spent, one is to calculate according to the enterprise’s expenses. spent, secondly, calculate it to suit the business. Only then will the enterprise dare to boldly carry out the project.
Land use fees make up a significant part of the input price list to build real estate costs.
Similarly, Mr. Tran Quoc Dung, Deputy General Director of Hung Thinh Group, said that land use fees make up a significant part of the input price list to build real estate costs. Therefore, the draft Decree guiding the implementation of the 2024 Land Law charges too high a land fee while the costs of businesses are not fully accounted for, which will lead to project development costs being inflated, which means pushing house prices increase. In the end, the loss will belong to the buyer, which in the long run is not beneficial to the market and social security.
In fact, after a project is priced, on average the project takes 3-4 years to implement construction, not to mention large projects that have implementation time of up to decades, so problems arise. Price inflation and reserve fees are inevitable.
Mr. Dung gives an example, the investment capital for construction of projects from 20 to 24 floors without basement, in 2020 according to regulations of the Ministry of Construction is 11,373 million VND/m2, in 2021 it will increase by 106%, to 12,438 million VND/m2. . By 2022, it will increase by 102%, to 12,733 million VND/m2. Thus, in fact, the Ministry of Construction’s capital rate statistics over the years have had price slippage, with an average increase of about 4-5%/year.
“There is no reason not to allow businesses to include price inflation costs in the process of calculating land use fees for projects. Therefore, it is necessary to supplement the cost of labor and material inflation during the construction process, contingency costs and other reasonable and valid costs according to tax and construction laws,” Mr. Dung said.
Mr. Le Huu Nghia, General Director of Le Thanh Company, said that currently, many projects are stuck because there is no consulting unit to appraise land prices. When the Real Estate Business Law, Land Law, and Housing Law take effect, how will previous projects be handled? Regulations include calculating land use fees at the time of land allocation decision. So how will the decision to allocate land spanning from 2013 – 2023 be resolved?