MINISTRY OF EDUCATION AND TRAINING MINISTRY OF FINANCE
ACADEMY OF FINANCE
VUONG MINH PHUONG
FINALIZING THE FINANCIAL POLICIES FOR DEVELOPMENT OF HANOI REAL
ESTATE MARKET
Major: Finance - Banking Code: 62.34.02.01
ECONOMIC DOCTOR’S THESIS SUMMARY
HANOI - 2018
THE THESIS IS COMPLETED AT THE ACADEMY OF FINANCE
Scientific Advisors:
1. Asso.Prof.Dr. Ngo Tri Long 2. Asso.Prof.Dr. Pham Ngoc Anh
Review 1:
Review 2:
Review 3:
The thesis will be defensed at the Academy-Level Thesis Assessment Council at the Academy of Finance
At … 00’ date … moth … year 2018 The thesis can be searched at:
- National Library
- The Academy of Finance Library
LIST OF THE AUTHOR’S THESIS-RELATED WORKS
1. Vuong Minh Phuong (2017), "Personal Income Tax on Real Estate Transfer in Hanoi Real Estate Market", Finance and Accounting Journal, No. 1 (162) 2017, page 32. .
2. Vuong Minh Phuong (2017), "Establishing real estate investment trust fund - Issues", Financial Investigation Journal No. 175 + 176 (1 + 2 - 2017), page 78.
INTRODUCTION 1. Urgency of the thesis topic
Real estate market is one of the key input markets of the national economy.
Developing a healthy and well-resourced real estate market that is in line with the socio-economic model is a very important task in the current period, especially when Vietnam is in the process of international integration.
Hanoi capital is the political, economic and cultural center of our country.
Hanoi real estate market, in addition to the common points, has specific points compared with other provinces in the country. This is also one of the largest markets that have a strong impact on the real estate market. Although the Ha Noi real estate market has achieved certain achievements, there are still many limitations due to both objective and subjective reasons such as: incomplete legal documents, insufficient and unsynchronous market policies; weak organizational structure of the state management apparatus for the real estate market. In general, the real estate market is unstable, somtimes too hot, sometimes frozen, real estate investment is also spontaneous, following movement, causing supply-demand difference, real estate price is too high compared with people’s income ... One of fundamental causes of this situation is the limited system of financial policies the State has used to manage and develop Vietnam real estate market in general and Hanoi real estate market in particular, so far has revealed many unreasonable points: real estate related tax policies are not really a tool contributing to publicity, transparency and regulation of the market, limitation of speculation; incomplete system of banking institutions, lack of medium and long-term capital for the real estate market ...
Especially, it is necessary to limit the dependence of the real estate market on the bank capital. Bank loans are mainly mobilized from short-term funds for long-term loans. Thus, this source is unstable and highly risky in terms of policy. In order to create sustainable capital flows, more non-banking institutions such as investment funds, especially trust funds, insurance funds, retirement savings funds, real estate bonds should be developed. ... This is not a new problem, it was mentioned earlier but has encountered many obstacles. This mainly comes from the perception and anxiety of investors and domestic enterprises. At the same time, through the study of financial policies for real estate market, the author finds that the research has provided many scientific grounds to the state management agencies. However, studies on financial policies for Vietnam real estate maket in general and Hanoi real estate market in particular are still limited, including such major limitations as:
some of the theoretical issues are not clear and systematic; unable to provide
specific solutions for financial policies for real estate market. Thus, in response to the demands of the economic integration and development process, theoretical and practical renovation and refinement in finalization and use of financial policies for development of the real estate market is an indispensable trend now. The studies on the financial policies and their impacts on the real estate market are urgent to work out the necessary financial solutions to promote sustainable development of Hanoi real estate market, both in theory and practice. For the above reasons, the author has chosen the topic: "Finalizing financial policies for development of Hanoi real estate market" as the thesis topic.
2. Overview of projects related to the topic 2.1. Domestic studies:
The thesis mentions workshops, ministerial level topics, PhD theses, books and related articles with different perspectives.
So far in Vietnam, there have been many scientific conferences as well as scientific researches on this issue such as: the Workshop "Real estate market in Vietnam today" held by the National Economics University in cooperation with Vietnam Association of Real Estate (2014); The Workshop "Seeking capital for real estate market in 2016" organized by Lao Dong Newspaper in association with Vietnam Real Estate Association (2016); The Workshop "Real Estate Market Prospects in 2017 - Policy Impact" (2016) organized by Vietnam Real Estate Association in coordination with Investment Newspaper, Investors Magazine.
Presentations at the workshops focused on the causes and limitations of the market over years, causes and at the same time also set the development direction, proposed solutions to overcome limitations and develop the real estate market more healthily
The scientific research at the ministerial level: "Finalizing the financial collection policy mechanism for land in Vietnam" (1999), "Financial policies applied to exploitation of land resources and state real estate for purpose of national industrialization and modernization"(2003), chaired by the Asso.Dr. Pham Duc Phong, Director General of Public Asset Management under the Ministry of Finance. Associate Prof. Dr. Nguyen Van Thao is the topic leader with the topic
"Reality of ownership and solutions in our country today "(2005); The Ministry of Finance's Ministry-level scientific research project led by Dr. Ha Quy Tinh entitled
"Theory of land administration and its application to solve some land issues in Vietnam" (2005), "Policy on development of real estate market in Vietnam" (2011) by Dr. Dinh Van An ...
Recent thesises have continued to study issues related to real estate market such as state management over real estate market, real estate bubble phenomenon, market research indicators, financial products development for the real estate market of Vietnam as follows: The PhD student Nguyen Thi Dung, "Land use right in the real estate market in Vietnam - theoretical and practical issues" (2011); "The State management of real estate market in Ho Chi Minh City" (2011) by Nguyen Van Dien - PhD; Doctoral thesis "Residential real estate bubble" by Le Thanh Ngoc (Banking University of Ho Chi Minh City), (2014); "Study on building the real estate market index in Ho Chi Minh City" by Le Van Cu-PhD (Central Institute for Management Studies), (2015) ...
In addition to the general research on real estate market and real estate market management as mentioned above, there have been many researches on the financial aspects of the market, including financial policies: The PhD student Do Thanh Tung with the thesis "Housing financial policies in Hanoi urban area" (National Economics University 2010); the PhD thesis by Nguyen Ho Phi Ha with topic
"Mobilizing financial resources to develop the real estate market in Vietnam"
(Academy of Finance 2012); Le Hai's PhD thesis "Development of financial products for the real estate market of Vietnam" (Logistics Academy 2016); Dr. Le Van Binh's thesis: "Financial solutions for development of real estate market in Vietnam".
Some topics mention to the real estate tax policy such as Dr. Le Xuan Truong's PhD thesis on "Improving tax policy to improve the competitiveness of Vietnam industrial enterprises" (Academy of Finance 2006); Dr. Nguyen Dinh Chien's PhD thesis on "Improving Tax Policy on Assets in Vietnam" (Academy of Finance 2008); Thesis: "Tax Policy for Developing Vietnam Real Estate Market" by the PhD student Nguyen Thi My Linh (National Economics University, 2012); the PhD student Pham Van Binh with the topic "Housing and land tax policy in Vietnam" (National Economics University in 2013); PhD thesis of Nguyen Thuy Chung with theme: "Completing collection policy in Vietnam" (Academy of Finance 2009) ...
In addition to these areas of research, some of the scientists also work on minor issues of research, including issues related to capital mobilization, financial market development, policies related to the state budget ... The PhD student has also initially studied financial policy issues such as "personal income tax on real estate transfer in Hanoi real estate market" published in the Journal of Finance and Accounting, No. 1 (162) 2017, page 32; "Management, lease and transfer of state-
owned houses in Hanoi city" published on the Figures and Events Journal - the General Statistics Office, No. 11 in 2016, page 36; "Establishing a Real Estate Investment Trust - Issues", Journal of Financial Investigation No. 175 + 176 (1 + 2 - 2017), page 78.
2.2. Foreign studies
Concerning real estate market, a number of foreign authors have conducted in- depth studies on financial activities in the real estate market: the European Commission published "Housing finance systems for countries in transition - principles and examples" (2005) by Miller, NG and Sklarz, "Integrating real estate market into home price forecast system". Housing Research Review, (2012), 21: 2, pp. 183-213); Terry Boyd, "Real Estate Market Analysis - The Key to Looking Forward", (2014), Zhang, Ye Xin, Wang Jie, (2011), "Impacts of Real Estate Interest Policy, study impacts of China bank loans and housing price in the macroeconomic environment"
In addition, some books deal with issues related to real estate market, the relationship with real estate and macroeconomy, real estate finance policies (real estate tax, supply and demand, etc.), commercial real estate from investment angles:
Pirounakis, (2013), economic real estate, Routledge, Oxford, the UK; Geltner, Miler, Clayton, Eichhoitz, Commercial Real Estate Analysis and Investments, (2014); Roger Staiger (Author), Foundations of Real Estate Financial Modeling, (2009), MikeE.Miles (Author), Laurence M. Netherton (Author), Schmitz (Author) Adrienne, Real Estate Development, (2015).
Some books study housing finance policies, regulations, models, risk management on housing finance policies such as Edited Loic Chiquier and Michael Lea World Bank, Housing Finance Policy in Emerging Markets (2014); Eugenio Cerutti, Jihad Dagher, and Giovanni Dell'Aricc, Housing Finance and Real-Estate, (2015) ...
2.3. An overview of the published research.
In general, the researches of local and foreign scientists involved in the development of real estate market by financial policies have partly helped to improve the theoretical as well as practical system of Vietam’s real estate market.
These studies, in some aspects, have pointed out many realities, as well as causes of inefficient operation of real estate market with financial policies.
However, there are some limitations in these studies:
These researches focus mainly on the general knowledge of real estate, real estate market and some general overviews of operation aspects of the real estate
market, not yet come to a detailed analysis of financial policies or study on a certain angle such as real estate tax, housing finance policy, financial issues on real estate investment ...
The above authors have initially studied the financial solutions for development of the real estate market, but these studies are unsystematic, individual and incomplete, not taking consideration of their relations, or if any, they only mention a few goods on the real estate market and focus more into real estate business rather than macroscopic development of this market segment
+ Due to differences in economic and social-cultural development level, there are some differences in perception and evaluation of real estate, real estate market, financial policies ... between Vietnam and some developed countries in the world.
Thus, it can be seen that the research gap is that there is no topic or theses to study in a general, comprehensive and complete manner financial policies on Hanoi real estate market. This is a market with many unique characteristics, having a direct and strong influence on Vietnam real estate market, particularly, the study of financial policies in the context of great change of the real estate market, economic development in the context of integration, the laws and other guiding documents related to the real estate market: Construction Law 2014, Land Law 2013, Investment Law 2014, Real Estate Business Law 2014, Housing Law 2014... In addition, in our country, real estate market is part of socialist-oriented market economy, a unique feature in Vietnam. This market development policy system also has its own characteristics. In the long run, the real estate market will continue to grow with the improvement of market institutions. The introduction of solutions to improve financial policies to develop the real estate market well in Vietnam in general and in Hanoi in particular will facilitate attraction of investment and effective implementation of economic integration process. It also contributes to mobilization of great internal resources for socio-economic development of the capital and the country.
Through the researches related to financial policies for development of the real estate market in the country and abroad that the PhD student has accessed to, the author has drawn the scientists-resolved issues to be inherited and studied further, at the same time, confirmed that the thesis being studied does not overlap with previous researches on scope, space and time
3. Purpose and duties 3.1. Research purpose
Purpose and tasks of the thesis: Develop the theoretical framework and practical basis for finalizing the financial policies for development of Hanoi real estate market to 2025 and the following years.
3.2. Research duties
The thesis has three duties:
- Study and systematize basic theoretical issues on real state market finance policies
- Analyze and assess actual performance of the financial policies for development of Hanoi real estate market sofar, then assessing successes and causes - Based on the development orientation of the real estate market, the thesis proposes a system of solutions to improve the financial policies for development of Hanoi real estate market by 2025 and the following years.
4. Subjects and scope of research 4.1. Research subject
Since the topic on completion of financial policies is a very broad and complicated, the thesis only studies the State’s use of financial policies’ affect on Hanoi real estate market. The financial policy system is also diversified, affecting many different areas of the real estate market in particular and the economy in general. The thesis focuses on studying and proposing measures to improve the financial policies directly affecting Hanoi real estate market including:
- Financial policies in mobilizing and exploiting financial resources:
+ Real estate tax policy
+ Financial policy in land allocation
+ Financial policy in lease and transfer of real estate
- Financial policy in distribution and utilization of financial resources + Compensation for loss policy when the State recovers land
+ Preferential, support policy for development of real estate
+ Financial policy for non-bank financial institutions to support the development of the real estate market
- Real estate price policy.
4.2. Research scope
+ Space: Focus on financial policies for Hanoi real estate market.
+ Time: Mainly analyze the use and finalization of financial policies for the development of real estate in 1993 – 2017 period, focusing on 2003-2017 period (ie, after 2003 Land Law and Revised in 2013, Housing Law, Real Estate Business Law passed by the National Assembly and take effect), then propose solutions to
improve the financial policies for development of Hanoi real estate market by 2025 and the following years.
5. Research methodology
The thesis applies the theories and methodology of dialectical materialism, historical materialism, systematic approach, statistical method, comparative method, logical reasoning ... and other methods
The thesis uses secondary data source, mainly from reports and information through official sources of state management agencies (Ministry of Finance, Ministry of Construction, General Statistics Office, Ministry of Planning and Investment ...), scientific research works, books, textbooks, magazines, websites, reputable companies such as CBRE, Savil.
6. New contributions of the thesis
Based on in-depth study of theories as well as analysis of practical situation and proposed solutions, the thesis has the following contributions:
6.1. New contributions in terms of theory:
Theoretically: The thesis systematizes a number of theoretical issues on real estate and real state market, financial policies in general and financial policies for development of Hanoi real estate market in particulars; analyzes experience of some countries such as China, Singapore, Japan, Germany, USA ... on use of the financial policies for development of Hanoi real estate market, then the PhD student summarizes and draws lessons, experiences for Vietnam in general and Hanoi real estate market in particular. This will serve as a basis for analysis and practical assessment of the use of financial policies in Hanoi real estate market.
6.2. New contributions in terms of current situation analysis and assessment Practically: The thesis analyzes, details and completes the reality of Hanoi real estate market, impacts of the financial policies on this market from 1993 to present and evaluates the achievements, limitations and limited cause. Hence, the thesis proposes and recommends specific orientations and solutions to perfect the the financial policies for development of Hanoi real estate market, to develop it healthily and symmentrically with its inherent position in current integrated market econoomy
6.3. New contributions in terms of proposed solution
Based on the viewpoints and orientation for the development of Hanoi real estate market, the orientation of finalizing the financial policies in the coming time, combined with the forecasts on market development in the future, the thesis proposes a solution system which consists of 4 groups: financial policy finalization
solutions in the mobilization and exploitation of financial resources; financial policy finalization solutions in distribution, utilization of financial resources; real estate price policy solutions and Hanoi real estate market development support solutions in the current situation. These solutions are built on the basis of analyzing impacts of existing financial policies on the real estate market, the shortcomings to be solved and in line with the Party's and State's goals and views on developing the real estate market in Hanoi in particular and Vietnam in general until 2025 and the following years.
+ In addition to financial policy finalization solutions, the thesis also offers solutions to support the development of Hanoi real estate market
7. Structure of the thesis
Apart from the introduction, conclusion, list of references, appendix, the thesis is structured into 3 chapters:
Chapter 1: Rationale on financial policies for development of the real estate market.
Chapter 2: Reality of the financial policies for development of Hanoi real estate market
Chapter 3: Solutions to finalize financial policies for development of Hanoi real estate market
In particulars:
Chapter I: Rationale on financial policies for development of the real estate market.
In Chapter I, the thesis studies the following contents:
1. Basic issues of the real estate market
The thesis has researched and systematized basic theoretical issues on real estate and real estate market such as concept, characteristic, classification, price, supply and demand relation on real estate, real estate market and other real estate related revenues, real estate price policy. At the same time, the thesis also examines effects of these policies on the real estate market.
2. Financial policies for development of the real estate market
Financial policies play a very important role in the recovery and development of the real estate market in general and in Vietnam in particular. These policies express views, directions, and interventions of the State in use of financial categories for real estate market. Through financial policies, the real estate market is maintained stable and smooth. The thesis provides a general concept of the financial policies for development of Hanoi real estate market:
Financial policies for development of Hanoi real estate market are overall objectives and solutions in mobilizing, exploiting, distributing and using financial resources to develop the real estate market healthily, transparently and effectively in order to achieve the socio-economic objectives set in a certain period.
* Objectives of the financial policies for development of Hanoi real estate market:
+ Stabilize price on the real estate market
+ The real estate market develops well, grows stably
+ Develop a healthy, transparent and sustainable real estate market + Step by step raise social life quality
The thesis focuses on basic analysis of the State’s financial policies on the real estate market such as financial policy in mobilization and exploitation of financial resources (property tax policy, financial policy in land allocation process, financial policy in the lease and transfer of real estate); Financial policy in the distribution and use of financial resources (compensation for loss policy when the State recovers land, preferential policy for development of property and financial policy for non- banking financial institutions); real estate price policy. At the same time, the thesis also examines the role, target, objectiveand impact of these policies on the real estate market.
3. Experience of some countries in use of financial policies to develop the real estate market
Through studies on experiences from some countries in the world such as China, Korea, Singapore, Japan, Germany and the United States on financial policies for development of real estate market, the thesis draws some lessons as good reference for Vietnam and Hanoi city
Chapter 2: Reality of the financial policies for development of Hanoi real estate market
1. Overview of the formation and development of Hanoi real estate market
The establishment and development process of Hanoi real estate market is closely connected to the legal foundation and legal document system related to development policies in which the financial policy is one of important policies that has direct impact on the real estate market. The thesis analyzes the development phases of Hanoi real estate market. It can be seen that besides which have been achieved, there are many inadequacies, such as: irregular increase, decrease of commodity price, speculation, corruption ...
2. Reality of the financial policies for development of Hanoi real estate market
The thesis analyzes and identifies the current state of the financial policies in terms of: financial policy in mobilization and exploitation of financial resources (property tax policy, financial policy in land allocation process, financial policy in the lease and transfer of real estate); Financial policy in the distribution and use of financial resources (compensation for loss policy when the State recovers land, preferential policy for development of property and financial policy for non- banking financial institutions); real estate price policy
3. Assessing impacts of financial policies on Hanoi real estate market sofar
The thesis analyzes and evaluates the positive impacts of financial policies on the increase of supply and demand and facilitating the State to manage, control and promote the development of Hanoi real estate market.
- Positive effects
* Positive impact on the increase of supply in Hanoi real estate market
- Taxes in the field of real estate have contributed to encouraging organizations, households and individuals to complete paperwork, certificate of land use right, ownership of house and land based property for organizations, households and individuals in Hanoi city to form official transactions in the market.
- Real estate taxes contributes to making real estate transactions on Hanoi real estate market more transparent, creating fairness of obligations between real estate investment income and other sectors and restricting underground transactions, promoting the official market more strongly, increasing state budget revenue.
- Real estate taxes have mobilized a portion of the land user's income into the state budget, ensuring a stable source of revenue for the city's budget. Actual statistics show that real estate related revenue is increasing.
- Financial policies are completed in a way that encourages the stakeholders to take part in investment to increase supply for the real estate market, contributing to stabilizing the market, step by step facilitating foreign investors to enter the market in the direction of equality and in the same playground with domestic investors.
- Regarding social housing development policy, the support mechanisms have increased considerably. New regulations also expand subjects of social houses, narrow down house buying and seliing conditions, criteria; In the area of social housing development, 20% of land fund is spent for commercial houses, sold at
commercial house prices to cover the construction cost of social houses; allowing localities to support infrastructure within the project ...
- The policy of compensation for land acquisition and resettlement support has positive impacts on redistribution of land funds and promoting more active real estate market.
- From overcoming the commodity demand-supply difference in the real estate market, actively stabilizing market and restructuring the real estate market, diversifying real estate products, especially housing to meet the market demand, contributing to promoting economic development and ensuring social security. The State actively regulates the supply of real estate through development planning, urban planning, especially land supply source for the primary real estate market through allocation of land, lease of land, change of land use purpose.
At present, new financial institutions to develop financial instruments for real estate market such as Housing Savings Fund, Real Estate Investment Fund, Housing Reinvestment Agency ... to create medium and long-term capital for real estate market will be finalized soon. These are also factors that are expected to create a momentum for the real estate market to move positively.
* Positive impact on increase of demand in Hanoi real estate market
Hanoi real estate market under impacts of financial policies has been positively and stablely evolving. New policy systems such as: Land Law 2013;
Housing Law; Real Estate Business Law... and financial policies have taken effect practically and step by step come into life.
- The revised Housing Law and the Real Estate Business Law, effective from July 1, 2015, with regulations then loosenig house ownership conditions in Vietnam for foreigners, have contributed to boosting the real estate market.
- In fact, the Government’s financial solutions that remove difficulties for the real estate market in the past time are correct such as: allowing transfer of social houses, actively remove congestion points of social housing market in general and the real estate market in particular by continuing to review and finalize the master plan and having plan to actively handle abandoned and difficult to recover projects that greatly affect the socio- economic development.
- Financial policy on the formation and development of capital supply and market stabilization channels is an important factor promoting the real estate business connection between producers, constructors and transferors of land use right. This policy supports exploitation of resources inside and outside the country to invest in real estate and make the real estate market more exciting.
- Financial policies have partially improved real estate price by reducing intermediaries, saving business costs and protecting interests of real estate buyers to maintain this market incentives .
- Deploying real estate stock is a capital raising form for the real estate market and suitable to investors in the current lack of capital condition of our country. This method has partly attracted a large amount of capital in population in real estate in a professional manner and at the same time created a legal corridor to attract indirect investment funds rather than just attracted most investment directly into the real estate market as present, creating real estate development capital, not completely dependent on banks as the majority of investors in our country today.
* Positive fiscal policies enables the State to manage, control and promote Hanoi real estate healthily
- The collection policy on real estate has been adequately regulated, creating a general legal corridor for the State to manage real estate, encourage exploitation and use of land and real estate resources effectively, contributing to limit waste of land, encouraging healthy development of the real estate market, contributing to institutionalization of the Party and the State’s policies into life.
- Contribute to mobilizing reasonable revenue from real estate for the state budget, reinvesting socio-economic development, investing in infrastructure construction for the development of real estate; Improve land use efficiency and effectively exploit potential resources from land and real estate; Encourage healthy real estate development, orienting and regulating real estate development in line with socio-economic development objectives
- Basically, policies on collection of land use fees, land rental and water surface rental are in line with the market mechanism; have mobilized important financial resources for the state budget to serve socio-economic development;
contributing to improving the legal system on land finance management and putting the land law 2013 into real life. In particular, the land finance policy has been unified with domestic investment and foreign investment policy; interests between the state and investors are dealt with harmoniously; stabilize land costs for enterprises. Through the market mechanism-based auction of land use right, the negative situation in allocation of land, land lease has gradually been limited;
maintainig publicity and transparency. At the same time, the policy on exemption or reduction of land use levies, land rental and water surface rental have shown the State's incentive policies to land users who need to be given preferential treatment
or investment encouragement in accordance with the law on investment and the socialization policy
- The land use fee collection policy has been gradually improved accoding to the market mechanism conerning land relations, gradually eliminated the “ask-give"
mechanism of land through the "one land price" mechanism and become a tool to for the state to exercise its role as the owner of land. On the other hand, with the collection of land use fees, the State has created favorable conditions for land relations to be mobilized such as: the land holder has 5 rights, including right to transfer land use right, land use right becomes goods and in fact, land use right market for land is increasingly developing, contributing to formation and development of the real estate market
- Taxes have a positive impact on promoting official transactions on the real estate market, which help the state control activities of the real estate market, promote healthy development of the real estate market, and at the same time ensure equality in transactions and use of real estate, increase revenue to the state budget.
- The real estate taxes in real estate have enabled the state to understand use and transfer of real estate in the economy and perform its inspection and control function over the real estate market. Thanks to the implementation and strict management of agricultural land tax, house and land tax, transfer of land use right and registration fee, the tax authorities have helped the Government and people’s commitees at all levels to grasp quite well the State land fund in Hanoi being used by organizations, households and individuals, as well as the land use right transfer situation. This has helped the State, directly as Hanoi People's Committee to detect wrongdoings, violation of law by organizations and individuals in use and transfer of land, or to find out practical difficulties for timely settlement
- The policy of collecting sales of state-owned houses to the current tenants has created conditions for a number of people (mainly cadres and civil servants) to own and improve their houses, thereby reducing the maintenance burden from the state budget and contributing to urban renewal.
- The city’s compensation for ground clearance has achieved positive results while facilitating reasonable and effective management of land and projects. This achievement is due to the city's attention on directing and prioritizing capital for site clearance compensation.
- The city authorities, in addition to the implementation of Land Laws 2013, the Decrees guiding implementation, based on the actual situation in the locality to promulgate legal documents, make the compensation, support and resettlement
more reasonable and effective. For example: Decision 143 / QD-UB amending and supplementing some issues on compensation, Decision No. 03/2013 / QD-UB of the People's Committee of Hanoi city ... Since satisfactory application of compensation, support and resettlement policy, the land recovery is done normally, although there are still complaints, but this is limited and does not cause significant obstacles in the implementation process.
- Regarding the land price policy:
+ Simplifying the determination of land price for land rent calculation by Decree No. 46/2014/ND-CP stipulating the application of land price adjustment coefficients to determine the land rental. rates. The regulation on land price determining method according to the land price adjustment coefficient has brought about high efficiency in the implementation process. In reality, most of the localities use land price adjustment coefficients: k1, k2, ... to determine the land price when calculating financial obligations on land rental. This coefficient is adjusted to compensate for the added benefit of planning factors that have high or low land use coefficient (including land use density and construction height). The application of land price adjustment coefficient has shown that it has contributed to the reform of administrative procedures, reducing material costs, reducing pressure on state agencies and implementing publicity, transparency, equality, reasonableness with less wonder, avoided randomness in fixed land price to determine the land financial obligations in general and land rental unit in particular.
- The determination of land price has changed much and clear in three categories of the land price frame promulgated by the Government every five years, it is adjusted when there is fluctuation up or down by 20%; The land price list promulgated by the provincial People's Committee only applies to a number of cases involving the collection of land use levies, calculation of land use levies, calculation of fees and charges, payment of fines for administrative violations. The specific land price is used for calculating land rental, compensation for land recovery and the land use right value when equitizing state-owned enterprises.
Thus, for cases where the land is leased by the State and the land is recovered by the State, the determination of land price shall be carried out close to the market price, thus reducing negativeness in the price determination, increasing the State budget.
- The regulation that land use organizations, households and individuals reserve right to select annual land rental payment form or lease land with lump-sum rental for the whole lease term as foreign organizations and individuals has narrowed the inequality between domestic and foreign land users and at the same
time contributed to perfecting Vietnam mechanism and policie in line with the general trend of the world.
- Regarding real estate transfer price: generally, it can be seen that in the calculation of index, Savills has a fixed basket of projects and it is updated regularly. The liquidity ratio is quite sensitive to market fluctuations and therefore this ratio can be used as an evaluation tool to manage the market effectively and healthily
- Limitations and causes
Through the analysis of practical issues, the thesis has shown limitations, causes of the financial policies in Hanoi real estate market.
+ Financial policies in mobilizing and exploiting financial resources (real estate tax policy, financial policy in land allocation process, financial policy in lease and transfer of real estate).
+ Financial policies in the distribution and use of financial resources (compensation for damage caused by the State's recovery of land, preference, support for development of real estate and financial institutions for non-banking finance).
+ Real estate price policy.
- Causes of limitations
* Legal factors
First, the legal system regulating real estate market, from real estate construction investment, transaction to real estate management is slowly completed and overlapping.
Second, the real estate development policy is not suitable, the role of the State in controlling and regulating the real estate market through the primary market of land use right is not effective. The land financial policy is unclear.
Third, the financial system of real estate is less synchronous.
Fourth, the inspection, examination and handling of violations in the field of real estate, land use management, real estate transactions have not been regular, continuous. Administrative procedures related to real estate market such as investment, land allocation procedures, construction, issuance of certificates of house ownership and land use right are complex and prolonged, affecting the real estate market.
Fifth, the regulations relating to real estate, financial policies for real estate are in different legal documents such as Land Law, Construction Law, Housing Law, Real Estate Business Law, Business Law. Therefore, policies on development of the
real estate market, including financial policies are not only dispersed but also unsynchronous, many important policies have not been fully researched for promulgation.
* The real estate market factor
First, the city has not yet taken any specific measures to regulate the housing market in order to ensure balanced development of the real estate market, so there is still an unbalance between types of real estate
Second, most of investors focus on high-margin products and do not pay attention to niche products, especially those with low income.
Third, other supporting markets, such as capital market, construction materials market, construction market, labor market are not synchronous and not compatible with the real estate market, so they can not support to develop the real estate market stably
Fourth, the information and forecast system on the real estate market is unreliable, causing difficulties to the state management, as well as ensure the transparency and publicity of the real estate market
Chapter 3: Solutions to finalize the financial policies for development of Hanoi real estate market
1. Forecasting and development orientation of Hanoireal estate market by 2025 and the following years
Based on these perceptions of research, combined with the actual situation of Hanoi real estate market and development orientation of Hanoireal estate market in the coming time in combination with future forecast, the thesis has given forecast of development trend together with the viewpoint on finalizing the financial policies for development of Hanoi real estate market.
2. Solutions to finalize the financial policies for development of Hanoi real estate market by 2025 and the following years
The thesis proposes a solution system consisting of four groups: solutions to finalize financial policies in mobilizing and exploiting financial resources; solutions to finalize financial policies in distribution, utilization of financial resources, solutions on real estate price policy and solutions to support development of Hanoi real estate market in the current situation. These solutions are built on the basis of analyzing impacts of the existing financial policies on the real estate market, the shortcomings that need to be overcome, objectives and views of the Party and the State on development of the real estate market in Hanoi in particular and Vietnam in general until 2025 and the following years.
* Solutions to finalize financial policies in distribution, utilization of financial resources: including solutions on real estate tax policy (agricultural land use tax policy, non-agricultural land use tax policy, income tax on real estate transfer policy, finalization of registration fees into property registration law, study and promulgation of house tax law, finalization of financial policies on land allocation; finalization of financial policies on lease and transfer of real estate).
* Solutions to finalize financial policies in the distribution and use of financial resources: including compensation for loss financial policy when the State recovers land; preferential financial policy; non-banking financial institutions for development of Hanoi real estate market.
* Solutions on real estate price policy: land price and real estate transfer price.
* Support solutions set in current conditions.
- Perfect the legal documents system to facilitate effective operation and development of Hanoi real estate market
- Solutions on open mechanisms and policies to create goods and promote the development of Hanoi real estate market
- Solutions to improve the investment capital for real estate projects.
- Solutions to improve the apparatus and strengthen capacity of managers of Hanoi real estate market
- Solutions to complete the information system for Hanoi real estate market - Solutions to strengthen other services to support Hanoi real estate market.
* Solution execution conditions
The thesis also outlines three prerequisites for successful implementation of financial policy solutions, creating a favorable environment for the promotion of Hanoi real estate market in particular and Vietnam real estate in general.
- Complete the cadastral filing, remove problems, - Complete the issuance of land use right certificates
- Strengthen the inspection, examination and settlement of disputes on the real estate market.
With the basic contents mentioned aboce, the author hopes to contribute partially in finalizing the financial solutions for development of Hanoi real estate market from now to 2025 and the following years.
