Ho Chi Minh City property marketers expected a sharp hike in real estate prices next year, due to higher taxes and local authorities tightening up on regulations.
While the property market has been sluggish lately, Phuc Duc Real Estate Investment Corporation director Lam Van Chuc predicted HCMC house and land prices would rise next year “from 10 to 30 percent.”
A new tax on property sales would be likely to contribute to the predicted rise.
Personal Income Tax (PIT), effective from 2009, will impose 25 percent tax on profits from house and land sales.
Another reason for the projected rise, Chuc said, was the difficulty facing project investors because of the government tightening up on the presale of properties.
Investors could not raise project capital from presales because it was illegal before the foundation was completed.
The law which came into effect in 2006 was only recently being strictly enforced.
ACB Real Estate Joint Stock Company Vice CEO Vo Dinh Quoc said the local governments' new land prices would create a land and house price hike next year.
The state-set land values are used to calculate land taxes and compulsory land acquisitions.
The hikes would increase house prices and construction costs, he said.
HCMC Real Estate Association Deputy Chairman, Le Hoang Chau, said in light of the land value increases, land use fees should be reduced to make property developers more confident of their project's investment.
Deputy Minister of Construction Nguyen Tran Nam said the government was considering letting property investors pay land use fees in consignments.
Many property marketers blamed the higher taxes and strict regulations for the recent dull real estate market.
(Thanhniennews)
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