Corporate bond debt of real estate enterprises reaches nearly VND 350,880 billion
The Ministry of Finance has just reported to the National Assembly’s Economic Committee on the implementation of policies and laws on managing the real estate market and developing social housing from 2015 to the end of 2023.
Accordingly, in the period of 2015 – 2023, there were 330 real estate enterprises issuing corporate bonds privately in the domestic market with a total issuance value of more than VND 726,335 billion, with an average issuance term of 3.69 years and an average interest rate of 10.15%/year. The outstanding corporate bond debt of real estate enterprises as of March 2024 was VND 350,876 billion.
In addition, in the period of 2015 – 2023, there were 4 real estate enterprises that issued corporate bonds privately to the international market with a total volume of USD 2.18 billion.
According to current regulations, the system of tax, fee and charge policies for real estate in the past time has basically covered all revenue related to real estate arising in the three stages.
This includes the establishment of ownership and use rights of real estate; use and exploitation of real estate and transparent and sustainable real estate market transfer, creating a stable source of income for the state budget.
Specifically, revenue from personal income tax from real estate transfer activities from 2017 to 2023 increased over the years. In 2018, it increased by 19.82%, in 2019 by 11.44%, in 2020 by 12.22%, in 2021 by 30.4% and the highest in 2022 with an increase of 64.34% compared to 2021. In 2023, anti-tax evasion from real estate transfer activities is still being focused on by localities, however, due to the difficult situation of the real estate market, purchasing power and liquidity decreased sharply, lack of money; lack of housing supply along with unreasonable housing product structure… has led to a decrease in the number of transactions in the market.
Also in this period, the Ministry of Finance inspected 19 units operating in the field of real estate business. The amount of money that the inspecting agency recommended for financial handling is mainly related to land use money, under-declaration of value-added tax, corporate income tax, personal income tax, and incorrect tax rates…
In the list of 13 enterprises operating in the field of real estate business with a recommendation of VND 1,182.8 billion; including a recommendation to contribute to the state budget of VND 255.7 billion and other financial settlements of VND 999.8 billion. These enterprises include: Hanoi Housing Development and Investment Corporation (Handico), Kosy Joint Stock Company, Corporation 319 BQP, Viglacera Corporation, Song Da Corporation, Hanoi Housing Investment and Development Corporation, UDIC Infrastructure Development and Investment Corporation, Hanoi Construction Corporation (Hancorp), Housing and Urban Development Corporation (HUD) owed more than VND 8.2 billion, IDICO Corporation – JSC, Industrial Zone Infrastructure Development Corporation, Becamex Binh Duong Joint Stock Company…
By December 31, 2023, 13 enterprises operating in the field of real estate business that were inspected had basically complied with the recommendations and contributed to the state budget. Only a few enterprises have not completed it due to difficulties in determining the value of land use money, allocating technical infrastructure costs, transferring assets… leading to slow settlement, slow implementation of related financial obligations.
In addition, the competent authority also recommended for 6 enterprises operating in the field of real estate business inspected in the field of administrative inspection; including notable names such as: Trainco Binh Dinh Co., Ltd., Construction and Construction No. 578 Joint Stock Company, Petroleum Real Estate Joint Stock Company… The total amount of tax recommended to be collected in the state budget is VND 237.4 billion (mainly in the declaration and under-payment of taxes such as: value added tax, corporate income tax, personal income tax, incorrect tax rates…
The Ministry of Finance also said that, as of December 31, 2023, the units and enterprises operating in the field of real estate business that were inspected have basically complied with the recommendations (contributing to the budget over VND 236 billion).
Creating a legal framework for real estate business activities, enhancing market management efficiency
Managing and monitoring the activities of real estate enterprises
Regarding the implementation of social housing development, the Ministry of Finance said that the revenue from land use money and land rent is kept entirely for the local budget. Currently, the medium-term public investment plan for the period of 2021-2025 has been approved by the Government for ministries, sectors and localities. According to the Law on Public Investment, the Ministry of Planning and Investment is the agency in charge of formulating investment plans and synthesizing, submitting to the competent authority for approval of medium-term and annual public investment plans for ministries, central agencies and localities; Therefore, to arrange capital for social housing construction and implement social housing policies in general, the Ministry of Finance only coordinates and gives opinions to units when requested.
In the past time, there has been no document from the Ministry of Construction requesting coordination in directing, monitoring and guiding the determination of rental prices, rental purchase prices, and sale prices of social housing, and managing the price of social housing management and operation services.
The Ministry of Planning and Investment does not arrange funds to compensate for interest rate differences for credit institutions designated by the State; therefore, these credit institutions have not yet deployed lending programs according to Decree No. 100/2015/ND-CP on developing and managing social housing with many regulations on developing social housing; preferential loans for implementing social housing policies; management and use of social housing.
The Ministry of Finance said that in order for real estate enterprises to be able to absorb new sources of capital, the problems of the market must be thoroughly solved. Besides, in addition to familiar financial sources such as bank credit and corporate bonds, it is necessary to have mechanisms and policies to develop, attract and ensure the effective operation of capital sources from other financial products (real estate investment funds, housing savings funds, securitization of real estate…), or other channels (direct and indirect foreign investment). At the same time, besides protecting individual investors in the risky financial market, the management agency needs to have policies to protect legitimate real estate businesses.
The Ministry of Finance also proposed to continue synthesizing difficulties and obstacles in the implementation of related policies and laws, including the Land Law, Housing Law, and Real Estate Business Law, and finding solutions to create a legal framework for real estate business activities and improve market management efficiency.
At the same time, in order to tightly manage and monitor the activities of real estate enterprises, ensure financial capacity suitable for implementing licensed projects to reduce risks in the field of real estate business, it is necessary to study and supplement regulations when establishing a real estate enterprise or granting construction permits and investing in real estate projects to ensure that enterprises have sufficient financial capacity to implement the project.
In addition, the Ministry of Construction should strengthen the management of the real estate market to develop in a stable, sustainable and transparent manner; closely monitor the granting of construction permits, sales licenses for projects, and transactions of real estate exchanges, anti-money laundering in the field of real estate…
