Ho Chi Minh City residents will be burdened with higher land tax bills next year after the goverment decided to charge more for the city's improved infrastructure.
Property valuations in some districts of Ho Chi Minh City will more than double next year under a new land valuation system proposed by the municipal government.
The HCMC People's Committee has recently submitted a proposal to the city legislature to have land valuations on 1,899 streets adjusted for the new year. The city has 2,740 streets.
If passed by the city People's Council, the new land valuation system will come into effect on January 1,2009. But residents in some parts of the city will be hit much harder than others - with the new land valuations ranging from VND110,000 (US$6.50) per square meter to VND81 million ($4,800) per square meter.
Downtown Dong Khoi, Nguyen Hue and Le Loi streets will have the highest land valuations of VND81 million per square meter, 20 percent higher than the current valuation of VND67.5 million ($4,000) a square meter.
Land in Thieng Lieng Residential Area on the city's outskirts will be valued at the lowest rate of VND110,000 per square meter.
Under the proposal, land values in District 2 increase the most - more than double the current rate. A member of the appointed board responsible for land price adjustments said current land values in District 2 were far too low.
Huynh Cong Hung, deputy head of the Economic and Budget Committee under the city People's Council, said the increase was reasonable since a lot of money had been invested in the district's infrastructure this year.
Many traffic projects will be completed over the next couple of years, which will make the district more accessible, Hung said.
According to the city People's Committee, Phu My Bridge will open to traffic at the end of next year, linking districts 2 and 7. Work on arterial roads to the Thu Thiem Bridge, which opened early this year to connect Binh Thanh District and District 2, will also be finalized next year.
Land values in District 7 and Binh Thanh District, where infrastructure has also been improved, are also set to rise by 50-100 percent. In inner-city districts, including 1, 3 and 5, land valuations will rise by between 30 and 50 percent.
The lowest increase in land values, of less than 10 percent, will be in Go Vap, Tan Phu, Binh Thanh, Binh Chanh, Cu Chi and Nha Be districts.
The proposed new valuation system caught the local real estate market by surprise. With the market losing steam since the beginning of this year, land prices have in fact fallen sharply since last year.
But members of the board responsible for land valuation adjustments said they had hired an assessing company to survey land prices over the city before making their decision.
Although the property market had stalled, the value of city land had increased because of the new infrastructure, they said.
Nguyen Thi Cam, deputy director of Dat Luat Law Firm, said she expected the proposed higher land valuations would flow into the property market, possibly increasing selling prices in some areas.
Land valuations set by the city administration every year since 2005 are mainly used for tax purposes. The proposed increase means residents will have to pay higher land use taxes.
A resident in District 7, who did not wish to be named, said he had a land use tax bill of VND70 million ($4,150), dating back to 2007. If land valuations in the district increase as proposed, his bill will balloon to VND150 million ($8,890).
Analysts said the proposed increase may encourage sellers to avoid properly registering property transactions.
Property valuations in some districts of Ho Chi Minh City will more than double next year under a new land valuation system proposed by the municipal government.
The HCMC People's Committee has recently submitted a proposal to the city legislature to have land valuations on 1,899 streets adjusted for the new year. The city has 2,740 streets.
If passed by the city People's Council, the new land valuation system will come into effect on January 1,2009. But residents in some parts of the city will be hit much harder than others - with the new land valuations ranging from VND110,000 (US$6.50) per square meter to VND81 million ($4,800) per square meter.
Downtown Dong Khoi, Nguyen Hue and Le Loi streets will have the highest land valuations of VND81 million per square meter, 20 percent higher than the current valuation of VND67.5 million ($4,000) a square meter.
Land in Thieng Lieng Residential Area on the city's outskirts will be valued at the lowest rate of VND110,000 per square meter.
Under the proposal, land values in District 2 increase the most - more than double the current rate. A member of the appointed board responsible for land price adjustments said current land values in District 2 were far too low.
Huynh Cong Hung, deputy head of the Economic and Budget Committee under the city People's Council, said the increase was reasonable since a lot of money had been invested in the district's infrastructure this year.
Many traffic projects will be completed over the next couple of years, which will make the district more accessible, Hung said.
According to the city People's Committee, Phu My Bridge will open to traffic at the end of next year, linking districts 2 and 7. Work on arterial roads to the Thu Thiem Bridge, which opened early this year to connect Binh Thanh District and District 2, will also be finalized next year.
Land values in District 7 and Binh Thanh District, where infrastructure has also been improved, are also set to rise by 50-100 percent. In inner-city districts, including 1, 3 and 5, land valuations will rise by between 30 and 50 percent.
The lowest increase in land values, of less than 10 percent, will be in Go Vap, Tan Phu, Binh Thanh, Binh Chanh, Cu Chi and Nha Be districts.
The proposed new valuation system caught the local real estate market by surprise. With the market losing steam since the beginning of this year, land prices have in fact fallen sharply since last year.
But members of the board responsible for land valuation adjustments said they had hired an assessing company to survey land prices over the city before making their decision.
Although the property market had stalled, the value of city land had increased because of the new infrastructure, they said.
Nguyen Thi Cam, deputy director of Dat Luat Law Firm, said she expected the proposed higher land valuations would flow into the property market, possibly increasing selling prices in some areas.
Land valuations set by the city administration every year since 2005 are mainly used for tax purposes. The proposed increase means residents will have to pay higher land use taxes.
A resident in District 7, who did not wish to be named, said he had a land use tax bill of VND70 million ($4,150), dating back to 2007. If land valuations in the district increase as proposed, his bill will balloon to VND150 million ($8,890).
Analysts said the proposed increase may encourage sellers to avoid properly registering property transactions.
Source: Thanh Nien News
Comments