According to the Department of Natural Resource, Environment and Housing, the Ha Noi People's Committee gave permission to the Management Unit on State-financed Projects to commence preparation work for the creation of a pilot social housing fund.
It is understood that the Management Unit will be allowed to study and establish a plan for a housing fund with relevant agencies. A report will then be issued to the Council, likely in the second quarter of 2006.
If the Council accepts the report, Ha Noi will become the first city in Vietnam to launch a pilot project on social housing. This could lead to the development of between 500 and 1,000 apartments in the Viet Hung urban centre in the Long Bien District. The apartments will be leased, and priority allocations will go to employees of the armed forces, state-run companies, and workers at industrial zones in Ha Noi.
The Ha Noi People's Committee is reported to have given the Department of Natural Resources, Environment and Housing (and other relevant agencies) the tasks of conducting sociological surveys and creating the initial plans for the fund. These will provide options for policy, planning and design, finances, management, and utilisation of the housing fund.
Under a draft regulation on housing management, currently being compiled, state-run agencies will be responsible for improving the accommodations of their employees. Those agencies will also have to guarantee payment for their employees when they are approved to lease or buy housing from the City's housing fund.
Source: Vietnam News, 16 March 2006
In the Czech Republic, construction of new houses and apartments is currently subject to a 5% VAT rate, but as of 1 January 2008 a 19% VAT rate will apply, in line with VAT rates in other EU member states. Developers and buyers alike are eager to learn what projects will be subject to the higher VAT rate.
The terms of the VAT rate will be under discussion among EU officials again in 2007. The ministries of Regional Development and Finance have proposed an exemption to the higher rate, preserving the 5% VAT for new housing construction in the so-called social housing category.
If Parliament approves the exemption this autumn, a new definition of social housing will be incorporated into the VAT law as of 1 January 2008. The reduced rate would apply to housing built with contributions from the government, for example, through subsidised mortgages or home-building savings, as well as retirement homes, children's homes and other residences with social services.
In a bid to extend the reduced VAT rate to a wider range of construction projects, the draft legislation would also include all apartments with under 90 square meters of floor area, as well as houses under 150 sqm - under the definition of social housing. The question many are asking is whether a high-value 89 sqm apartment in an affluent area of Prague can fall under the social housing category.
The Czech government is also seeking an exemption from the higher VAT rate for renovations of private apartments and houses, which could be valid until the end of 2010. The Czech state must apply to the European Commission by 31 March 2006. If the exemption is denied, the reduced VAT rate will only apply to social housing.
Source: Czech Business Weekly, 6 March 2006