HoREA continues to propose that long-term rental housing be considered social housing.

In its proposal to remove difficulties and obstacles and promote the development of social housing sent to the Prime Minister and ministries, the Ho Chi Minh City Real Estate Association (HoREA) proposed that the Ministry of Construction consider and submit to the Prime Minister for consideration and addition to Decree 100, recognizing "long-term rental houses by month or year" as a type of social housing.

This is a private house invested in and built by individuals and households for rent, with tenants mainly being workers, laborers, and immigrants.

According to HoREA, owners of this type of boarding house also need to enjoy preferential policies on credit, value added tax, and personal income tax, because they directly invest in housing for the poor and low-income workers to rent to stabilize their accommodation when living and working in Ho Chi Minh City.

HoREA data shows that in Ho Chi Minh City, there are about 60,470 individuals operating long-term rental rooms, with a total of 560,000 rooms, providing rental accommodation for 1.4 million people. Of these, there are 34,800 concentrated rental areas with more than 357,000 rooms and nearly 203,000 rooms for rent in individual apartments.

However, currently, these motel owners are subject to a lump-sum tax calculated on revenue from long-term accommodation services, equivalent to the tax rate applied to mini-hotel owners who are subject to daily and hourly accommodation service tax.

The tax rate these households are paying is 7% of their accommodation service revenue, including 5% VAT and 2% personal income tax according to Circular 40 of the Ministry of Finance. HoREA believes this is unreasonable.

“If long-term rental houses are recognized as social housing, landlords will enjoy preferential credit and tax policies, such as a 50% reduction in value-added tax and personal income tax for social housing. At that time, landlords of long-term rental houses will only have to pay a lump-sum tax/revenue of 3.5% and will be able to borrow preferential credit to build, renovate or repair boarding houses to serve tenants,” HoREA’s proposal stated.

The proposal to consider and classify long-term rental housing as social housing has been diligently proposed by HoREA in recent years.

Mr. Le Hoang Chau, Chairman of HoREA, said that the type of boarding house business has developed strongly over the past 30 years in Ho Chi Minh City, playing an important role in solving the housing needs of many different groups, from workers, civil servants, students, low-income people, immigrants... so the owners of this boarding house need to be given incentives and support to be able to invest and upgrade boarding houses to better serve the needs of tenants.

The conference to remove difficulties and obstacles and promote the development of social housing is scheduled to be held next week, from February 24 to 28.

In its proposal, HoREA also stated that the real estate market in 2024 has overcome the most difficult period and moved to the recovery phase, growing again with the trend of each year being better than the previous year. However, the development is not really stable, because the market is lacking in project supply, leading to a lack of housing supply.

It is worrying that from 2020 to now, the high-end housing segment has dominated the market, but there is a shortage of affordable commercial housing, that is, the price is under 3 billion VND/unit. Social housing in particular is in great shortage, leading to continuous and high housing prices, beyond the financial capacity of the majority of middle-income people. This makes low-income urban people increasingly move away from their dream of owning a house.

According to HoREA’s forecast, the real estate market in 2025 will still be difficult. However, 2025 will be a “pivotal” year for the market to move into a new era of safe, healthy and sustainable development from 2026 onwards.