The Ho Chi Minh City Real Estate Association (HoREA) has proposed that the State Bank of Vietnam establish a lending mechanism allowing young people aged 18-45 to purchase their first home with a commercial interest rate of 6-7% per year.

This proposal is part of HoREA's recommendations for an upcoming conference on promoting social housing and ensuring a stable and sustainable real estate market.

Proposed financial solutions for affordable housing

Regarding financing, HoREA has recommended that the Ministry of Construction and the State Bank of Vietnam submit a proposal to the prime minister to set a loan interest rate of 4.7% per year for low-income households in 2025 through the Vietnam Bank for Social Policies.

This would facilitate preferential loans for purchasing or leasing social housing, as well as for constructing, renovating, or repairing homes, in accordance with Decree 100.

Currently, the loan interest rate for low-income households, as specified in Official Letter No. 4524 dated August 1, 2024, from the Vietnam Bank for Social Policies, stands at 6.6% per year. HoREA argues that this rate is too high.

Special home loan policy for young buyers

In addition to assisting low-income households, HoREA has proposed a special lending policy for young people.

Specifically, it suggests that the State Bank of Vietnam create a mechanism for young individuals aged 18-45 to obtain home loans at a reasonable commercial interest rate of 6-7% per year, secured by the purchased property. The loan term would range from 10 to 15 years.

According to HoREA, this policy would act as a major stimulus, encouraging businesses to restructure existing real estate projects and shift investment toward affordable housing. Combined with the national program to develop at least one million social housing units between 2021 and 2030, this initiative would help stabilize and sustain the real estate market.

"The majority of young people have a long working life ahead of them and will experience significant income growth over time.

Typically, after 10-15 years, their income doubles or even triples, making the risk for commercial banks relatively low," HoREA explained.

Tax incentives to encourage social housing rentals

HoREA has also recommended that the Ministry of Construction propose tax incentives for businesses investing in social housing for rent.

Specifically, it suggests amending the Value-Added Tax Law and Corporate Income Tax Law to allow social housing rental projects to benefit from a 3% value-added tax rate and a 6% corporate income tax rate.

These incentives aim to encourage more investment in social housing specifically for rental purposes, ensuring a stable and affordable housing supply for those in need.

Nguyen Le