On July 26, 2024, the Government issued Decree No. 100/2024/ND-CP detailing certain provisions of the Housing Law regarding the development and management of social housing ("Decree 100"). In general, Decree 100 adds many new provisions that create incentives for investors in social housing projects ("NƠXH") and make it easier for people to purchase social housing.
Below, ATA Legal Services updates some notable highlights of Decree 100 as follows:
1. Incentives for NƠXH investors to allocate 20% of the area for commercial business/residential commercial housing
Article 23 of Decree 100 specifies Article 85.2(d) of the Housing Law 2023, which stipulates incentive policies for investors allocating 20% of the area for commercial business or residential commercial housing, as follows:
- If SH project investors allocate 20% of the land area for building commercial housing, they will pay land use fees for the commercial housing portion.
- If constructing commercial service facilities (not commercial housing), the 20% land area or floor area will not have to pay land use fees or land rent.
The regulation on investors paying land use fees for the 20% land area for building commercial housing in NƠXH projects helps investors have additional financial resources and proactively manage this area (without being bound by the selling price of commercial housing and other constraints like with social housing). This is a new provision that investors have been expecting, creating positive changes in the future.
2. Highlights of social housing support policies
2.1. Conditions for enjoying social housing support policies
Article 30 of Decree 100 details Article 78 of the Housing Law 2023 on the conditions for purchasing NƠXH. Accordingly, those eligible for social housing policies must meet the following conditions:
Condition 1: Housing conditions
- Do not own housing at the location of the SH investment project.
- Have not purchased/rented/rent-purchased SH.
- Have not received housing support policies in any form in the province/city where the SH project is located.
- If owning housing at the SH project location, the average area per person is 15m² of floor/person.
- For those in the military, civil servants, public employees, etc., they must not be living in official duty housing.
Condition 2: Income conditions
For low-income individuals, poor households, workers, employees working in enterprises, cooperatives, etc., officials, civil servants, public employees:
- Single: Monthly net income not exceeding VND 15 million/month.
- Married: Combined monthly net income of both spouses not exceeding VND 30 million/month.
(Income is calculated according to the payroll, salary table confirmed by the workplace)
2.2. Loan interest rates for SH purchases
Article 48.3.a of Decree 100 specifically stipulates that loan interest rates for NƠXH purchases are determined by the loan interest rates for poor households as prescribed by the Prime Minister from time to time.
Accordingly, overdue interest rates are set at 130% of the loan interest rate, and the maximum loan amount is 80% of the value of the purchase, lease, or lease-purchase contract; if building or renovating, the maximum loan amount is 70% of the estimated value or capital use plan and not exceeding 70% of the total value of the secured asset.
The maximum loan term is 25 years from the date of the first disbursement.
2.3. Selling social housing
Decree 100 limits the sale of NƠXH within five years from the date of full payment for NƠXH. If there is a need to sell within this period, it is only permissible to:
- Sell back to the NƠXH project investor or
- Sell to eligible beneficiaries of NƠXH policies.
The maximum selling price is the NƠXH price in the purchase contract with the investor.
Moreover, after five years from the date of full payment, Decree 100 allows buyers to sell to any individual at market prices.
3. Individuals investing in NƠXH for rent must comply with quality standards from grade IV and above
Decree 100 specifies more clearly the type of housing and the standards for NƠXH built under a project. If NƠXH is an apartment building, it must meet the following requirements:
- Must be designed, constructed with self-contained facilities, complying with national technical regulations and appropriate standards as per the law;
- The minimum usable area per apartment is 25 m², and the maximum is 70 m²;
- The maximum usable area of the apartment can be increased by no more than 10% compared to the maximum usable area of 70 m², ensuring that apartments over 70 m² do not exceed 10% of the total SH apartments in the project.
If NƠXH is an individual house built under a project, it is only allowed to be constructed in communes in ethnic minority and mountainous areas as prescribed by the Prime Minister, and must comply with the following:
- Must be designed and constructed according to national technical standards for construction planning;
- Construction density, land use coefficient, and height of individual houses must comply with rural planning or architectural management regulations approved by competent authorities;
- The standard land area for SH as individual houses should not exceed 70 m², with a land use coefficient not exceeding 2.0 times.
For individuals investing in NƠXH for rent, in case of constructing multi-story houses with many apartments, houses with 2 stories or more, and a scale of 20 apartments or more, they must meet the provisions of Clause 1, Article 57 of the Housing Law. If the house has 2 stories or more and a scale of less than 20 apartments, it must meet the provisions of Clause 3, Article 57 of the Housing Law.
In the case of constructing one-story rental houses, the houses must meet the following:
- Must be self-contained (with separate living rooms, separate sanitation facilities) according to construction standards.
- The average usable area per person must not be less than 8 m² (excluding auxiliary areas).
- The houses must meet the quality standards for grade IV or higher construction works according to the construction law.
- The layout of the one-story house and other construction items in the area must ensure convenient traffic conditions, environmental sanitation, and emergency response conditions (fire, explosion, collapse, etc.).
Decree 100 takes effect from August 1, 2024, replacing Decree No. 100/2015/ND-CP and Decree No. 49/2021/ND-CP, and simultaneously, Article 6 and Clause 16.4 of Decree No. 35/2023/ND-CP, and Article 7 of Decree No. 104/2022/ND-CP will cease to be effective.
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