Vietnam property developers default on land-use fee

TN News

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Many property developers have been defaulting on land-use fees since 2011 amid the massive downturn in the housing market.

Tien Phong newspaper quoted the General Department of Taxation as saying it has compiled a "blacklist" of companies that owe large sums.

Together they owe over a trillion dong (US$47.8 million), it said.

Hanoi-based real estate company TDC, which is building the Hong Kong Tower, owes more than $2.9 million. It was allowed to defer a third of the amount until May 10.

Hado Group, which owns the four-star Ha Do Mercure hotel in Hanoi, owes $3.7 million, with the tax authorities having deferred payment of $1.6 million until November.

The head of a tax office in Hanoi, who requested anonymity, said many property developers have said they are unable to afford the payments though tax authorities have extended the due date many times.

Companies have to pay interest of 18 percent per year on the back taxes they owe.

Tax authorities expect to collect VND39 trillion ($1.86 billion) in land-use fees this year, down nearly 14 percent from 2012.

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