New Tax policy for owning property in VietnamTips & Advices
February 02, 2018
New Tax policy for owning property in Vietnam
In addition to taxes, property transfer fees, from 2017, people who own two or more properties may be subject to income tax, in accordance with the Law on Property Tax.
According to the head of the State Budget Department (Ministry of Finance) Vo Thanh Hung, property tax is a direct tax, hit on people with large assets, many ownership. For example, for people with 2-3 houses, the second home will be taxed.
Congress recently passing the bill of tax on owning more than one property
In fact, this bill was proposed more than five years ago, called housing tax, in the Law of Housing Tax, but at that time the proposal was not approved by the Congress. Former Deputy Minister of Construction, Nguyen Tran Nam, chairman of the Vietnam National Real Estate Association, said that the taxation from the second property is reasonable.
He said that this is a policy that both increases the state budget, contributes to stabilize the real estate market, minimizes speculation and wastes housing.
However, according to some opinions, how to determine the second, third is not easy.
For instance, someone owns a house, but to the second home onwards, they leave their wives, children and relatives in ownership, it is obvious that the tax authorities are hard to find the basis for tax calculation.
In the process of drafting the Law on Housing Tax before, the National Finance Assembly - Budget Committee has agreed not to tax housing because there is no high consensus among the citizen.
According to Phung Quoc Hien, the former chairman of the National Finance Assembly and Budget Committee, one of the objectives of taxation on housing is to limit housing speculation, but houses are attached to the value of the land, and speculation is on the land, based on the location, terrain of the land, but not speculation on the construction of houses on the land.
Tax now apply to housing, aiming people have large asset.
Therefore, in order to limit speculation, it is necessary to focus on the regulation of land.
At the same time, in his opinion, if housing tax is actually applied to property tax, in practice, apart from housing, there are many other types of assets of great value, even larger than the value of construction. Many types of houses such as cars, airplanes, ships, yacht, etc.
If property taxes are imposed on houses, the fairness of a tax is not justified. On the other hand, some countries with higher levels of development than Vietnam have not yet applied the tax on housing. And in particular, the expected tax revenue from housing for the State budget is not large, while the cost of the work is not small.
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