Vietnam | Ministry of Finance: Will study taxing people who own a lot of real estate

In a report sent to the Government Office, the Ministry of Construction proposed a tax policy for cases of owning and using multiple houses and land to limit speculation and buying and reselling in a short time to make a profit.

At the press conference on the morning of September 27, Deputy Minister of Finance Nguyen Duc Chi said that the Ministry of Finance completely agreed with this proposal of the Ministry of Construction. “A very acceptable proposal. The Ministry of Finance notes and studies this policy,” Mr. Chi said.

However, leaders of the Ministry of Finance also said that the policies proposed need to be comprehensive, so that the real estate market is transparent. “Tax policy alone will not meet comprehensiveness, the ultimate goal will not be achieved,” he said, saying that other policies such as land and planning must also be synchronized.

Previously, the Ministry of Construction requested the finance sector to jointly research and advise on tax policies for second or abandoned houses and unused land. This comes in the context of real estate and housing prices continuously increasing sharply from the beginning of the year until now. Many land auctions in suburban districts have winning prices of up to hundreds of millions of dong per square meter, many times higher than the starting price, affecting the healthy development of the market.

In addition to land, the apartment segment also increased in price. According to data from the Vietnam Association of Real Estate Brokers (VARS), the apartment price index in Hanoi and Ho Chi Minh City in the second quarter increased by 58% and 27% respectively compared to 2019. More than 80% of the year’s supply opened for sale. Now the price is from 50 million VND per m2 or more. Real estate prices in suburban areas range from 40-80 million VND per m2, in the center up to more than 100 million VND per m2.

In fact, this is not the first time a second property tax solution has been proposed to lower house prices. Recently, VARS also proposed a real estate tax policy applicable to two subjects, including buyers of second or more homes and owners of abandoned projects. The tax rate will gradually increase with transactions where the seller has a short ownership period.

Last year, Ho Chi Minh City voters proposed taxing second homes and imposing higher taxes on vacant properties that do not gain value from the land. At that time, the Ministry of Finance said it was researching and developing a project on the Real Estate Tax Law, which mentioned tax policy regarding this behavior. Authorities plan to add this law project to the 2024 Law and Ordinance Development Program. However, currently these proposals are still tentative.