GOVERNMENT CONSIDERING TAX ON MULTIPLE PROPERTIES

The Ministry of Finance (MoF) is reviewing a proposal to tax individuals who own multiple properties to promote a more transparent and sustainable real estate market, according to Deputy Minister Nguyen Duc Chi on September 27.

In a report to the Government Office, the Ministry of Construction (MoC) has recommended taxing those who own or use multiple properties to curb speculation and short-term trading for profit.

Speaking at a press conference, Chi said the MoF supports the proposal. "This is a very compelling suggestion. The Ministry acknowledges the importance of this and will study the policy," said Chi.

However, Chi stressed that any policy must be comprehensive. "A tax policy alone cannot achieve the full picture," he said, adding that other policies related to land use and planning must also be coordinated to ensure transparency in the real estate sector.

The MoC had earlier called on the financial sector to collaborate on drafting tax policies for second homes or unused properties, as property and housing prices have skyrocketed since the start of the year. In some suburban land auctions, winning bids have soared to as high as hundreds of millions of VND per square metre, significantly above starting prices, distorting the healthy development of the market.

Besides land, the condominium market has also experienced steep price increases. Data from the Vietnam Association of Realtors (VARS) shows that in the second quarter, apartment prices in Hanoi and Ho Chi Minh City have surged 58 per cent and 27 per cent respectively since 2019.

More than 80 per cent of this year’s new supply is priced above VND50 million ($2,000) per sq.m. In suburban areas, prices range from VND40-80 million ($1,600-$3,200) per sq.m, while in central areas, prices exceed VND100 million ($4,000) per sq.m.

This is not the first time a tax on second properties has been proposed to cool the housing market.

VARS recently recommended a real estate tax targeting buyers of second homes and owners of idle projects, with increasing rates for transactions where properties are held for short periods.

Last year, voters in Ho Chi Minh City called for taxes on second homes and higher levies on vacant land or properties that aren’t generating value. At the time, the MoF said it was working on a draft of the Real Estate Tax Law, which would include such measures. Authorities plan to introduce the law in the 2024 legislative agenda, but for now, the proposals remain under consideration.

Source: VIR