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Finance Ministry proposes taxing houses worth over VND700 million

Monday,  Apr 16,2018,18:29 (GMT+7)
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Finance Ministry proposes taxing houses worth over VND700 million

HCMC – The Ministry of Finance has proposed imposing a property tax on houses valued at more than VND700 million (US$30,710), according to news website Dan Tri.

At a press conference on the draft law on property tax last Friday, the Ministry of Finance proposed solutions to impose the tax on houses, land, and movable properties like luxury cars, yachts and planes. Houses valued at higher than VND700 million will be subject to a tax of 0.4% on the amount above the threshold.

In fact, the ministry suggested two ways to determine a taxable threshold, either by value or by area of house.

Taxing properties by the area is simple and easy to determine the payable tax amount. However, it covers owners of low-value or makeshift houses and houses in rural areas, but may skip houses with higher values in cities.

According to statistics in 2011 of a national housing development strategy until 2020 with a vision to 2030, if the tax is imposed on houses of over 100 square meters, owners of nearly 1.9 million shanty houses and those in rural areas will be subject to the tax.

Therefore, the ministry was in favor of the tax calculation based on the value of houses to ensure fairness among home owners. Accordingly, houses whose value exceeds VND700 million or VND1 billion would be levied a tax of 0.3% or 0.4%.

With the rate of 0.3%, the ministry expects to collect VND22.7 trillion from owners of houses worth over VND1 billion, or VND23.3 trillion from those whose houses cost more than VND700 million. Meanwhile, the tax rate of 0.4% will help generate VND30.3 trillion or VND31 trillion respectively.

At the press conference, a representative said the ministry preferred the option of 0.4% for houses of at least VND700 million was more.

In addition, the ministry proposed not taxing the ownership of the second home as it is unsuitable to the reality in Vietnam and may hit the local real estate market.

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