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Tuesday, June 25, 2024

Finance Ministry suggests taxing land and buildings separately

By Thai Huy

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HCMC – The Ministry of Finance has proposed developing a new property tax law to separate the tax on land from that on buildings.

Figures showed that tax collection from agriculture and non-agriculture land accounted for 0.24% of total state budget revenue and 0.03% of the country’s gross domestic product, which is considered too low compared to other countries.

Explaining the reason, the ministry said Vietnam has yet to impose a tax on buildings, although urbanization has added significant value to land.

It thus proposed the law should impose accumulative tax on buildings, meaning the higher the value of a property, the higher tax the owner would have to pay.

Besides, the ministry said taxes should be higher for premium apartments priced over VND50 million per square meter.

The tax on condominiums for average income earners should enjoy a lower tax rate, while social homes would be exempt from the tax.

It also suggested raising the current tax level on land, especially for vacant land and properties used for unintended purposes.

This would demotivate speculation on land and encourage efficient land use, the ministry reasoned.

The draft bill is slated to be submitted to the National Assembly in October next year.

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