HCMC – Vietnam has seen a surge in revenue from real estate transfer taxes this year even though the market has almost ground to a halt due to liquidity problems.
In its report on the budget collection of the tax sector, the General Department of Taxation said revenue generated by taxes on transfers, inheritances and gifts of real estate this year is estimated to double the 2021 figure, at VND41 trillion.
The authority attributed the strong revenue growth to a vibrant housing market in the year’s first half.
This year, the property value declared in transfer pricing documents has soared 72%, averagely tripling the price set by the provincial and municipal governments.
A real estate transfer in the southern province of Ba Ria-Vung Tau is a case in point, with its declared price 77 times higher than the price determined by the local government, at VND81 billion.
Meanwhile, HCMC has seen a property selling 27 times higher than the city’s land price table and a house in its neighboring province of Long An at over VND11 billion, while the local government calculated the home value at around VND400 million.
According to the Ministry of Finance, the current regulations on real estate transfer taxes still have some loopholes as they have yet to align with land and real estate business laws. Besides, there is a need for closer cooperation among competent state agencies.
People still have yet to fully understand the law or be aware of the consequences of tax evasion or declaring misinformation to authorities.
To minimize tax losses in real estate transfers, Finance Minister Ho Duc Phoc has assigned the General Department of Taxation to upload information about real estate transfer taxes, as well as land price tables, on its e-Portal in early 2023.