The Ministry of Finance has proposed amending the method for calculating personal income tax on real estate transfers, shifting from a flat 2% tax on the transfer price to a 20% tax on the profit — the difference between the buying and selling prices. This is seen as a critical step to curb speculation, increase transparency, and promote fairness in the real estate market. However, effective implementation will require robust data infrastructure and the application of technology. A 20% tax on profit In the draft amendment to the Law on Personal Income Tax currently open for public comment, the Ministry of Finance proposes a fundamental change in how tax is calculated on personal real estate transactions. Specifically, personal income tax would be levied on the profit — the difference between the selling and purchase prices — rather than applying the current flat 2% tax rate on the total transfer value. The proposed tax rate is 20% of the taxable income and would apply to each transfer transaction. Taxable income from real estate transfers would be defined as the difference between the selling price and the purchase price, after deducting reasonable expenses directly related to generating the income from the transfer. […]
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