Not suitable for the current period
In the draft Law on Personal Income Tax (amended), the Ministry of Finance proposes a way to calculate personal income tax (PIT) for real estate transfers based on net interest - that is, selling price minus purchase price and related costs.
The applicable tax rate is 20% on taxable income, calculated for each transfer. In case the purchase price and cost cannot be determined, the tax will be calculated directly on the selling price with the progressive tax rate according to the holding period: 10% if under 2 years; 6% from 2-5 years; 4% from 5-10 years; 2% if over 10 years or inherited assets.
This is considered a significant effort to tighten short-term speculative activities and increase transparency in transfer pricing, forcing sellers to fully declare capital prices and actual costs, helping the data system accurately reflect real value.
However, many opinions are concerned that this policy will accidentally eliminate part of the investment driving force - which is an important "source of oxygen" for the market at the present time.
According to a recent survey conducted by batdongsan.com.vn with more than 1,000 people looking for real estate, up to 59% of survey participants bought real estate mainly for investment purposes instead of for living. Among them, the number of people who own real estate and intend to sell within a year accounts for a large proportion.
This reflects the fact that Vietnamese people love to invest in real estate but the holding time is short and tend to "sell when the price is right", flexibly shifting capital flow to other assets that are more profitable at each time.
Regarding this issue, sharing with Lao Dong reporter, Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club - said that in the long term, this policy is correct but not really suitable in the current period when the market is still in a difficult period and recovering.
According to Mr. Diep, such a sudden change in tax rates can easily cause confusion and strong reactions in society if there is no adequate communication and a clear roadmap.
"If issued at the wrong time, the policy can further sluggish the market, and transactions decline, affecting the economy" - Mr. Diep emphasized.
Need for a full data system
This expert added that to effectively implement this method, there needs to be a complete data system on real estate transaction history to accurately determine capital prices, along with conditions for invoices and documents proving the deducted costs.
At the same time, the implementation must be synchronous with policies related to land and housing and based on a strong enough information technology platform in managing real estate registration and transfer.
This will help tax authorities have enough information and legal basis to determine the holding period as well as other necessary factors to serve tax calculation.
From a legal perspective, Lawyer Nguyen Van Tuan - Director of TGS Law Firm LLC (Hanoi Bar Association) - said that the 20% tax rate that hears about has "shocked" the majority of people, especially when they do not clearly understand that this is a tax on interest, not the total transfer value.
When there is no transparent database, unclear purchase prices and no specific instructions on costs, sellers will be afraid of false declaration. They will choose to "go inless", waiting for clearer policies.
In addition, buyers will also be affected if the seller pushes the price up to "carry the tax". Finally, the already quiet market is now more hesitant, liquidity is declining further.
This lawyer suggested that for the new tax policy to be effective, it is necessary to build a unified, central-local, public and easy-to- view national real estate database. This system needs to integrate purchase price, selling price, transfer time, purpose of use, ownership history...
