According to Point b, Clause 1, Article 3 of Circular 111/2013/TT-BTC, income from transferring houses, land use rights and assets attached to residential land of individuals in cases where the transferor has only one house, land use rights in Vietnam are also exempt from tax.
Accordingly, individuals transferring houses and land use rights are exempt from tax and must meet the following conditions:
- Only have the right to own a house or the right to use a residential land plot (including the case of a house or construction works attached to that land plot) at the time of transfer, specifically as follows:
+ The determination of house ownership rights and land use rights is based on the Certificate of land use rights, house ownership rights and other assets attached to land.
+ In case of transferring houses with common ownership rights, residential land with common use rights, only individuals who do not have the right to own houses and land use rights in other places are exempt from tax; individuals with common house ownership rights, residential land use rights that also have the right to own houses and land use rights are not exempt from other taxes.
+ In case the couple has the common right to own a house or land use and is also the only member of the couple but the husband or wife still has a house or land for private residence, when transferring a house or land for private residence, the husband or wife does not have a house or land for private residence and is exempt from tax; the husband or wife has a house or land for private residence and is not exempt from tax.
- Having the right to own a house or land use right up to the time of transfer is at least 183 days.
The time to determine the home ownership and land use rights is the date of issuance of the Certificate of land use rights, home ownership rights and other assets attached to the land. In particular, in cases of re-issuance or exchange according to the provisions of the law on land, the time of determining the house ownership right and land use right is calculated according to the time of issuance of the Certificate of land use right, house ownership right and other assets attached to land before being re-issued or exchange.
- Transfer all houses and land.
In case the individual has the right or joint ownership of the house or land use right only but transfers a part, the transfer will not be exempted from tax.
Only houses and land are exempt from tax because the individual transferring the real estate self-declared and is responsible. If found to be incorrect, they will be subject to tax collection and penalties for tax law violations according to the provisions of the law on tax management.
Note, in case of transferring houses and construction works formed in the future, they are not exempt from personal income tax according to this guidance.
Exemption from personal income tax on the transfer of housing and land use rights alone brings many practical benefits to individuals, especially those who only own one asset. This policy helps reduce the financial burden on people in real estate transactions, while creating favorable conditions for them when they need to transfer a single asset, such as to solve financial problems or change residence.
The biggest benefit of tax exemption is to encourage freedom in ownership and transfer of assets, helping to protect the rights of people in special and urgent situations. In addition, this policy also contributes to reducing complicated procedures and unnecessary arising costs, promoting the real estate market to operate more effectively.
