Presiding over the meeting on the draft revised Land Law on the morning of September 21, Member of the Party Central Committee, Deputy Prime Minister Ho Quoc Dung requested the Ministry of Agriculture and Environment to study and include in the revised Land Law the principles on anti-speculation tax and handling of abandoned land. On that basis, the Government will specify details to make policies suitable for reality.
Commenting on this issue, Mr. Nguyen Quoc Anh - Deputy General Director of Batdongsan. com. vn - said that real estate tax includes many types such as tax on abandoned real estate, personal income tax, registration fee or second home ownership tax.
Among them, he believes that two types of taxes that are likely to be applied early in Vietnam are taxes on abandoned real estate, not put into use, and personal income tax when transferred. He cited an example, in the US, real estate owners annually have to pay about 1% of the value of assets. Some other countries apply annual land tax or calculate higher taxes on real estate that is not put into exploitation and use.
Vietnam is gradually referring to many models in the world. Taxing wasteland is reasonable, because the goal is to force land resources to be put into use, exploited to create cash flow or serve production. This also contributes to regulating investor behavior" - Mr. Quoc Anh said.
According to him, if the policy is applied, investors will have to change their mindset, no longer buying land just to hold and wait for price increases, but must consider exploiting and putting assets into use to create cash flow. This both helps reduce the tax burden and increases the value of real estate.
Ms. Giang Huynh - Director of Research and Consulting Department of Savills HCMC - said that in the positive aspect, if reasonably designed and effectively implemented, the policy of taxing abandoned real estate can bring many long-term benefits. The policy will contribute to limiting speculation, forcing real estate owners to consider the efficiency of asset exploitation instead of just holding it to wait for price increases.
At the same time, this also puts pressure on both buyers and project developers, forcing them to consider the actual exploitation capacity, thereby promoting the market to target groups of customers with real use needs, instead of just serving the purpose of surfing.
Dr. Tran Xuan Luong - Director of the Vietnam Institute of Economics and Real Estate Research - said that tax should be focused on real estate that is not put into use, does not create economic value, and does not contribute to society. This is a group that wastes resources and needs to be regulated by tax policies, with tax rates that may gradually increase over time after being abandoned.
However, for effective implementation, according to Mr. Luong, it is necessary to clearly define the criteria for what is abandoned, unused real estate, ensuring transparency and feasibility. This requires a complete and synchronous data system. Currently, real estate data is still lacking and unconsistent between management levels, while people also have difficulty accessing information, even with real estate identification codes that have been implemented.
He emphasized that a synchronous investment process in technology infrastructure, data collection and digitization, as well as guiding people to look up information is needed. When there are standard data, the determination of subjects, areas, usage status and application of new tax policies is ensured to be accurate, avoiding targeting the wrong subjects that need to be encouraged, and not missing the subjects that need to be regulated.
Regarding the impact, Mr. Luong said that tax policy will directly affect the real estate market, similar to the interest rate factor. If implemented on a full database, taxation will reduce speculation demand, adjust cash flow and contribute to reallocating investment resources to other sectors, instead of focusing too much on real estate.
