On July 1, 2025, Decree 181/2025/ND-CP of the Government officially took effect, detailing the implementation of a number of articles of the Law on Value Added Tax (VAT), in which a notable point is the specific regulation on tax calculation prices for real estate business activities.
According to Article 8 of Decree 181/2025, the taxable price for real estate is the selling price without VAT, deducted from land use fees or land rent paid to the state budget (land price deducted). How to determine deducted land prices is regulated in detail in the following cases:
Receiving land allocation and lease from the State: In case the enterprise is allocated land or leased land with one-time payment by the State for the entire lease term (whether approved or not through auction), changing the purpose of land use, adjusting land use rights or land use term... the land price to be deducted is land use fee, land rent paid at one time, calculated according to the Government's regulations on land use fee collection and land lease. The amount of compensation, support, and site clearance that the enterprise advances (if any) cannot be deducted.
Receive real estate transfer: If a business establishment buys back land use rights from another organization or individual, the land price to be deducted is land use fee, land rent paid for that land plot, not including infrastructure value. However, businesses are still entitled to deduct input VAT from infrastructure construction costs if it arises.
Contributing capital using land use rights: If the enterprise receives capital using land use rights from an organization or individual, the land price deducted for calculating VAT is the land use fee and land rent paid to the budget.
BT contract for payment by land fund: In case of public-private partnership (PPP) projects under BT contracts, the land price deducted is the value of land fund used for payment, determined according to the provisions of the law on PPP investment.
Construction, business of infrastructure, houses for sale or rental: Taxable price is the amount collected according to project progress or payment progress stated in the contract, deducting the land price determined in the above cases. The deducted land price will correspond to the percentage of the amount collected on the total contract value.
Apartment buildings with many floors with many households: The land price is deducted for each apartment determined by the total land price deducted divided by the construction floor area, not including the common area such as corridors, stairs, basements, etc.
Land price to be paid to the budget cannot be determined: In case the land use fee or land rent of the transferred land plot or plot cannot be determined, the VAT calculation price will be the transfer price without value added tax.
These regulations are expected to clarify the method of calculating land prices subject to VAT for real estate, thereby helping businesses be more proactive in calculating costs, while supporting tax authorities to effectively manage real estate business activities, minimizing budget losses.
All details on how to calculate land prices to calculate value added tax for real estate business are stipulated in Decree 181/2025/ND-CP, effective from July 1, 2025.
