According to the Ministry of Finance, the current Law on Personal Income Tax (PIT) stipulates that the PIT for real estate transfers is 2% on the transfer price each time. However, many opinions say that this fee does not accurately reflect the nature of income from economic transactions and needs to be changed in the direction of taxing 20% on actual interest - that is, the difference between selling price minus purchase price and related costs.
Receiving comments, the draft Law on personal income tax (replacement) is currently being discussed by the Ministry of Finance with an additional plan to calculate a 20% tax on real estate taxable income. The Ministry of Finance said that preliminary calculations show that applying this method can ensure a tax rate equivalent to the current tax rate, and will be more beneficial in some cases where no interest or loss is incurred.
However, this conversion to tax calculation requires a suitable roadmap, associated with the level of completion of land, housing policies, database systems and information technology infrastructure for real estate registration and transfer. This is to ensure that tax authorities have enough information and legal basis to determine taxable income correctly.
Along with changing the tax calculation method, the draft law also proposes personal income tax rates for real estate transactions based on the time holding assets, in order to limit speculation and price manipulation. This is the content implemented according to the direction of the Central and Government in documents such as Resolution 18/NQ-TW, Official Dispatch 03/CD-TTg and Notice 294/TB-VPCP.
According to the Ministry of Finance, this policy is based on international experience, when many countries apply different personal income tax rates depending on transaction frequency and real estate holding time, to increase costs for speculative behavior. However, the Ministry of Finance will continue to study more experiences from countries with similar conditions to make proposals suitable to the context of Vietnam.
