In the draft Law on Personal Income Tax (replacement), the Ministry of Finance proposes two methods of tax calculation for real estate transfer transactions. The first method is applied in cases where the seller can prove the purchase price and related reasonable costs. At that time, taxable income will be determined by the difference between selling price minus purchase price and cost, then multiplied by a tax rate of 20%.
The second method applies to cases where there is not enough basis to determine the purchase price and related costs. The tax authority will calculate personal income tax directly on the selling price, applying the progressive tax rate table according to the time holding the asset.
For real estate transferred after holding for less than 2 years, the tax rate is 10%. From 2 to less than 5 years, the tax rate is 6%; from 5 to less than 10 years is 4%; and from 10 years or more or originating from inheritance will only be subject to a tax rate of 2%.
The holding period is calculated from the time the individual has the right to own or use it until the transfer is made. The effective date is determined from the effective date of the new law.
For real estate originating from inheritance, the holding period will not be counted to apply the progressive tax rate. When individuals receive inheritance and transfer assets, the personal income tax rate remains at 2%, similar to current regulations.
Compared to the plan submitted to the National Assembly in the previous questioning session, the content of this proposal has been adjusted. At that time, the Ministry of Finance proposed two options: (1) apply a tax rate of 20% on income if the purchase price is determined, and (2) calculate 2% on the total transfer value if the input is not determined.
At the press conference on July 2, Mr. Truong Ba Tuan - Deputy Director of the Department of Tax, Fee and Charge Policy Management and Supervision - said that the progress of the draft law closely follows the direction of the Government and is expected to be submitted to the National Assembly at the October session.
Previously, at the Workshop "Personal income tax law - Ensuring fairness, promoting growth" organized by Lao Dong Newspaper in coordination with the National Economics University on March 14, 2025, Associate Professor, Dr. Phan Huu Nghi - Deputy Director of the Institute of Banking and Finance (National Economics University) said that the current tax calculation method still has many shortcomings. Currently, sellers must pay 2% of the total transfer value stated in the contract, regardless of profit or loss. This method is simple and easy to manage, but opens up the risk of loss of revenue because sellers often declare lower prices than the actual price.
From that reality, some experts believe that it is necessary to apply the method of calculating a 20% tax on real income. In cases where there is no document proving the input, the 1-2% sealing rate should be applied on the land price list issued by the provincial People's Committee. According to experts, this option accurately reflects the nature of income, while also overcoming the situation of incorrect transfer pricing.
