Stop real estate speculation with taxes

Low real estate transfer tax is one of the reasons why speculation and price inflation still occur.

At the meeting of the Government Standing Committee with ministries, branches, associations, banks and enterprises on the real estate market situation last weekend, Prime Minister Pham Minh Chinh gave strong instructions on handling acts of creating virtual prices, speculation, manipulation and profiteering, and market manipulation. In particular, he requested the Ministry of Finance to urgently study and promulgate policies on real estate tax on unused land and houses, the difference between land price and selling price, and have a mechanism to handle unclear transactions...

Very urgent

Sharing his views on solutions to combat speculation and manipulation of real estate prices, Mr. Doan Quoc Duyet, Director of Viet Tin Thanh Real Estate Company, emphasized the need to combine many factors to achieve sustainable effectiveness. He said that the most important thing is to build a solid and clear legal system, helping buyers grasp accurate information about the real estate products they intend to trade. In addition, the regulation of supply and demand from the authorities needs to be strengthened, because in reality, many investors still sell based on available capital structures instead of based on real market demand, leading to an imbalance in supply and demand, creating loopholes for speculation. " The Government and ministries and sectors need to promote the application of technology in real estate transactions, helping to closely monitor market activities and prevent virtual sales by scammers. In particular, close coordination between ministries and sectors is considered a key factor to limit false information, minimize forms of price inflation and price pushing in the market" - Mr. Duyet proposed.

Most experts and businesses agree with the Prime Minister 's direction on strict handling to prevent chaos and loss of control in the real estate market. Photo: TRANG NGUYEN

Sharing the same view, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), assessed that the Prime Minister's drastic direction shows that real estate business activities will be prioritized for development in the coming time. He emphasized that fighting speculation, manipulation and price inflation is an urgent task, aiming to build a transparent and healthy market.

According to Mr. Chau, it is necessary to clearly identify subjects at risk of manipulation. He gave an example of "price fixing" in land auctions, when a person who owns a lot of land in an area can intentionally push up the auction price to benefit other plots of land he owns. "They can spend a deposit of several hundred million VND to raise the price of a piece of land to tens of billions of VND," Mr. Chau explained. He also emphasized that the association had proposed adding strict sanctions to this behavior to the Law on Property Auction, but it has not been accepted. Therefore, he hopes that in the future, the Law on Handling of Administrative Violations will add sanctions such as confiscation of deposits and banning participation in auctions for a certain period of time to be sufficiently deterrent.

One of the key solutions proposed by Mr. Chau is to build a national real estate trading floor - a place to concentrate products with clear origin and legal status, completely different from the current private trading floors which mainly serve the transaction of individual apartments. He also noted the need to increase the deposit rate in auctions and bidding activities to prevent speculative profiteering, but it is necessary to consider carefully to avoid causing difficulties for real home buyers.

Fully exploit tax tools

The HoREA Chairman also proposed that the Government and ministries and sectors need to specify many other solutions, including tax policies. He cited the real estate tax model in the US, which applies a tax rate of 1.21% on the value of assets each year, helping to regulate and recreate the cycle of real estate use. In Vietnam, the Ministry of Finance is proposing a real estate transfer tax of 20% on the difference between the selling price and the purchase price after deducting reasonable expenses. This is an important policy, requiring a transparent and clear database to create trust and ensure fairness for the people.

However, he noted that the application of tax on many houses needs to be clearly distinguished, and the same tax rate cannot be applied to different types of assets in terms of area, location and value. For example, small level 4 houses in rural areas cannot be taxed like villas in Ho Chi Minh City. He also emphasized the need to complete digital technology infrastructure, electronic personal identification codes and build a national database on real estate to serve as a foundation for effective and transparent tax management and collection. At the same time, the HoREA chairman also emphasized the propaganda work for people to declare honestly and in accordance with the law. "The land price list needs to be built in detail for each plot to ensure accuracy and consistency with actual market value," Mr. Chau emphasized.

From a professional perspective, Mr. Nguyen Van Duoc, General Director of Trong Tin Accounting and Tax Consulting Company, believes that the current real estate transfer tax rate is too low, contributing to encouraging speculation and the situation of abandoned land. He analyzed that applying a 2% tax on the total value regardless of profit or loss leads to inequality and budget loss. Meanwhile, the 20% tax regulation on profits was abolished due to the difficulty of controlling price declarations. However, with advances in non-cash payments and transaction registration systems, Mr. Duoc believes that it is time to re-apply it to be fair and limit speculation.

This expert also proposed building a national database on real estate transactions, strengthening supervision and responsibility for notary organizations and trading floors, helping people prove incurred costs and creating conditions for transparent tax management.

Mr. Dong Minh Hong, Director of DVL Tax Agency Company Limited, agreed that the 20% tax on profits is reasonable and should be applied to individuals to ensure fairness with businesses. According to Mr. Hong, this tax rate will contribute to reducing real estate hoarding and limiting price speculation. "In the early stages, if fraudulent price declarations are discovered, the State can criminally prosecute tax evasion, thereby helping the market become more transparent and healthy," he said.

Thoroughly handle "fraudulent brokers"

Master - Lawyer Tran Quoc Bao, Ho Chi Minh City Bar Association, emphasized that real estate is a large asset, many people want to own it to accumulate but not everyone has enough legal knowledge and market understanding. He warned that this is a favorable environment for scammers to take advantage of, carry out acts of price inflation, and manipulate customers' psychology. He suggested that the authorities need to handle it seriously to prevent chaos and loss of control in the market.

According to lawyer Bao, most of the fraud cases related to civil transactions, customers signing sales contracts and making deposits are voluntary and legal acts in form, so it is very difficult to determine the right or wrong price to handle. As in the case of Ms. Mai Lien (residing in District 11, Ho Chi Minh City) - a victim of real estate price manipulation and inflation. She said she was lured into buying a piece of land in Bao Loc (Lam Dong) for 1.3 billion VND while the actual price was only about 300-400 million VND. Therefore, she hopes that the authorities need to take drastic action and thoroughly handle fraudulent brokers, in order to help reduce market chaos.

Source: https://nld.com.vn/chan-dau-co-nha-dat-bang-thue-196250526213600293.htm