Removing obstacles to real estate tax policy.

Many apartment projects are being developed in Da Nang . Photo: Hai Au/TTXVN

In Prime Minister Pham Minh Chinh's Official Dispatch No. 190/CD-TTg issued on October 7th regarding the decisive implementation of solutions to increase supply, reduce housing prices, and stabilize the market, Prime Minister Pham Minh Chinh requested the Ministry of Finance to urgently finalize a report on tax policy for real estate, considering this as one of the key solutions to increase supply, bring housing prices closer to people's affordability, and stabilize the market.

The story of real estate tax reform is not new. This move appears when the market shows signs of overheating or collapsing. At that time, the proposal to tax property is brought up again as a solution to curb speculation and create a sustainable source of revenue for the budget. But after each round of discussion, this topic fades away when the market cools down.

The prolonged hesitation stems from concerns about the impact on the population, while average incomes remain low and housing prices are high. This is compounded by the pressure from two conflicting interest groups: those who own numerous properties, and the working class who need housing.

According to Professor Dang Hung Vo, former Deputy Minister of Natural Resources and Environment , this "contradiction" is what makes the management agency overly cautious, causing tax reform to mainly remain in theoretical research rather than concrete action. But if the delay continues, the market will find it difficult to return to a healthy operating state, where investment decisions are based on real cash flow rather than on the expectation of holding land and waiting for prices to rise.

This time, the government's political resolve is considered clearer as it views taxation as a "strong remedy" to restore market order. The goal is to bring market segments closer to real demand, curb speculation, bring selling prices closer to their true value, and unlock capital for buyers with genuine housing needs or those investing in production and business.

However, for taxes to be effective, a transparent data foundation is a prerequisite. Meanwhile, for many years, the land and transaction information system has remained fragmented and dispersed across various agencies. Ministries, departments, and localities build data according to their own standards, lacking synchronization, which often leads to inaccurate valuation of assets—a key factor in tax calculation.

According to Bui Van Doanh, Director of the Vietnam Institute of Real Estate Research, to develop a feasible tax policy, it is necessary to start by "cleaning up" the data, from ownership rights, planning, location, area to market value and transaction history of each property.

Because a lack of data would lead to widespread under-declaration of asset values, causing both revenue losses and creating inequality between those who comply with the law and those who circumvent it. A prime example is the "two-tiered pricing" system – the biggest bottleneck hindering tax reform.

A long-standing problem is the practice of "two-price" transactions. The actual price and the price stated in the notarized contract differ significantly. Many properties are bought and sold at prices 1.5 to 2 times higher than the contract price to reduce tax obligations. According to experts, this phenomenon not only distorts the market but also makes designing tax policies based on real value impossible.

Removing obstacles to real estate tax policy.

Real estate in the central area of Ho Chi Minh City. Photo: Hong Dat/TTXVN

Economist Vu Dinh Anh analyzed that in order to have a fair tax mechanism, the State must control the actual buying and selling prices. However, with the current fragmented data system, the management agency is almost unable to fully monitor price fluctuations, leading to difficulties in effectively applying new policies.

Experts generally agree that the biggest "bottleneck" today is not whether or not to impose taxes, but rather how to make the tax actually work in practice. To achieve this, data transparency, standardized information, verification of the true value of transactions, and a clear implementation roadmap are urgent requirements.

Only when these barriers are removed will taxation become an important tool for the stable and sustainable functioning of the market. Conversely, if the issue continues to fall into a vicious cycle of "discussed when it's hot, forgotten when it cools down," the real estate market will find it difficult to escape the supply-demand imbalance that has persisted for many years.

One common concern in the market is that the tax will directly impact those who own a second property. However, according to experts, the policy's goal is not to target all owners of multiple properties, but rather to target those who hold unused or underutilized assets, leading to waste and limiting supply.

Associate Professor, Dr. Nguyen Quang Tuyen affirmed that it is necessary to distinguish between those who own multiple properties to serve legitimate needs and those who hoard them to wait for prices to rise. For speculative groups, taxation is necessary to force them to either put their assets into use or transfer them, thereby increasing transaction volume and supplementing tax revenue.

This expert argues that concerns about a market collapse due to taxation are unfounded. A sell-off will only occur among those using excessive financial leverage or engaging in short-term speculation. Those with genuine financial capacity will not be severely affected.

To a certain extent, the market still needs speculative activity to create liquidity. But speculation must be based on transparent business activities, regulated by taxes, not on accumulating assets and then leaving them idle.

Furthermore, another risk warned by experts that makes tax policies difficult to implement is the phenomenon of registering properties under someone else's name. Many people own a large number of properties but divide them up so that relatives or acquaintances register them under their names to avoid being taxed. This poses a significant challenge in identifying the correct subjects that need to be regulated.

To prevent this situation, the land registry system, records, and maps must be standardized and interconnected. When information is connected, the management agency will be able to detect unusual transactions, identify the true owners, and curb tax evasion.

Source: Vietnam+

Source: https://baophutho.vn/go-nut-that-can-tro-doi-voi-chinh-sach-thue-bat-dong-san-244066.htm