Those who rent or buy a home for personal use will be at a disadvantage.

Taxing second properties: Renters or homebuyers will be at a disadvantage.

From an insider's perspective, if a tax on second properties is implemented, housing prices could continue to rise in the long term.

The Ministry of Construction recently proposed taxing second properties to lower housing prices. Photo: Thanh Vu

Rental prices and selling prices are both going up.

After years of saving, Ms. Mai Huong bought another single-story house on Bui Xuong Trach Street (Thanh Xuan District, Hanoi ). She intended this property as an "investment" for her children. However, to earn extra income, she is now renting the entire house to students for 2.9 million VND per month.

“Although my family owns two houses, we are not considered well-off. The small house on Bui Xuong Trach Street is the result of decades of saving by both my husband and me. Now, hearing about the proposal to tax second properties, I am very worried,” Ms. Huong lamented.

Frankly, Ms. Huong stated that if she were to be taxed, she would be forced to increase rent to cover the costs. On average, after two years, she increased rent by more than 400,000 VND per month. However, now the increase could be higher, and the rent adjustment cycle will be shorter.

"With Hanoi tightening fire safety regulations, many landlords have had to spend extra money installing equipment. These costs are directly factored into monthly rent, increasing it by 10 to 20%. Therefore, if there are any fluctuations that increase capital costs, landlords will always pass that directly onto the rent," Ms. Huong said.

Speaking with a reporter from Investment Newspaper, Mr. Hai Nam, a seasoned investor in residential real estate in Hanoi, confidently asserted that he is not worried about the taxation of second properties. If this were to actually happen, he would simply increase the price of his house/land to compensate for the capital loss, and the rest would be decided by the market.

“For properties in prime locations, the demand for both residential and investment purposes is always very high. Look at the apartment market over the past 5-6 years; many apartments in the capital have doubled in price, but liquidity remains very good. Therefore, even when real estate prices are inflated due to taxes, buyers continue to buy, and sellers continue to sell,” Mr. Nam said.

Furthermore, this investor predicted that if the tax is implemented, the real estate industry will be unstable in the initial period. However, as the market gradually adapts to the policy, speculators may find ways to circumvent the tax, such as having relatives register the property in their names, declaring transaction prices lower than the actual value, etc.

Taxes will be incorporated into the price of houses.

Speaking with a reporter from Investment Newspaper, Mr. Tran Vu, Business Director of DHCONS Construction Joint Stock Company, said that if the policy of taxing second real estate is implemented, genuine homebuyers or renters will be the ones most disadvantaged, rather than individuals investing or speculating.

“In Hoa Cuong residential area ( Da Nang ), rental prices two years ago were only about 2-2.5 million VND/month, but now they have increased to 3-3.5 million VND/month. Despite this, the occupancy rate remains at 100% due to the overwhelming demand for housing. That's just Da Nang, not to mention Hanoi or Ho Chi Minh City,” Mr. Tran Vu cited as an example.

The Ministry of Finance asserted that the goal of curbing speculation and stabilizing the market would be difficult to achieve solely through taxation. Instead, the policy system needs to be synchronized across regulations concerning land, planning, and other areas.

Based on the above example, the Director of DHCONS argued that, even if property owners increase selling/renting prices to cover costs, workers still have to "grit their teeth" and accept the new price level, especially in central areas.

“Many families might move to suburban areas to save on costs. However, they can't bear the thought of their children having to travel far to school. That's why I say that those who ultimately buy/rent homes are the most vulnerable group if a second property tax is imposed,” Mr. Vu Tran confided.

Sharing more about the real estate tax issue, Mr. Le Xuan Nga, General Director of BHS Property, commented that this regulation may cool down the real estate market in the apartment segment in the short term. However, just as the housing price problem is beginning to be addressed, the market may face new difficulties.

"The market as a whole still has many segments that are quite sluggish and are only gradually showing signs of liquidity recovery. If a tax on second properties is implemented, the market will immediately overreact and shift in a negative direction. This will make the already weak real estate industry even weaker," Mr. Le Xuan Nga assessed the situation.

Furthermore, in the long term, Mr. Nga believes that the residential segment will become even more sought after because it can generate a steady stream of cash flow for investors, thereby offsetting the tax burden. On the other hand, the land plot segment may lose its attractiveness due to its inability to optimize long-term profits.

Regarding the issue of real estate prices after the tax is imposed, the General Director of BHS Property stated that this variable can only be explained by the law of supply and demand. This is a category that even tax policies find difficult to profoundly impact.

Source: https://baodautu.vn/batdongsan/danh-thue-bat-dong-san-thu-hai-nguoi-di-thue-hoac-mua-nha-o-thuc-se-chiu-thiet-d226524.html