Many experts believe that with the application of the new personal income tax policy as drafted by the Ministry of Finance for comments, real estate speculation will run out of room to survive - Photo: Q.DINH
Applying a 20% tax on actual profits from real estate transfers or applying a progressive tax rate based on holding time if the purchase price and costs cannot be determined, according to experts, will help limit real estate "surfing" investment activities.
In the draft Law on Personal Income Tax (PIT - replacement) being put out for comments, the Ministry of Finance proposes to apply personal income tax to real estate transfers by individuals by multiplying taxable income by the tax rate of 20% for each transfer. This taxable income is determined by the selling price minus the purchase price and reasonable expenses related to generating income from real estate transfers.
What is an "acceptable" real estate transfer tax rate?
In case the purchase price and related costs are not determined, personal income tax is calculated by multiplying the selling price by the tax rate. The tax rate in this case will be calculated according to the ownership period with a maximum of 10% of the selling price.
Specifically, the tax rate is 10%/sale price for real estate with holding period of less than 2 years. The tax rate is 6%/sale price for real estate with holding period of 2-5 years.
Tax rate is 4%/sale price for real estate held for 5 - 10 years... For real estate held for 10 years or more and real estate derived from inheritance, the tax rate is 2%/sale price. For real estate derived from inheritance, the holding period is not calculated, but the transfer will be subject to a tax rate of 2%/sale price.
The real estate holding period is calculated from the time the individual has the right to own and use the real estate (from the effective date of the Law on Personal Income Tax) to the time of transfer. For real estate originating from inheritance, the transfer tax rate remains the same as current, at 2% of the selling price, regardless of the holding period.
Speaking with Tuoi Tre , Mr. Tran Khanh Quang, director of Viet An Hoa Real Estate Investment Joint Stock Company, said that the personal income tax rate of 20% on real estate transfer profits is an acceptable tax rate.
According to Mr. Quang, paying tax on profits after deducting expenses will not have a big impact on investment activities, and at the same time help make the market more transparent.
"If this tax rate is applied, the buyers and sellers will have to correctly and fully calculate the actual costs incurred such as purchase price, interest costs, brokerage costs or renovation and repair costs... to be included in the valid costs that are excluded before calculating tax," said Mr. Quang, but he believes that the tax rate of 2-10%/sale price according to the holding period needs to clarify the applicable principles.
Need to clarify regulations on determining input costs
The draft also stipulates that in cases where the purchase price and costs cannot be determined, the tax calculation will be based on the holding period. Meanwhile, the holding period is defined as the period of time that the law refers to when an individual has the right to own and use the real estate from the effective date of the law (for example, from January 1, 2026) to the time of transfer, i.e., not retroactive, not calculated before the effective date of the replacement law.
"If the time is applied as above, there will be many things to clarify because the transactions basically clearly show the costs, purchase price... The selling price is clear, so the drafting agency needs to state more specifically the cases to determine if the tax rate is applied according to the holding time," said Mr. Quang.
Meanwhile, Mr. Dinh Minh Tuan, director of the southern region of Batdongsan, said the proposal to increase taxes according to the holding period, with the highest rate up to 10%, 5 times higher than the current rate, will cause many impacts.
A recent survey by this company showed that 59% of respondents said they bought real estate mainly for investment purposes rather than for living purposes, and a large proportion of those who own real estate intend to sell within the next year.
This shows that Vietnamese people really like to invest in real estate, but the holding period is short, they tend to "sell when the price is right", flexibly shifting capital flow to other more profitable assets at each time.
Therefore, the proposal to tax according to holding time will tighten the grip on short-term players, directly hitting short-term investors and "surfers", who account for a large proportion of market demand.
"This is a move that clearly demonstrates the goal of "rewarding those who keep and punishing those who sell quickly", but at the same time it also raises many concerns about the timeliness and spillover effects in the context of the market not yet recovering," Mr. Tuan raised the issue.
Many small investors will be eliminated from the market.
According to real estate experts, the application of tax rates based on holding time, the land and high-end apartment segments are the first to be affected by investors who often "surf" within 6 - 18 months to maximize profits, so the tax rate of 10% is applied.
"With this tax rate, the profit margin of short-term investors will be significantly eroded, reducing investment attractiveness, and many small investors will be eliminated from the game," an expert commented.
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Source: https://tuoitre.vn/siet-dau-tu-luot-song-bat-dong-san-20250722081425817.htm
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