Revisions to Real Estate Tax Policies Proposed

The Ministry of Construction is advocating for changes to the tax regulations concerning real estate transactions. This initiative aims to minimize speculation and deter quick profit-driven property trading. The Ministry of Finance has shown its support for these revisions.

This announcement was made by Vuong Duy Dung, Deputy Director of the Housing and Real Estate Market Management Department, during a press event held on October 17, 2024.

The intended tax changes would target individuals who hold multiple properties, aiming to reduce speculative activities and the trend of short-term trading for profit. This proposal emerges against a backdrop of soaring real estate and housing costs noted since the year’s start.

Surveys from significant urban centers like Hanoi and Ho Chi Minh City indicate that apartment prices surged by 5-6.5% during Q2 and climbed by 25% compared to the previous year, varying by location, as reported by the Ministry of Construction.

Dung pointed out that the ministry recently delivered an analysis concerning housing price dynamics, price trends, and potential strategies for market stabilization. This study highlighted various contributors to price increases, notably rising input costs linked to land use fees and labor.

Despite a slight increase in the real estate supply in Q3 due to new regulations, the overall availability remains low, exacerbating price fluctuations in recent times.

Moreover, a ministry representative discussed how market manipulation by speculators and brokers has played a part in escalating housing prices through artificial inflation and misinformation.

In light of the ongoing property price surge in Hanoi, Deputy Minister Nguyen Viet Hung pointed out that speculation paired with the public’s buying mindset significantly impacts pricing.

“The speculative approach can raise housing prices to excessive levels, particularly when coupled with the trend of waiting for prices to escalate. This has been a primary influence on the increasing housing market in Hanoi recently,” explained the Deputy Minister.

To promote a more stable real estate sector, the Ministry of Construction has put forth several recommendations, including the modification of tax regulations related to property transactions to prevent speculation and transient buying for profit.

“This proposal has garnered backing from the Ministry of Finance and other stakeholders. Nonetheless, it is crucial to comprehensively evaluate the policy’s repercussions on all parties involved. In-depth studies should be conducted to understand the full impact on businesses, residents, buyers, and sellers. The aim is to mitigate speculative actions while ensuring compatibility with global standards and the unique context of Vietnam, avoiding adverse effects on the larger market and transaction dynamics,” Dung remarked.

Furthermore, the ministry stressed the necessity of revising local land pricing structures in accordance with the Land Law 2024 to avert negative market consequences and protect the rights of both investors and residents.

The ministry is also planning to enhance oversight of real estate operations, encompassing businesses, investors, trading platforms, and brokers. This initiative seeks to ensure that all real estate dealings occur within state-supervised frameworks, promoting market transparency.

Deputy Minister Nguyen Viet Hung reiterated the urgency of developing strategies that stabilize consumer confidence.

“To successfully stabilize the real estate market and secure sustainable progress, we must implement a holistic approach addressing land, housing, fiscal, and investment policies,” the Deputy Minister concluded.