Brian Jeffrey
This effort is aimed at addressing the issues caused by speculative buyers who worsen the affordable housing crisis in the country.
According to reports from VARS, there’s a concerning rise in the number of abandoned houses and villas, especially in urban areas where land is limited.
This situation reveals a significant imbalance: while many properties sit unused, countless individuals find it difficult to secure housing, highlighting a major misallocation of resources that contributes to social inequality.
“The rich tend to accumulate properties, often leaving them empty, which disrupts the housing market and makes it harder for the general public to find affordable options,” noted VARS.
This trend not only wastes land but also disrupts the supply-demand balance, leading to higher prices and limited availability.
VARS advocates for taxation to begin on second home ownership. This approach would help stabilize the real estate market and ensure wealthier individuals contribute more to public funds.
Recent observations reveal that many property transactions involve individuals purchasing additional homes.
To tackle these challenges, VARS recommends a tiered taxation approach similar to those in Singapore and South Korea. In Singapore, extra charges increase with each property acquired, while South Korea imposes higher taxes on neglected properties to discourage speculative ownership and promote development.
However, implementing these taxes poses challenges. It requires strong administrative capabilities, which will necessitate significant investments in technology and personnel to effectively manage and enforce these new regulations.
Moreover, potential economic impacts, like diminished consumer spending power and possible legal loopholes for avoiding taxes, need to be thoroughly analyzed.
VARS recognizes the complexities: “The introduction of new policies will face hurdles, but the advantages of real estate taxation are expected to outweigh any drawbacks considerably.”
The push for tax reforms has received backing from various figures, including Phan Duc Hieu, a member of the Economic Committee of the National Assembly, who stressed the need for immediate action.
“Effective tax measures are crucial to align housing prices with genuine market realities. Postponing these reforms will only extend the current issues,” he stated.
As Vietnam advances and urbanizes, the execution of targeted tax strategies may be crucial for stabilizing the housing market and fostering fair economic development.
The ongoing discussion continues to draw attention to how these proposed changes will impact the housing situation in Vietnam.
