How do countries tax real estate?
(Baonghean.vn) - In many countries, depending on the house value and purpose of use, the tax rates are also different.
According to statistics, there are currently 174/193 countries in the world implementing property tax (annual tax, during the use of property). Property tax in each country is not completely the same.
Laos
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In Laos, with land tax, the Tax Department will classify the purpose of use (industrial, agricultural, commercial, etc.) and location (suburbs, inner city, etc.) to calculate the tax payable per square meter. This tax changes every year but is at a very low level.
For property tax on land such as housing and infrastructure, the VAT rate ranges from 0 - 24%, depending on the purpose of use such as residence, business or charity.
Cambodia
In Cambodia, every first quarter of the year, citizens receive tax payment notices from the Cambodian Tax Department.
The tax rate for all construction works, houses, high-rise buildings, etc. is 0.1% of the value of the work according to the assessment of a Real Estate Appraisal Council under the Tax Department.
This tax policy has been applied since 2010 and to date, the standard of living in this country has always been among the lowest in the world.
Korea
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In Korea, luxury housing is often taxed very highly. Land tax ranges from 0.2% to 0.5% for land and is applied at a rate of 4% for land used for golf courses and luxury resorts. For ordinary housing, the tax rate is 0.1% to 0.4%. Villas, golf course houses and luxury services are taxed at 0.4%, factories in residential areas are taxed at 0.5% but in areas with high population density, they can be taxed up to 250%. A tax rate of 0.25% is applied to buildings for other purposes.
In addition, land and houses with values exceeding the prescribed threshold must also pay real estate tax at a rate of 0.5% - 2%.
Taiwan
Similar to Korea, which separates taxes on land and houses, Taiwan also imposes a land tax of 0.2% to 5% depending on the type of land and area. As for house tax, the tax rate is 1.2% - 2% for condominiums; about 1.4% for private houses; and 3% - 5% for commercial buildings.
Brunei
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Meanwhile, Brunei, a wealthy country in Southeast Asia, does not tax land but only taxes houses (including commercial houses) at a rate of 12% of the value.
Philippines
The Philippines regulates taxable housing types including residential houses, business houses, residential land, land for construction works and charges 2% tax in Manila, 1% in other provinces.
Finland
The tax rate applied in Finland is 1.2% to 2%. However, for commercial, industrial and residential land exceeding 29,200 USD, the rate is 1.3 times higher.
In some countries, taxes are focused on second homes and subsequent homes, or unowned residential properties, to discourage real estate speculation.
Singapore
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In Singapore, residential properties priced below $8,000 enjoy zero tax. These are mainly one- and two-bedroom apartments. Property tax rates range from 4% to 16% of the value of the property or land above the threshold, with commercial and industrial properties at 10%. Vacant property tax ranges from 10% to 20%.
Canada
In Canada, the tax rate for a second home can be as high as 4%. Specifically, the city of Vancouver has a special tax policy for empty homes. According to regulations, homeowners are responsible for declaring which is their main home and which is an investment home.
Those who are late in paying the new tax will be subject to an additional 5% penalty, and those who fail to file a return will be automatically taxed. Additionally, intentionally misrepresenting the condition of a home can result in a fine of up to $10,000 CAD (nearly $7,500 USD) per day.
America
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In the United States, homeowners must pay local property taxes from the moment they own their home. Property taxes are determined by the states, with different tax rates in each state. Property values vary from state to state. For example, in some counties in New York State, the tax rate is more than 3%. This is also an area with high real estate prices, making the county's annual property tax rate among the highest. Meanwhile, in many areas, property tax rates are below 0.5%.
This tax in many localities is also the main source of revenue for the budget used to pay for schools, hospitals, parks, street lights, etc.
Older brother
In the UK, the tax rate varies depending on the value of the house. Second homes are taxed at a higher rate of 3%. The UK also imposes a 7.5% tax on properties that have been vacant for 2 years or more.