Remove property tax threshold for houses worth 700 million VND
The drafting committee of the Property Tax Law said it has removed the VND700 million house tax threshold from the draft, but has not yet finalized the tax based on market price, construction price or area.
Ms. Le Thi Mai Lien, a member of the research team developing the Property Tax Law project, Institute of Strategy and Financial Policy (Ministry of Finance) said that the drafting committee has accepted many revisions and is expected to submit a new draft in August.
"The tax threshold for houses has not yet been finalized, whether it will be based on market value or construction value, or area, but houses with construction value of over 700 million VND have been eliminated and are no longer mentioned in the content of the Property Tax Law project," Ms. Lien emphasized.
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In some countries such as Korea, Thailand, Indonesia, South Africa, etc., according to Ms. Lien, property tax is levied based on the market value of the property and the valuation cycle, the taxable value is usually stable for 3-5 years.
Many countries apply a proportional tax rate, applying a uniform tax rate to both houses and land. Like the Philippines, Thailand has a progressive tax schedule based on the value of the house, land and actual use to ensure that land is used efficiently.
From international experience, Ms. Lien suggested that if only taxes are levied on houses and land (replacing agricultural land use tax and non-agricultural land use tax, adding tax on houses), "we should build a Law on Real Estate Tax to replace Property Tax.
Ms. Lien proposed that tax thresholds for houses and land should be regulated, meaning that only those exceeding the prescribed threshold will have to pay tax, and only a framework should be regulated, after which localities will set their own tax rates appropriate to their socio-economic development level and budget capacity.
At the same time, according to Ms. Lien, this law should also have tax rates that differentiate according to land use purposes and be progressive, meaning that the more houses and land you own, the more tax you have to pay, in order to ensure economical and effective land use.
Previously, last March, the Ministry of Finance held a press conference to announce a proposal to study the Property Tax Law project with the proposal to tax houses with a construction value of 700 million VND, with a tax rate of 0.3 - 0.4%.
In addition to taxes on houses and land, the Ministry of Finance also recommends collecting taxes on cars worth over 1.5 billion VND.
The above proposal of the Ministry of Finance has encountered strong reactions from public opinion, with many opinions saying that this policy is tax on tax, over-taxation, affecting the poor...