Will there be a tax on people who own two or more properties?

The Ministry of Finance has just completed a special report on tax policy for real estate, including a proposal to tax people who own two or more houses or lands.

While many rich people and real estate businesses are worried, most economic experts believe that this proposal is appropriate to limit real estate speculation and increase budget revenue.

The rich are worried

Mr. Nguyen Van Hai (Thanh Xuan - Hanoi) is planning to buy another apartment for rent. The proposed high tax on second homes and more makes him quite worried. "We already have to pay many types of taxes such as personal income tax, extraordinary income tax and many other types of taxes. If we have to pay more taxes for owning more real estate, it will be a tax on top of tax" - Mr. Hai worries.

Anxiety is a common feeling among many wealthy people who want to own a lot of real estate. The proposal to tax people who own a lot of real estate is also expected to have a big impact on this recovering market.

Lawyer Dr. Bui Quang Tin admitted that if this proposal is approved, there will be a situation of double taxation. However, this proposal is in line with international practice and ensures tax fairness. "People with a lot of assets and income will certainly have to pay more taxes than the poor, contributing to the State budget," said Mr. Tin.

Sharing the same view, Dr. Nguyen Tri Hieu said that in developed countries, the first house is a house for living, the Government supports, but the second house is usually for business or investment and will be taxed. For example, in the US, the Government supports the first house buyer by not taxing the income used to pay interest to banks. With the second house, all income used to pay interest to banks is taxed like all other income.

General Secretary of the Hanoi Real Estate Brokerage Association Nguyen Van Dinh also said that in other countries, taxing second homes is normal with two purposes: limiting speculation and ensuring the humanity of society. Mr. Dinh analyzed that this tax also aims to balance the rich and the poor, those with excess houses and those without houses. Specifically, tax revenue from those with many houses can be used to support those without houses. That is the humanity of society.

Limit speculation, increase budget revenue

According to a special report on real estate tax policy recently published by the Ministry of Finance, in terms of market regulation role, the non-agricultural land use tax applied since 2012 in Vietnam is not large enough to limit the artificial scarcity of supply in the real estate market.

The representative of the Ministry of Finance said that the real estate market is expected to develop more stably and sustainably in the coming time when a series of new related policies take effect; Vietnam's per capita income has continuously increased in recent years, people's holding, ownership and investment in real estate tends to increase. Therefore, in order to have a synchronous tax policy system, in line with international practices, contributing to stabilizing the market, limiting speculation and wasteful use of real estate, it is necessary to study and develop the Law on Property Tax.

Illustration photo.

Former Deputy Minister of Natural Resources and Environment Dang Hung Vo said that he agreed with the view of the Ministry of Finance that it is necessary to study and promulgate a separate law on Property Tax. When taxing second real estate assets, the market will be more stable, land speculation will decrease, and the poor will have more opportunities to own real estate. Mr. Vo analyzed that anyone with money can still own real estate but must pay taxes. The law does not prevent property ownership but must be fair. People who buy two houses must pay taxes.

“This will both increase revenue and regulate the market. This will make anyone who intends to speculate reconsider, reducing the real estate bubble,” Mr. Vo emphasized.

According to Urban Economics