Will the land brokerage profession be tightened by tax policy?
(Baonghean.vn) - In recent years, office leasing and real estate brokerage activities in the province have been bustling, but it is almost very difficult for the authorities to control. Therefore, along with perfecting the legal corridor, one of the requirements for the Tax sector is to urgently research to build and manage taxes corresponding to this type of business.
Management of converted houses for use as offices and warehouses
According to a survey result of the Provincial Police Fire Prevention and Fighting Police Department in June 2021, the whole province currently has nearly 20,000 houses living along both sides of the road converted to business or rented out for business, of which Vinh city has nearly 1,000 houses near the streets put into business.
Currently, due to the impact of the Covid-19 epidemic, housing renovation activities in the city have been suspended.office for rentquieter, but there are still inner-city streets where the rental price for housing locations used as offices and headquarters is still as expensive as hotcakes. It is possible to name the streets where the rental price will make many people startled. That is the rental price on Phan Boi Chau, Truong Chinh, Le Loi, Quang Trung, Tran Phu, Nguyen Thi Minh Khai, Le Hong Phong, Nguyen Van Cu, Cao Thang, Lenin - Xo Viet Nghe Tinh Avenue... (Vinh City), just 3-5m of street frontage costs tens of millions or more per month.
In particular, beautiful locations at the intersection of major streets that have been renovated by residents or businesses for banks or insurance companies to rent have prices ranging from 100 million to 250 million VND/month. Similarly, the land along National Highway 1A in Dien Chau, Quynh Luu districts, Hoang Mai town, National Highway 48 through Thai Hoa town, Quy Hop; National Highway 46 through Nam Dan, Thanh Chuong are always in high demand, with an average rental price of 5-7 million VND/month; if the land owner invests in building a private office for rent, the price will be higher.
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| A prime office location for rent on Xo Viet Nghe Tinh Avenue intersecting with Vinh - Cua Lo Avenue in Nghi Phu commune. Photo: Nguyen Hai |
Not only that, due to urban management requirements, recently, many inner-city streets have been banned from heavy-duty vehicles during rush hours, so the demand for renting warehouse space in the suburbs has also increased. Agencies, units and people in the suburbs of Vinh City such as Hung Loc, Nghi Phu, Quan Bau, Vinh Tan or Hung Chinh, Hung Loi, Hung Thinh, Hung Tay... near National Highway 1, National Highway 46 and Vinh bypass, if they have large land funds, have invested in renovating them into warehouses for rent. According to statistics, only a warehouse with an area of 1,000 - 2,000 m2Along both sides of the 72m road of Vinh – Cua Lo Boulevard or Lenin – Xo Viet Nghe Tinh Boulevard, National Highway 1A… the warehouse owners have tens of millions of dong each month.
Tighten land brokerage with tax policy
In addition to office and warehouse leasing activities, in recent years, real estate brokerage activities have also been quite active, bringing in large increases in revenue, but the State has not yet had a way to manage taxes for this activity. In our country in general and Nghe An in particular, real estate brokerage transactions, besides the floor by businesses, are mostly intermediaries by individuals, making it very difficult to manage and collect taxes when there are transfer transactions.
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| Infrastructure of a land auction area in Quynh Luong, Quynh Luu is normally only 3 million VND per square meter but now it has doubled. Photo: Nguyen Hai |
In fact, in recent years, land brokerage transactions have become a profession that brings income to many individuals. At land auctions in districts, there are individuals representing a floor who have purchased documents and bid to buy from 1/2 to 2/3 of the land lots that a district put up for auction. After winning the auction, instead of having to be the owner to fulfill financial obligations and use the land, these investors and brokers are willing to resell to local people with real needs at a price difference of 70-150 million VND/lot.
In terms of investment, production and business activities are difficult, savings interest rates are low, so people with idle money switch their investment channel to land. Currently, when transferring, in addition to the registration fee, income tax must be paid to the State, but in many cases, the price is not close to the market price, so the State cannot manage and regulate the difference and unusual income.
Based on the above situation, recently, representatives of the Tax Departments of Ho Chi Minh City and Hanoi proposed that the General Department of Taxation and the Ministry of Finance conduct a pilot study on tax calculation for the rental of houses for use as offices and business headquarters, accordingly, if the revenue is over 100 million VND/year or more, tax will be charged; proposed that the Ministry of Construction issue regulations restricting individuals from participating in land and real estate brokerage activities, and if they want to practice brokerage, they must have a practice certificate or establish a company or real estate trading floors; Bac Ninh, Bac Giang provinces... proposed to have regulations on tax calculation for people with land and property from the second apartment or plot of land onwards, and when the transfer is profitable, they must pay income tax.
