Those with second homes should incur an additional property tax.
More calls have been made to introduce higher taxes on property. This time the plea has been made by the Ho Chi Minh City’s People’s Committee to the Ministry of Construction. They have requested for a higher tax band to be applicable for any property owner who owns in excess of one property. The aim is to create a more level equality playing ground for home ownership. This suggestion would also raise more funds for the country.
This proposal has been supported by the Ho Chi Minh City Real Estate Association. They said its introduction would help to starve of speculation that can often push up prices at the peril of those purchasing property for their own use. It has been suggested the need for the government to play their role too. For example if a bubble is on the horizon they should make moves to reduce this by introducing taxes to stop speculative purchasing and selling.
Currently there are no property taxes in Vietnam. However there are some taxes related to agricultural and non-agricultural land use. These have however not generated significant income for the state. As the property market has gained significant traction of late the average house transactions have increased too. According to figures the amount was USD 1,400 in 2013 and three years later this has jumped to USD 2,200. Thus creating a window of opportunity for tax generation.
Simultaneously GDP has risen from VND 22.7 trillion in 2006 to VND 88 trillion in 2015. Vietnam’s property market therefore has attracted international interest and foreign direct investment has ramped up. Additionally there has been a huge rise of those working in the industry. Over a ten year period from 2006 just shy of 4,000 new real estate businesses have been established. This demonstrates the sheer numbers involved within property and the potential for tax revenue.