Monday , January 30 2023

Ministry mulls higher tax on short-term property transactions to check speculation

The Ministry of Justice is considering higher tax rates on short-term property transactions to combat speculation.

The ministry proposes that higher tax rates should be imposed if someone sells a property after owning it for a short period of time in the hope of warding off real estate bubbles.

When the property market is strong, speculators often buy and sell land, houses and apartments within months, weeks or even days.

Currently the tax on sale of property is 2% of the value, but experts have called for imposing higher rates on short-term transactions, which destabilize the market.

Last year, property liquidity was low in all segments, and so speculative activities ceased almost completely.

Late last year, HCMC authorities proposed taxing second properties to prevent speculation and abandonment of properties, which is tantamount to wasting resources.

In a draft proposal, the municipal government said its income could be increased by collecting taxes on land use and property ownership from people who own more than one piece of real estate.

Taxing second homes is a common practice in many other countries but not Vietnam.

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