When will abandoned million dollar villas be taxed?

Experts and lawyers say the time has come to build a reasonable real estate tax to help stabilize prices, make the market transparent, and limit abandoned real estate.

Abandoned villa for more than 10 years in an urban area in Thanh Tri district (Hanoi) - Photo: DANH KHANG

Need to adjust non-agricultural tax rates?

On March 24, speaking with Tuoi Tre Online , Dr. Nguyen Ngoc Tu, a tax expert, said that up to now, although there has been no regulation clearly stating "real estate tax", in reality there are some types of taxes levied on houses and land.

According to Mr. Tu, for example, land use fees (depending on the area), annual non-agricultural land tax rate (0.03%), personal income tax on real estate transfer (2%) and house and land registration fees (0.5%).

However, according to Mr. Tu, the cumulative tax rate is lower than the real estate tax of other countries. "In the immediate future, we need to adjust the annual non-agricultural tax rate because only 0.03% is too low," he said.

"We must determine that if there is a market, there will be speculation, although we must have tools for speculators to pay more taxes to the State than non-speculators, which is a matter worth discussing.

I support the tax method based on the limit, which means that users within the limit will be taxed at a low rate, while those who use beyond the limit will be taxed at a high rate. Then we will consider other methods to tax appropriately when we have a complete land database," Mr. Tu stated his opinion.

From 2022, Resolution No. 18 of the Party Central Committee has directed that it is necessary to "prescribe higher tax rates for people who use large areas of land, many houses, speculate on land, slow land use, leave land abandoned...".

Therefore, according to Mr. Tu, it is necessary to closely follow the orientation, have a specific roadmap and time to build a suitable real estate tax.

Rows of abandoned villas in Hoai Duc district (Hanoi) - Photo: QUANG THE

Mr. Tu added: "To build a reasonable real estate tax, policy makers must have a draft, scientific calculations, and effective application in practice.

Previously, there was a proposal that apartments from 50 million VND/ ^m2 or more would be subject to tax, but by now it is probably outdated because currently in Hanoi there are almost no new apartments for sale at prices below 50 million VND/ ^m2 , meaning that housing prices have increased too quickly.

First, we need to adjust the annual non-agricultural tax rate because 0.03% is too low. Then, we apply a tax rate according to the limit, so that people with many houses and lands will "happily" pay more tax to the State.

If we do not calculate appropriately to build a reasonable real estate tax, it will not only lose tax revenue, but also have the opposite effect of increasing housing prices. Applying appropriate taxes will help real estate return to its true value and no one will be foolish enough to abandon their land and house," Mr. Tu analyzed.

Learn from other countries but not mechanically

Lawyer Truong Anh Tu, chairman of TAT Law Firm, said that the real estate market in Hanoi is facing a paradox, with million-dollar villas and abandoned townhouses in the suburbs, while many young families are still struggling to find a place to settle down.

In particular, apartment prices have increased continuously over the past 1-2 years, making the supply of affordable housing increasingly scarce.

Lawyer Tu believes that it is necessary to develop a real estate tax to impose high taxes on abandoned real estate as economic experts have proposed, in order to increase the efficiency of land use. Especially those who own many real estates or land of great value, must pay high taxes.

" In Singapore, owners of second or more properties are subject to additional property tax of up to 20-30% of the transaction value (depending on the time), especially if they are foreigners or do not use the house for residential purposes.

Meanwhile, in France , the abandoned house tax is applied progressively according to the vacancy period, starting at 12.5% ​​of the estimated rental value and increasing to 25% from the second year onwards.

Vietnam can absolutely learn, but it should not be applied mechanically, but must be suitable to the market context and management capacity...", Mr. Tu analyzed.

Taxation to prevent "surfing"

Previously, speaking with Tuoi Tre Online , Associate Professor Dr. Dinh Trong Thinh, an economic expert, said that it is necessary to tax people who "surf" real estate.

"Targeting taxes will control prices because there are many properties and the higher the prices, the more taxes must be paid, which not everyone wants," said Mr. Thinh.

Professor Dang Hung Vo, a resource management expert, said that many countries have experimented with applying high transfer taxes in large cities, short ownership periods, and taxes on the annual increase in value of real estate.

To have reasonable taxes, it is necessary to carefully study the real estate market and learn more from the experiences of other countries.

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Source: https://tuoitre.vn/bao-gio-danh-thue-biet-thu-trieu-do-bo-hoang-20250324195303786.htm