Does taxing people who own multiple homes and land reduce housing prices?

In a report sent to the Government Office , the Ministry of Construction proposed a tax policy for those who own and use multiple houses and lands to limit speculation and short-term buying and selling for profit. Deputy Minister of Finance Nguyen Duc Chi also expressed his agreement with this proposal, emphasizing that it is worth considering and studying.

This is not the first time that a proposal to tax people who own multiple houses and lands has been raised. A few years ago, similar ideas appeared in the market to "cool down" the real estate market in the context of rapidly increasing housing prices in big cities.

Experts have raised many concerns about the proposal to tax people who own many houses and lands at this time (Photo: Trinh Nguyen).

Associate Professor Dr. Dinh Trong Thinh - economic expert - said that tax is a regulatory tool in a market economy. However, taxing to reduce housing prices is not effective, the important issue to do is to increase product supply.

"In the context of scarce housing supply, if we add real estate tax, housing prices will increase. Therefore, the most important measure to reduce housing prices is to increase supply," Mr. Thinh said.

He recommended that in the process of considering the use of tax tools for real estate, it is necessary to carefully evaluate and consider based on appropriate factors. From there, the tax tool can be used for the right purpose.

According to real estate expert Tran Khanh Quang, we should carefully consider taxing real estate for people with many houses and lands. Economic theory is that taxing will limit product ownership and each person will be able to use good products. However, in reality, real estate is a unique product that everyone wants and needs to own.

Therefore, according to Mr. Quang, taxing people with many real estate properties will unintentionally affect the end consumers. Taxes and fees will weigh heavily on those who are trying to save to own a house. House prices will not tend to decrease, so the opportunity for end consumers to own a house will be further away.

Lawyer Tran Minh Cuong - Director of TMC Lawyers Law Firm - believes that building a regulatory mechanism through tax tools needs to be flexible, reasonable, not copying formulas from other countries and needs to ensure social fairness.

According to him, in order to impose taxes, there needs to be a national database on land in a synchronous manner, so that departments, branches and sectors can connect in checking the number of houses and land owned by each individual. In addition, it is necessary to control real estate transactions through banks, trading floors, and even cash to be able to accurately capture data. According to this lawyer, taxing cannot be implemented immediately, because it will affect the psychology of investors and the market.

Dr. Dinh The Hien - Director of the Institute of Informatics and Applied Economics - acknowledged that taxes create an important source of budget revenue to ensure social security issues and national interests. However, how to pay taxes depends on the development of each country, depending on the characteristics of the market, there should be appropriate adjustments, should not be applied mechanically.

He said that in the context of the real estate market needing good information to recover, it is necessary to temporarily stop implementing policies that cause psychological instability. The State needs to focus on stabilizing the market, creating transparency, and building trust with the people. The Ministry of Finance, the Ministry of Natural Resources and Environment, and the Ministry of Construction need to ensure policies on planning management, project licensing, land use fees, etc. so that the market can operate more smoothly.

Sharing this view, Mr. Vo Hong Thang - Deputy General Director of DKRA Group - said that there should be no tax imposed on people who own many houses and lands at this time. From a macro perspective, the real estate market is facing difficulties, low liquidity, limited supply, and investor sentiment is disturbed. If taxes are imposed at this time, the market could freeze, making it very difficult.

Source: https://dantri.com.vn/bat-dong-san/danh-thue-nguoi-so-huu-nhieu-nha-dat-co-lam-gia-nha-giam-20240930150121287.htm