Paradox: People with income have to pay taxes but can buy social housing

Income of 15 million VND/month can buy social housing but still have to pay personal income tax

In fact, an individual with an income of 15 million VND/month must pay personal income tax if he/she has no dependents, because after deducting the family deduction of 11 million VND/month, the remaining taxable income of 4 million VND/month will be taxed at a rate of 5%.

However, according to Decree 100/2024/ND-CP, people with incomes below VND15 million/month are classified as low-income, eligible to buy social housing. This shows overlap and policy gaps, raising questions about the rationality of regulations in tax and housing support policies. Because a person is considered to have an income high enough to be subject to tax but is still classified as low-income when considering housing support policies.

Income of 15 million VND/month can buy social housing but still have to pay personal income tax (Illustration: KT)

Maintaining the family deduction of VND11 million/month while the cost of living is increasing has made personal income tax a burden for many workers. According to the General Statistics Office, from 2020 to 2024, the consumer price index (CPI) increased by more than 30%, meaning that workers' purchasing power has decreased significantly, but the family deduction has not been adjusted accordingly. This has led to a situation where many middle-income earners are also subject to tax, even though they are not able to save significantly after paying for living expenses.

According to Ms. Nguyen Thi Cuc, Chairwoman of the Tax Consulting Association, the current family deduction applied from 2020 is 11 million VND/month for taxpayers and 4.4 million VND/month for each dependent. However, after 4 years of application, this level is considered to be no longer suitable for the inflation rate and actual living costs.

Ms. Nguyen Thi Cuc, President of Tax Consulting Association

In addition, the conditions for determining dependents also need to be reconsidered. Currently, if a dependent has an income of more than 1 million VND/month, he/she is not eligible for deductions. This leads to an inconsistency: if a dependent has no income, he/she is eligible for a deduction of 4.4 million VND/month, but if he/she has an income of just over 1 million VND/month, he/she is not eligible for any deductions. This is an unreasonable point that needs to be adjusted to ensure fairness.

“It is necessary to study raising the family deduction level to a more reasonable level, consistent with the minimum wage, GDP per capita and consumer price index to ensure the lives of taxpayers before fulfilling tax obligations,” Ms. Cuc commented.

The Chairman of the Tax Consulting Association also said that it is necessary to review the tax rate structure and tax levels to ensure consistency with people's income and ability to pay, while avoiding creating too large a tax burden for workers.

“It is necessary to adjust the family deduction level in a more flexible way. The adjustment can be based on the inflation rate or average income level to ensure timeliness and reasonableness. In addition, it is necessary to clarify taxable and non-taxable income to ensure fairness among target groups,” said Ms. Nguyen Thi Cuc.

Need to loosen personal income conditions to buy social housing

In addition to tax shortcomings, social housing policies are also not without their unreasonable points. According to the Housing Law 2023 and Decree 100/2024/ND-CP, the condition for purchasing social housing is that the income does not exceed 15 million VND/month for single people and 30 million VND/month for households.

This means that an individual with an income of VND15 million/month will be subject to personal income tax and eligible for social housing policies, creating overlap and inconsistency in fiscal and social security policies.

According to Associate Professor, Dr. Dinh Trong Thinh, senior lecturer at the Academy of Finance, loosening income requirements to expand the number of people eligible to buy social housing is reasonable because current housing prices are too high, far exceeding the income of the majority of people. The proposed level of VND15 million/person/month may be to match the upcoming family deduction level that the Ministry of Finance will raise and amend the Personal Income Tax Law in 2026.

Assoc. Prof. Dr. Dinh Trong Thinh, senior lecturer, Academy of Finance

“It is difficult to raise the income threshold even higher because social housing is understood to be for low-income people, the State supports both investors and buyers. Therefore, the condition for those receiving support is below the threshold for paying personal income tax. When the income is above the taxable threshold, it cannot be called low income anymore,” said Associate Professor, Dr. Dinh Trong Thinh.

Associate Professor, Dr. Dinh Trong Thinh said that there should be research and surveys to calculate the living expenses of people in urban areas, even in each region, to adjust the family deduction level of taxpayers accordingly. The family deduction level can be adjusted according to the regional minimum wage, then the deduction level can be adjusted every year. From there, the conditions for buying social housing will also be more reasonable.

"If a person is taxed on income, they cannot be considered low-income at the same time. There needs to be a calculation to adjust the policy appropriately, ensuring fairness in resource allocation," Associate Professor, Dr. Dinh Trong Thinh expressed.

According to economists, the inconsistency in housing policy also increases the risk of policy exploitation. Some individuals may declare lower incomes than they actually have to qualify for social housing, while those who truly need support may miss out because they do not meet the income criteria. This not only distorts the market but also creates injustices in the allocation of social security policies.

In response to this issue, recently, in Official Dispatch 1892/VPCP-KTTH conveying the opinions of Prime Minister Pham Minh Chinh on information, press and public opinion related to the direction and management work, the Prime Minister directed the Ministry of Finance and the Ministry of Construction to study and consider adjusting regulations related to people with income paying taxes but being able to buy social housing. Thereby, adjusting policies on social housing and personal income tax.

To ensure that tax and housing policies are consistent, economic experts say that there needs to be close coordination between the Ministry of Finance and the Ministry of Construction in redefining the taxable income threshold and low-income criteria when considering social housing policies. This amendment not only helps eliminate policy conflicts, but also helps increase people's confidence in the tax system.