ANTD.VN - Experts recommend applying a 20% tax on the difference between buying and selling real estate, instead of the current 2% on the transfer value.
Should the difference between buying and selling prices be taxed?
According to many experts, income from real estate transfers is currently one of the important sources of income in the personal income tax system, but taxation still has many limitations and shortcomings.
Associate Professor, Dr. Phan Huu Nghi, Deputy Director of the Institute of Banking and Finance, National Economics University, said that currently, personal income tax on income from real estate transfers is applied in two ways.
The first is a 2% tax on the transaction value, regardless of whether there is a profit or loss. And the second is a 20% tax on the difference between the buying price and the selling price.
According to the expert, although the 2% option on the transaction value is simple and easy to collect, it creates a big loophole in the declaration of selling prices. Sellers often declare a lower transfer price than the actual price to reduce the amount of tax payable. This not only causes a loss of revenue for the State budget but also makes the real estate market lack transparency.
On the contrary, the 20% tax on the difference between the purchase price and the sale price has the advantage of accurately reflecting the actual income. However, this method has difficulty in determining the correct purchase price, especially for real estate transactions that took place many years ago, when there was no transparent mechanism for managing purchase and sale prices as there is today.
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Experts say that the current real estate transfer tax is still inadequate. |
Associate Professor, Dr. Phan Huu Nghi said that to ensure fairness and limit tax evasion, a 20% tax should be applied on the difference between the purchase price and the sale price, similar to corporate income tax.
“Currently, tax authorities and the Ministry of Agriculture and Environment have full information on purchase and sale prices to calculate taxes. Therefore, controlling transfer prices is completely possible by comparing with actual data.
When buyers accept to declare a low price to avoid tax, when it comes time to resell, they will have difficulty recording a purchase price lower than the market price, which can lead to higher taxes payable in the resale transaction later, when the buyer does not agree to the two-price purchase (i.e. declaring a low price)" - he analyzed.
According to the expert, the 20% tax on the difference between the buying and selling prices should also be accompanied by strict penalties for false price declarations. Then, real estate transactions will become more transparent, limiting the situation of "two prices" (actual price and declared price), and at the same time helping the State collect taxes more fairly. The market being pushed up in price by brokers and roundabout buying and selling will be limited to the maximum.
“One of the important impacts of applying a 20% tax on actual profits is to help limit the situation of pushing up real estate prices. If the policy of taxing on added value is strictly applied, real estate companies will also have to calculate more carefully when deciding on selling prices, thereby helping the market operate more transparently and substantially,” said Associate Professor Dr. Phan Huu Nghi.
Similarly, Dr. Nguyen Ngoc Tu, Lecturer at Hanoi University of Business and Technology, said that calculating a 2% tax on the selling price can easily cause over-collection and is inconsistent with the nature of personal income tax, which is only levied on income, that is, revenue minus expenses of the taxpayer.
Proposal to impose annual property tax on real estate value
Expert Nguyen Tri Hieu, Director of the Institute for Research and Development of Global Financial and Real Estate Markets, said that in Vietnam, currently, real estate tax only stops at revenues such as non-agricultural land use tax, personal income tax from real estate transfer, and registration fees.
Meanwhile, developed countries such as the US, Canada, Japan and South Korea all apply annual property tax on real estate value, to ensure fairness in asset distribution and create sustainable revenue for the state budget.
According to the expert, the failure to effectively apply real estate tax in Vietnam has led to some notable consequences.
First, real estate speculation and hoarding are on the rise. When not subject to tax pressure, many individuals and organizations tend to invest in real estate for long-term holding instead of exploiting or trading. This contributes to the decline in the real housing supply to serve real housing needs, causing real estate prices to increase.
Second, the state budget misses out on an important source of revenue. When real estate is not subject to regular property tax, the state loses a stable, long-term source of revenue, while having to rely heavily on corporate income tax and value-added tax (VAT). This makes the tax system ineffective in regulating the economy.
Dr. Nguyen Tri Hieu said that real estate tax is considered an effective tool to control speculation, create a stable source of revenue for the budget and direct capital flows into economic activities instead of hoarding assets. However, implementation needs careful consideration to ensure it is consistent with market realities and socio-economic conditions at each point in time.
Taxing assets not only requires fairness in the tax system, but also requires a reasonable roadmap to avoid creating unwanted impacts, especially in the context of the market needing stability.
Source: https://www.anninhthudo.vn/thue-chuyen-nhuong-bat-dong-san-chuyen-gia-kien-nghi-danh-20-tren-chenh-lech-mua-ban-post606295.antd
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