Tax policies for property sector must be carefully studied: finance ministry

The Ministry of Finance said that it was necessary to give careful consideration to any tax policies on the real estate sector. - VNA/VNS Photo Tran Tinh

This was the ministry’s response to a proposal from the HCM City Real Estate Association that the Government should tax the conversion of agricultural and non-agricultural land to residential land at a rate of about 15-20 per cent.

The association said it was necessary to tax the conversion of land-use purposes, which would help increase State budget revenue.

The proposal was raised in the context of land price fever which has occurred in many localities recently and was attributed partly to speculation.

The finance ministry said the current tax policy system covering the real estate sector was quite adequate, including the taxes and agricultural land use, non-agricultural land use, income tax on transactions of property assets, registration fee and other fees.

The established tax collection policies fully covered the process of forming, owning, using and transferring real estate assets and encouraged organisations and individuals to use property assets with efficiency and contributed to limiting speculation and preventing wasteful use of land, it said.

Still, it was necessary to continue improving the tax policy system on the real estate sector, the ministry said, adding that the property sector was very huge and influential on the economy and required the participation and contribution of many ministries, agencies and localities in making policies.

The finance ministry stressed that careful consideration and evaluation must be given to making policies for the real estate sector before submission to authorities for issuance at appropriate times to ensure feasibility and high consensus as well as contributing to limiting speculation.

The Ministry of Finance is studying international experience in taxing the real estate sector and identifying problems in the tax policy enforcement for amendments as part of efforts to implement the tax policy system reform strategy in 2021-30.