New Tax Cramps HCM City Property Market
A 25% personal income tax (PIT) on property transactions effective from late Sept has hit Ho Chi Minh City property market, with the number of transactions dropping by up to 80% over a month.
Some real estate trading floors in districts 2 and 7 said 90% of their clients still wondered whether they have to pay PIT or not. Confusion over the exact nature of the new tax is still rife causing many to question just how it affects them and what they have to pay.
Nguyen Xuan Loc, the deputy director of Vinaland, said the number of transactions on his trading floor has decreased by 60%, blaming the business slowdown on the new capital gains tax.
Loc added that people go the trading floor these days mostly to listen to the news and learn more about real estate projects rather than making transactions.
Property developers in Vietnam are allowed to raise funds from their buyers to build their projects. In fact almost all new residential projects are funded with buyers’ advances.
But starting Sept 28, if a buyer wants to transfer the right to own a property in the future to another person, the capital gains from the transfer will be subject to a tax rate of 25%. If it is impossible to calculate the taxable income, a 2%tax of the value of the transaction will be imposed. (VnExpress)
Vietnamese
