Property Tax is levied on persons who are capable of paying tax

	Many opinions agree with the draft Law on property tax
	Social housing is subject to property tax exemption
	Countries levy Property Tax to limit speculation

Photo: Nguyen Thi Hien

At the seminar “Property Tax and some policies for Vietnam” held on 26th June, Ms. Le Thi Mai Lien, National Institute for Finance said that the Property Tax has been applied in many countries with many different names and forms such as: Real Estate Tax, Property Transfer Tax, Property Registration Tax, Inheritance Tax and Gift Tax.

“In general, almost all countries do not issue any specific Property Tax covering all taxes related to property as well as not having any unified bracket on Property Tax. In developing countries, the mobilization rate of State budget from the Property Tax levied on real estate tends to be lower than developed countries and does not fluctuate periodically,” Ms. Lien said.

From the experience of other countries, the representative of National Institute for Finance said that the Property Tax levy is completely reasonable and consistent with the international practice. However, Property Tax should only be levied on house and land (replacing Agricultural Land Use Tax and Non-agricultural Land Use Tax, and supplementing Tax levied on house). It needs to exempt and reduce tax for house and land which are public property; house and land used for religious purposes, public welfare and etc.

Ms. Lien has also recommended that the Tax levy on properties and other revenue from property (Registration fee, land use right transfer tax and etc) need to be maintained in accordance with current regulations. For taxpayers, it needs to stipulate the thresholds of taxable area for house and land (exceeding a certain threshold must pay tax).

“The Property Tax should provide a tax rate bracket, basing on this bracket to assign localities to stipulate the tax rate in accordance with their development. It needs to provide tax rate in accordance with land use purposes to ensure the economical and effective land use, at the same time, ensuring the priority for each field in each period. Especially, it should apply accumulative tax to reallocate and ensure the transparency vertically”.

At the seminar, the lawyer Truong Thanh Duc, Chairman of Basico Law Firm said that in many countries, almost all people are house renters and the remaining people are house owners who have huge financial capacity. However, in Vietnam, people who do not have high income still have a house, even low-income people.

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With the proposed tax rate of 0,4 % on house and 0.4% on land in the draft Property Tax Law, Lawyer Truong Thanh Duc said that it should provide a lower rate, maybe 0.1%, and it should develop a roadmap to gradually increase after 10 years. Along with that, it needs to issue accumulative tariffs which can be at least 10 times higher than the starting rate for people who have a lot of properties. For example, the lowest tax rate is 0.1% and the tax rate for people with a lot of properties must be 10%.

According to Mr. Duc , if levying tax on property, it needs to consider all properties, then classify them. “Property Tax is only levied on persons who are capable of paying tax and exempt for the poor. In addition, only levying tax on some properties with high value and applying accumulative tax at a low starting rate and accumulating with house and land ownership.