General Director of Dat Xanh North: Taxes on the house is over 700 million, the state will lose extremely large

Mr. Vu Cuong Quyet, General Director of Dat Xanh Northern Real Estate and Services Joint Stock Company, said that the proposed tax on housing valued at over VND700 million is a harm to the state.

As VietnamFinance has informed, on April 13, the Ministry of Finance has information on the taxation of property for housing. Accordingly, the Ministry of Finance proposed to tax 0.4% for houses valued at over VND700 million. According to the draft, this will be the annual tax.

In an understandable way, it is possible to imagine a house valued at VND1.7 billion, which will have to pay a property tax at the rate of 0.4% for a value of VND1 billion a year. Thus, one year, the owner will have to pay 4 million. If the average life span of a condominium is 50 years, the total amount of the owner will be VND 200 million.

Mr. Vu Cuong Quyet, General Director of Dat Xanh Northern Real Estate

The proposed taxation of the Ministry of Finance is currently causing a stir of public opinion with many opinions, opposing views. From the perspective of business – real estate developer, General Director of Dat Xanh North, Vu Cuong Quyet said that the proposed tax on property over VND700 million is five issues.

One is the problem of determining the value of the home. According to Quyet, determining the exact value of a house is very difficult. When a sale occurs, the value of the house is determined, but over time, the value of the house has been altered. This difficulty inevitably leads to disputes between the administration and the people.

“For example, this year I buy a house worth VND1.5 billion but next year, it can increase or lower the price, but usually the apartment over time will be down a lot. This will create controversy between the authorities and the people, “he said.

The second problem is that taxing the home will offend people. “For the rich, filing a tax is not a problem, but with the middle class and low income, that would be a burden.

“The price of a house in Vietnam is already very high, and a young family who buys a house far from the center loses between VND1billion and VND1.5 billion, and they have to raise their children and cover their living expenses. The tax bill is heavy, “he decides.

Mr. Quyet also said that the tax will cause house prices to be raised. People are taxed when they buy a home, and when they sell, they will, inevitably, add tax value to the value of the home.

The price of the house will lead to the result that real estate investment is also affected. “Instead of trying to buy a house, people will rent light,” he said.

In particular, Mr. Quyet emphasized that taxing houses would create tax evasion problems.

“Example 2 individuals buying and selling a house for VND 10 billion, in order to evade taxes, the buyer and the seller will agree to notarize the lower price. Write down 2 billion. Thus, the buyer less property taxes, and the seller reduced income tax.

“It is difficult for me to understand why the Ministry of Finance is not thinking about this issue because it is a big problem and the state will lose huge taxes.” Write down the correct value of the house, they will write lower than the market price and at the same high as the state regulations, then the loss is extremely large.

“The state will not collect taxes on the total value, no personal income tax, and you get a few million a month of property taxes, what do you eat?” That is not to say that this also causes a lot of problems. I say all this is not harm to the state and not good, “he said.

Mr. Quyet said that if taxed, taxable people with large property value. “Taxes are worth tens of billion, for example, but tax base from 1 to 2 billion people suffering,” he said.

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