Ministry of Finance proposes to tax property for the house over VND700 million

Houses worth over VND700 million or over VND1 billion will be subject to property tax at the rate of 0.3-0.4%. This is the proposal of the Ministry of Finance was launched at the press conference announced the draft law on property tax on April 13.

Specifically, at the press conference, the Ministry of Finance has proposed two options for the threshold not subject to tax is VND700 million or VND1 billion.

Pham Dinh Thi, Director General of Tax Policy Department under the Ministry of Finance, said that according to the national housing development strategy up to 2020 and vision to 2030, The average house area in 2020 is 25sqm per person. Therefore, if the average household is 4 people, the average area for a household is about 100 m2.

Will houses worth over VND700 million be taxed?

Will houses worth over VND700 million be taxed?

According to the law on construction, the average investment capital for housing construction is about VND 7.3 million / sqm. At that time, the new construction value of the 100 m2 house was about VND730 million. Therefore, the Ministry of Finance taking the threshold not subject to tax is VND700 million or VND1 billion.

Explaining the reasons for not using the area but using the value for tax purposes, the Ministry of Finance said that the use of the tax disadvantage area will be regulated for both home users with small value, simple house , houses in rural areas. Meanwhile, large value-for-money housing is in the non-taxable area.

More concrete evidence for this, the Ministry of Finance calculated that if the non-tax threshold of 100sqm is applied, there will be nearly 1.9 million semi-solid, semi-permanent, simple houses ( more than 1.1 million in rural areas) are subject to tax.

Meanwhile, the application of non-taxable thresholds assures the objective of property tax, unregulated homeowners are valued below the threshold not subject to tax, highly regulated for large value houses, Ensure social justice.

The Ministry of Finance issues two tax rates of 0.3% and 0.4%. At the same time, owners will have to pay 0.3% to 0.4% on the land.

With a tax rate of 0.3%, the ministry estimates that the tax revenue will be about VND22,700 billion, if applied to houses valued at over VND1 billion or VND23,300 billion if applied at VND700 million.

For the tax rate of 0.4%, the revenue is expected to be VND 30,300 billion and VND 31,000 billion, respectively.

Of this amount, the tax from home is 700 billion, the rest is still largely land tax.

With all these options, the Ministry of Finance proposed to implement the tax rate of 0.4% and applied the threshold not subject to tax for the house is 700 million.

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