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How will the apartment buyer pay the housing tax according to the proposal of Ministry of Finance?

The Ministry of Finance is drafting the Law on Property Tax, which proposed the taxation of houses and land for apartment. So, under this draft law, who will buy a flat will pay how much for housing tax, land?

Under the draft property tax law, apartment buyers will be required to pay two types of taxes: land tax and house tax.

Land tax shall be calculated according to the following formula: Tax amount = land area for tax calculation x price sale of 1 sqm of land subject to tax x tax rate.

The land area for tax calculation is the land area stated in the “red book” or the land allocation decision, the land lease decision, the land assignment contract or the land lease contract.

For land used for the construction of condominiums, the taxable area is determined as the area of ​​the apartment multiplied by the coefficient of determination of the land area for tax calculation.

The land area for tax calculation is the land area stated in the "red book" or the land allocation decision
The land area for tax calculation is the land area stated in the “red book” or the land allocation decision

Price sale of 1sqm of land for tax calculation is the price of 1m2 of land at the land price list announced by the provincial People’s Committee at the time of tax calculation.

The tax rate is currently proposed by the Ministry of Finance at 0.4%.

Take an example to imagine: Mr. A bought a 100sqm apartment on the 20th floor of a 50-storey building on Do Duc Duc street (Nam Tu Liem district, Hanoi). The location of the apartment building where Mr. A bought the apartment is identified as location 1 – land on the land price list issued by the People’s Committee of Hanoi in 2014 (for the period 2015 – 2019).

Thus, the area of ​​land tax calculation of Mr. A is: 100sqm x 0.2 = 20sqm

Price sale of 1sqm of residential land – location 1 in Do Duc Duc street according to Land price list of Hanoi is VND24 million.

At the tax rate of 0.4%, the payable tax amount of land A is: 20sqm x VND24 million / sqm x 0.4% = 192,000 dong.

In addition to the land tax as above, Mr. A will also have to pay additional tax.

House tax is calculated according to the formula: Tax amount = [(taxable area of ​​x square meter of taxable house) – taxable threshold] x tax rate.

In particular, the area of ​​tax calculation houses is the whole area of ​​houses used in accordance with the law on construction and the law on housing.

The tax rate is currently proposed by the Ministry of Finance at 0.4%.
The tax rate is currently proposed by the Ministry of Finance at 0.4%.

Price sale of 1sqm of tax house is the price of 1sqm new builders at each level, the house grade decided by the provincial People’s Committee in accordance with the law on construction at the time of tax calculation (price of 1m2 new builders built bases The investment capital of construction investment issued by the Ministry of Construction – Decision 706 / QD-BXD 2017).

The threshold not subject to tax is proposed by the Ministry of Finance is VND700 million. And the proposed tax rate is 0.4%.

In Mr. A’s case, the taxable area is 100sqm.

According to the Decision 706 / QD-BXD 2017, the price of 1m2 of taxable house is VND9.7 million/ sqm.

Determined, the price for calculating the tax of Mr. A’s house is: 100sqm x VND9.7 million/ sqm = VND970 million.

The threshold not subject to tax is proposed by the Ministry of Finance is VND700 million, so the taxable value is: 970 – 700 = VND270 million.

With the proposed tax rate of 0.4%, Mr. A’s tax amount payable is 270 x 0.4% = VND1.08 million.

Thus, in total, Mr. A will have to pay housing tax: 192 thousand dong + VND1.08 million = VND1.272 million per year.

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