The application of property tax which is mentioned in the Tax Reform Strategy toward 2020 is still discussed and established. The study and development of the property tax law are very necessary to institutionalize the policy of the tax on property and establish the synchronous tax policy in accordance with international practices, stabilizing the real estate market and restricting the speculation and wasteful use of real estate.
Having no specific property tax law, Vietnam’s current taxes related to property have not yet fulfilled its role as one of the stable sources of revenue for the state budget. Vietnam’s revenue from land use tax currently accounts for only about 0.03% of Gross Domestic Product (GDP) and about 0.15% of total state budget.
Real estate experts highly agree with the second home tax policy. Former Deputy Minister of Natural Sources and Environment Dang Hung Vo said that Vietnam should have thought of this policy earlier. Also, the land use tax should be raised in urban areas in order to increase the budget to reinvest as well as construct more modern infrastructure in other rural areas.
However, chairman of Ho Chi Minh City Real Estate Association Le Hoang Chau said that the government should comprehensively study the new policy as it is difficult to clarify the third home and avoid unfairness in imposing property tax in terms of house sizes.