New Capital Gains Tax Hinders Real Estate Sales
Oct. 21 – Vietnam’s newly enforced 25 percent capital gains tax has affected demand in Ho Chi Minh City’s real estate market.
Beginning September 26, a real estate buyer wanting to transfer the right to own a property to another person will have to pay a 25 percent capital gains tax or a 2 percent tax on the transaction value says Thanh Nien News.
Nguyen Thanh Dat, director of Hung Hung Thinh Real Eastate Company, told Thanh Nien News that the new capital gains tax has led the number of transactions this month to drop by 80 percent compared to last month. Vietnam’s property developers usually source funding through advance payments made by buyers.
The capital gains tax rule is also considered confusing by buyers because various jurisdictions will interpret the new rule in a different way. While in District 1, a buyer can choose from the two options set above, in Nha Be District the rate is set on a case by case basis.
Some tax agencies have resorted to refusing transfer applications until further instructions from authorities.
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