He said that Vietnam needs to take comprehensive measures to prevent real estate speculation, considered the main ‘culprit’ in distorting the market and pushing prices up to abnormally high levels, rather than relying solely on the housing tax law.

According to Thi, Vietnam’s real estate market is still a fledgling market and operating in an unprofessional manner. Moreover, the unsuitable housing taxation stipulated in the currently valid Housing Taxation Ordinance is also a reason for speculation as is the lack of transparency of the real estate market.

The housing tax law, if enacted, will only be able to help restrict speculation, while the law alone will not be able to stop speculation.

He said that one of the most important targets of the housing tax law is to make real estate transactions transparent, thereby making the real estate market healthier.

Many experts worry that with the suggested taxation method and the low tax rates, it will be impossible to stop speculation. What do you think about that?

Thi: We will meet some difficulties in implementing the tax law, especially in defining the values of houses and land to tax. Moreover, the aggressive tax scheme (people who have more houses will be taxed more – reporter) is really a new and unfamiliar thing. Meanwhile, government agencies still do not know how many houses and land plots people have to calculate tax. Additionally, the database used for house and land management is out-dated.

However, after all, every policy only has its own specific functions and roles in the market management.

Regarding the tax rates, we suggested the tax rates after considering the average indexes in society.

As for the tax on houses, we have set the average area of house per capita at 37.5 square metres, or double the targeted accommodation area per capita by 2020. As every family has four members, the suitable taxable threshold should be 150 square metres. As the price of every square metre of house is four million dong per square metre, the taxable value threshold should be 600 million dong.

Some experts say that it would be unfair to force tens of millions of poor people to pay tax just to try to prevent speculation. What would you say about that?

Thi: It is not true. Housing tax is a kind of asset tax. All people who have assets have to pay tax. I have to repeat that fighting speculation is just one aspect of the law; the housing tax is not an anti-speculation tax.

In fact, opinions vary about the aim of preventing speculation of the housing tax law. Some people think that the aim of preventing speculation should be put as the top priority of the tax law. However, I have to remind you that the law will only help prevent speculation.

The Ministry of Construction thinks that it is unnecessary to tax values of houses, only the areas of houses. Which one do you think would be more suitable?

Thi: According to the ministry and some other institutions, it would be better to tax the areas of houses. However, the problem with this taxation method is that it would create unfairness. There is a big difference between the value of a normal house and a villa. If we applied this taxation method, it would be unfair to people in houses, while those in villas, who are rich, will enjoy more benefits.

Source: VietNamNet/TBKTVN