Deputies turned off by housing tax

The 12th National Assembly has decided, at its ongoing seventh session, not to impose a property tax on homeowners. According to the National Assembly’s Standing Committee, most deputies did not agree with imposing property taxes on homeowners.

Getting low income people into housing is a priority

“After careful consideration and discussions over opinions from National Assembly deputies and the public, the Standing Committee agrees that housing taxes should not be imposed now,” said the National Assembly’s vice chairman Nguyen Duc Kien.

Under the National Assembly’s draft law on housing and land tax, the law will focus on imposing taxes on housing and non-agricultural land. The taxes will enhance the government’s management of the real estate market, encourage people to save and effectively invest in land, reduce speculation and help Vietnam reach international housing and legal standards.

A Standing Committee report said the public did not agree with property taxes, because it would financially burden them while the country’s economy remained unstable. “During our meetings with local people, they said they would be very happy if their houses are not taxed,” said Nguyen Duy Huu, a deputy from Dak Lak province.

“One of the targets of housing and land tax is to limit housing speculation. But, in fact the value of land and housing is closely linked with the value of land and speculation has been focused on land. Thus, limiting speculation means that land must be managed, not housing on land. It will be hard to apply a housing tax now, due to the country’s insufficient different conditions,” the report said.

For example, chairman of the National Assembly’s Finance and Budget Committee Phung Quoc Hien said houses in Hanoi were sold for far higher prices than in Lai Chau province, just thanks to its better location. “Thus the law needed to focus on land taxes only,” Hien said.

However, some National Assembly deputies did not agreed with the decision. Vu Hong Anh, a deputy from Hanoi, said housing should be exposed to tax. He said at present, the housing and land market in most localities, especially big cities like Hanoi, Ho Chi Minh City, Haiphong and Danang was strongly developing, with assorted high-end housing, offices and villas.

Moreover, the country’s Housing Law issued in 2005 and Real Estate Business Law issued in 2006 have enabled the public and economic sectors to develop housing for lease and sale. This has led to land and housing speculation which prevents low-income people to buy housing and land.

“So I think that there must be tools to manage the country’s housing market so that low-income people can buy housing. One of the tools must be tax, which proves to be effective in managing the housing market,” Anh said.

Sharing Anh’s view, deputy Tran Du Lich from Ho Chi Minh City said: “During a short trip from Hanoi’s Noi Bai international airport to Hanoi’s centre, many unoccupied villas can be seen, while so many people in the country are not able to own a home.”

According to him, it was necessary to apply a housing tax. “But, the law needs to impose taxes on those having many houses and land. That is a way to manage the country’s real estate market,” Lich said.

“All land nationwide needs to be re-examined. Otherwise, the law would be difficult to be approved,” he said.

Source: VIR