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Real estate firms decry new home tax

Update: February, 04/2012 - 09:27

HCM CITY — The municipal Construction Department has proposed the collection of a housing tax in addition to levies collected on land, but real estate firms feel the time is not right for such a move.

The housing tax, which would be imposed on a progressive basis, aims to limit speculation, foster a healthy real estate market and generate more funds for the State budget, department officials have said.

Progressive taxation would mean those who own more houses would end up in higher tax brackets.

Some real estate firms and experts have expressed worries that the house tax would impose greater financial burdens on residents during tough economic times, the Thanh Nien (Young People) newspaper reported yesterday.

Experts say real estate speculation focuses on land, so the proposal envisages a kind of property tax, while high value assets like airplanes and yachts have not been taxed yet, according to the report.

It said most real estate companies thought this would not be the time to implement the housing tax proposal because it would make the situation worse for an already weak market.

Acknowledging that progressive housing tax would encourage land and house purchases for accommodation, experts said that the law allowed citizens to purchase these both for accommodation and as investment in assets.

Furthermore, there were already many real estate taxes, including a 2 per cent tax on land transfers or a 25 per cent tax on profits (based on current assessed value). The new proposal would cause prices to rise further, they contended.

"We need proper solutions at right time. If not, there will be serious consequences." said Nguyen Van Duc, vice chairman of the HCM City Real Estate Association. — VNS

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