New real estate developments in downtown HCM City. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Revenue from personal income tax and registration fees associated with real estate transactions in HCM City has surged by 50 per cent to reach over VNĐ6.54 trillion (US$257.6 million) in the first nine months, according to data from tax authorities.

Senventy-five 75 per cent of revenue collected was from personal income tax related to real estate transfers and the remaining 25 per cent from real estate registration fees, according to the HCM City Tax Department.

Other land-related revenue, including land use fees and taxes, has risen by 58 per cent to VNĐ10.51 trillion in the period, according to the department.

The department has attributed the growth in revenue to the proactive involvement of residents in real estate transactions ahead of new legislation effective on August 1, and a recent decision by HCM City authorities to raise land prices.

Despite this increase, overall revenue collection has only achieved 26 per cent of the annual target, with total land-related revenue exceeding VNĐ17 trillion, up 56 per cent year-on-year.

Experts expect that budget revenue from real estate may continue to increase in the fourth quarter due to the implementation of the higher land price framework.

However, projections for the entirety of 2024 may not be fulfilled due to the ongoing sluggish market and delays in ongoing projects stemming from legal issues.

HCM City authorities have recently raised land prices significantly, with residential land in central districts now valued at over VNĐ687 million ($27,000) per square metre, while prices in the outskirts have reached VNĐ2.3 million, increases of four to 38 times.

The new rates, effective from October 31 until 2025, will determine land compensation, taxes, and administrative fees, with the objective of enhancing State tax revenue.

The highest land prices are recorded on Đồng Khởi, Lê Lợi, and Nguyễn Huệ streets in District 1, whereas Cần Giờ District has the lowest rates.

District 4 will experience reductions of 19-35 per cent, while Thủ Đức City and adjacent areas will see increases ranging from 1.5 to 11 times.

Agricultural land prices are set between VNĐ400,000 and VNĐ810,000 per square metre, while land within technology parks will rise to VNĐ12.2 million for manufacturing and VNĐ15.1 million for select streets in Thủ Đức City.

The city authorities are committed to ensuring transparency and fairness in land pricing and compensation, addressing existing disparities that have contributed to tax evasion and delays in real estate development. — VNS