Vietnam's proposed property gains tax alarms investors

Discouraging speculation: Residential buildings shrouded by heavy air pollution in Hanoi. The Finance Ministry said the proposed new tax regime would require a gradual and coordinated rollout, aligned with reforms to land, housing and digital infrastructure. — AFP

HANOI: Vietnam’s Finance Ministry has proposed a sweeping new tax regime that would impose a 10% to 20% levy on profits from real estate transactions, raising concerns among investors and experts who warn it could erode earnings, freeze the secondary market, and slow the sector’s fragile recovery.

Stipulated in a draft amendment to the Law on Personal Income Tax, the proposal seeks to replace the current flat 2% tax on property sale prices with a 20% tax on actual profits, which is defined as the difference between the selling price and the original purchase price, minus related expenses.