The Ministry of Finance (MOF) is seeking feedback on the draft PIT (Personal Income Tax) Law (replacement) which consists of a number of new provisions. 

Under the draft law, the PIT on income from real estate transfers by resident individuals would be calculated as taxable income multiplied by a 20 percent tax rate per transaction.

If the purchase price and related transfer costs cannot be determined, the tax will be based on the holding period: 10 percent for properties held under 2 years; 6 percent for 2 to under 5 years; 4 percent for 5 to under 10 years; and 2 percent for properties held 10 years or more or inherited properties.

The holding period is calculated from the date an individual gains ownership or use rights (from the effective date of the new PIT Law) to the transfer date.

Vu Cuong Quyet, CEO of Dat Xanh Mien Bac, said the proposed 20 percent tax on the profit margin per real estate transaction for individuals is reasonable, as real estate companies now have to pay 20–22 percent tax.

He noted that tiered tax rates based on holding periods are appropriate. A 10 percent tax for properties held under 2 years is fitting, and lower taxes for longer holdings encourage a market driven by genuine demand rather than short-term speculation.

“This tax proposal offers multiple benefits: it increases state revenue, stabilizes the market, and prevents price spikes driven by speculators, which is great for buyers with real housing needs. It significantly reduces real estate speculation,” Quyet said.

While predicting that market liquidity would be weaker because of the decrease in speculation demand, he believes this will be short-term and not overly disruptive. In the long run, the market needs stability and genuine demand, not artificial “waves” driven by speculation.

Pilot in Hanoi, HCM City, Da Nang

Nguyen Quang Huy from Nguyen Trai University views the proposed change in PIT calculation as significant fiscal reform. It not only adjusts budget revenue but also reshapes the real estate market, which faces issues like artificial land price surges, widespread speculation, asset inflation, and prices beyond most people’s reach.

Transactions often involve “dual prices” and legal loopholes, eroding trust in institutions and the market.

Under current regulations, PIT on real estate transfer is 2 percent of the transfer price each time. Huy believes the taxation is unfair for long-term investors, and small profits are taxed like super profits from speculation.

The 20 percent tax rate for each real estate transfer is a true approach to the nature of PIT, which is levied on profit, i.e., the difference between the selling price and the purchase price after deducting valid expenses.

“This approach promotes fairness: those with high profits pay more, while those with low or no profits may be exempt. It encourages transparent record-keeping and fosters a culture of personal financial culture,” Huy said.

Regarding tiered taxes based on holding periods, Huy believes a 10 percent rate for properties held under 2 years will curb short-term speculation and ‘surfing investments’ that may cause market instability. 

For properties held for 2 to under 5 years, the tax rate of 6 percent will balance investment and real ownership; and for real estate with a holding period of 5 years to under 10 years, a tax rate of 4 percent will encourage medium and long-term investment.

As for real estate with a holding period of 10 years or more and real estate originating from inheritance, the tax rate of 2 percent is seen as humane, encouraging people to keep their homes long-term and transfer family assets.

Huy views this tax approach as progressive and aligned with developed nations like the UK, France, Germany, and the US. It delivers three strategic values: market stability, reduced land price fever, and less price volatility; curbed speculation and improved land use efficiency; and encouragement of investment in production and business rather than land hoarding.

“If properly designed and implemented, this will be a historic turning point in real estate market management. Because it not only creates a stable, fair, and transparent source of budget revenue, but also reorients investment behavior and combats speculation. Thanks to that, real estate prices can return to their real value, making it easier for people with real housing needs to access them,” Huy commented.

Nguyen Le