Lawmakers want new tax on houses delayed

Laws - Members of the National Assembly Standing Committee on Friday said the time was not right to introduce a new tax on home ownership.

Under the latest draft property law submitted to the National Assembly, homeowners would have to pay a new taxes of at least 0.03 percent based on the combined value of all of their houses, with a tax-free threshold of VND500 million (US$27,000). Home values would be assessed based on total construction costs.

But Nguyen Van Thuan, chairman of the Law Committee, said the tax should not be introduced now and suggested an opinion poll be carried out first.

Ha Van Hien, chairman of the Economics Committee, said the timing is not right to impose a tax on houses.

“National Assembly representatives have discussed the tax and most of them opposed it” Hien said, noting that incomes of local people were still low.

The Finance and Budget Committee said the tax should only be levied starting on the second home. The second option is to raise the tax-free threshold to VND1 billion so that most homeowners will not have to pay the tax.

Tran The Vuong, a member of the NA Standing Committee, said he would support the first option if the new tax is introduced. However, he said the law should also take into consideration the fact that some houses alone are worth more than two or more houses combined.

There is currently no housing tax in Vietnam. The new tax system aims to curb property speculation and ensure economical use of land in the country, the government said in a report.

But Chairman of the NA Finance and Budget Committee, Phung Quoc Hien, said the purpose would not be realized as the proposed tax rates were too low.

The government expects the property tax law to be passed by the National Assembly next year and come into effect at the beginning of 2011. The Finance and Budget Committee said there should be more time to prepare for the new tax, suggesting a one-year delay for the implementation.