Seventy-five per cent of revenue collected was from personal income tax related to real estate transfers and the remaining 25% from real estate registration fees. — VNS
HO CHI MINH: Revenue from personal income tax and registration fees associated with real estate transactions in Ho Chi Minh (HCM) City has surged by 50% to reach over 6.54 trillion Vietnamese dong (US$257.6mil) in the first nine months, according to data from tax authorities.
Seventy-five per cent of revenue collected was from personal income tax related to real estate transfers and the remaining 25% 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%t to 10.51 trillion dong 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 Aug 1, and a recent decision by HCM City authorities to raise land prices.
Despite this increase, overall revenue collection has only achieved 26% of the annual target, with total land-related revenue exceeding 17 trillion dong, up 56% 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 687 million dong (US$27,000) per sq m, while prices in the outskirts have reached 2.3 million dong, increases of four to 38 times.
The new rates, effective from Oct 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 Dong Khoi, Le Loi, and Nguyen Hue streets in District 1, whereas Can Gio District has the lowest rates.
District 4 will experience reductions of 19% to 35%, while Thu Duc City and adjacent areas will see increases ranging from 1.5 to 11 times.
Agricultural land prices are set between 400,000 to 810,000 dong per sq m, while land within technology parks will rise to 12.2 million dong for manufacturing and 15.1 million dong for select streets in Thu Duc 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. — Viet Nam New/ANN
