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Vietnam Business » Vietnam Real Estate Market News » Real estate owners sell off to avoid PIT

Real estate owners sell off to avoid PIT

The Ministry of Finance has released Circular 161 on imposing the 25% PIT on the profit people get from real estate assignments, meaning the margin between sale and purchase prices.

Analysts have reported a ‘strong wave’ of selling off property to avoid PIT. Real estate brokerage offices these days boast a lot of attractive advertisements for houses and apartments for sale. All of the ad pieces emphasise that property owners want to sell properties as soon as possible.

“We need to sell a land lot at Him Lam-Kenh Te project in district 7 at 43 million dong per square metre. The price will be valid for one week only,” says one ad.

Hoang related that a land lot with the area of 90 square metres at Him Lam-Kenh Te project was priced at 8 million dong per square metre previously and now it is priced at 43 million dong. This means that a seller would have to pay 756 million dong in tax if they sold the land lot after September 26, 2009.

Hoang said that the PIT tax will make many real estate traders suffer losses. The problem lies in the fact that properties have gone through many buyers before going to the final buyers, but the sellers and buyers did not fulfill the ownership transfer procedures for previous deals. This means that the final sellers will have to bear high taxes, since the gaps between the initial and the final prices are very big.

Vietnam Business And Financial News Network. Source [infotv.vn]

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