Real estate still hopes to be on the list of tax reductions

Despite receiving many policy "supports", the real estate market is still facing difficulties and wants to enjoy more tax reduction incentives.

Previously, on June 30, the Government issued Decree 44/2023/ND-CP stipulating a policy to reduce Value Added Tax (VAT) by 2% according to the Resolution of the National Assembly. However, banking, securities, and real estate products are not subject to VAT reduction from 10% to 8% in 2023.

Given the prolonged difficulties of the real estate market, experts say that this group still needs to be included in the list of VAT rate reductions. Currently, the Government is making great efforts to remove difficulties for real estate with timely policies and solutions. However, there is still a "lag" and more time is needed for the policy to permeate.

Meanwhile, the solution to ease the difficulties for businesses and the real estate market by reducing value-added tax will quickly bring about results, even immediate results. Therefore, it is possible to simultaneously achieve multiple goals, both promoting market development, contributing to general economic development, and positively impacting other important economic sectors. In particular, it will create conditions for people to have the opportunity to access and buy housing at lower prices - experts commented.

Mr. Bui Van Doanh - Director of the Real Estate Research Institute (Vietnam Real Estate Association) said that real estate prices are continuously increasing and are currently still at a high level, making it difficult for people who want to buy a house to live in, especially for those with low and middle incomes.

Therefore, if the real estate business group is also included in the list of 2% VAT reduction, at least housing prices will decrease by the above rate. That will help people have the opportunity to buy houses at lower costs and more people will have houses.

Sharing the same view, Lawyer Truong Thanh Duc - Head of Policy Consulting and Criticism Department of Vietnam Association of Corporate Directors (VACD) said that reducing VAT by 2% for most product groups is extremely necessary in the current period, but unfortunately, it excludes some sectors; including real estate and banking, which have a great impact on many other industries and the whole economy.

Over the past year, the real estate market has fallen into a difficult situation, affecting dozens of other industries, and having a very negative impact on the market in general - Mr. Duc cited.

Meanwhile, VAT is an indirect tax. Therefore, in essence, it will not reduce taxes for real estate businesses or sellers, but will reduce taxes for consumers, mainly those who buy houses and other real estate.

"Like other businesses in general, if a real estate business basically pays a lot of VAT, it will also get a lot of deductions, if it pays less, it will get less deductions" - this lawyer analyzed.

However, if the real estate sector is reduced by 2% VAT, it will have a direct impact on home buyers, thereby stimulating the market to warm up in the current difficult context. Moreover, the 2% VAT reduction will not last forever, but only for 6 months.

Furthermore, VAT is a tax levied on the final consumer, not on the business. Therefore, reducing VAT is essentially a price reduction for buyers, while also promoting the real estate market to have more momentum to develop in the current context.

Assessing the recovery potential of the real estate market in the coming time, Mr. Tran Van Binh - General Secretary - Vice President of the Vietnam Association of Realtors (VARS) said that, along with legal and capital bottlenecks, the trust of customers and investors is the final "barrier" that needs to be cleared so that the real estate market can truly return to normal.

The real estate market in the fourth quarter of 2023 will be a stepping stone for the transformation in 2024. The overall picture of the market is expected to have many new bright spots from policy "support". Especially in areas with much room for development, with synchronous and modern planning, infrastructure that is interested and focused on investment, and low price levels.