New regulations on selling social housing after 5 years of use, people benefit hundreds of millions

The General Department of Taxation (Ministry of Finance) has just issued a document responding to the Hanoi Tax Department regarding the collection of land use fees when transferring social housing apartments.

According to the General Department of Taxation, at Point e, Clause 1, Article 89, Housing Law 2023 stipulates: “...After 5 years from the date of full payment for the house purchase, the buyer of social housing is allowed to resell this house according to the market mechanism to those in need if a certificate has been granted; the seller does not have to pay land use fees and must pay income tax according to the provisions of the law on tax, except in the case of selling social housing as individual houses, the seller must pay land use fees according to the provisions of the Government and must pay income tax according to the provisions of the law on tax”.

Article 42 of Decree No. 100/2024 stipulates that land use fees must be paid when reselling social housing after a period of 5 years.

Accordingly, in addition to the amounts payable as prescribed, the seller must pay 50% of the land use fee. The time for calculating the land use fee is the time of submitting valid documents to recognize land use rights according to the provisions of the law on land.

In addition, at Point d, Clause 5, Article 198 of the 2023 Housing Law stipulates that in cases where social housing is sold and land use fees must be paid before the effective date of this law, but by the effective date of the 2023 Housing Law, land use fees have not yet been paid, the payment shall continue according to regulations.

Based on the above regulations, the General Department of Taxation said that in the case where the buyer of social housing is allowed to resell the house according to the provisions of the law on housing and transfers it after August 1, 2024 (the effective date of the Housing Law), he/she does not have to pay land use fees and must pay income tax.

In the case of selling social housing as individual housing, the seller must pay 50% of the land use fee and must pay income tax.

In the case of selling social housing, land use fees must be paid according to the provisions of the law on housing before the effective date of the Housing Law but land use fees have not yet been paid, the money must continue to be paid according to the provisions of the law on housing before the effective date of this Law.

In Hanoi, according to the market, many social housing apartment projects have been used for over 5 years and are eligible for transfer, such as Dai Kim Building, Rice City Linh Dam, 43 Tran Phu; 987 Tam Trinh...

Surveys at many social housing projects show that although the apartments have been used for many years, their prices have increased many times, equal to apartments in commercial housing projects. The selling price in some places is up to 50 million VND/m2.

Previously, when transferring a social housing unit, people had to pay 50% of the land use fee, which was around 120-200 million VND. With the new regulation, people do not have to pay this fee.