Vacant home tax not really necessary: expert

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The Ministry of Finance is weighing a new tax on uninhabited villas to prevent wasteful land use. Some have criticized the move as a case of using a sledgehammer to crack a nut.

One ministry official told Thanh Nien on Tuesday that they will propose a tax on vacant villas. The tax will begin at 5 percent of the house's total worth and increase for every three month interval that the home remains empty.

Another penalty that's been proposed is a VND20-30 million tax on every six months that a villa is left unoccupied, the official said.

The ministry is still in the process of defining what constitutes an "uninhabited villa."

Pham Sy Liem, deputy chairman of the Vietnam Construction Association, said the government needs to think carefully before introducing a whole new tax.

"Right now I can't think of any legal basis for taxing uninhabited houses," he said. "The government should consider a strategy for dealing with vacant homes that doesn't violate homeowner rights."

Liem argued that a simple fine would suffice, noting that there could be many legitimate reasons for a home to be unoccupied.

Some cash-strapped homebuyers and investors have had to delay construction, leaving their villas unfinished in long periods of time. A new tax will simply create more difficulties for them, he said.

On the other hand, some speculators have tried to buy as many houses as possible and wait for prices to go up. They are the ones who need to be punished, he said.

Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, supported the new tax proposal, saying that it would curb the speculative housing market.

If passed, he argued, the tax should apply to all vacant villas irrespective of the reason for their lack of occupants. Otherwise, people will just try to dodge the tax, he added.

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