Vietnam urged to adopt comprehensive property tax to boost land capitalization

Dr. Nguyễn Trí Hiếu, head of the Institute for Research and Development of the Global Financial and Real Estate Market, argues that Vietnam must gradually impose a tax on all real estate to achieve land capitalization and align property values with their actual use. He notes that existing non‑agricultural land use taxes are very low and that most revenue currently comes from transaction fees. The proposed reforms, outlined in Resolution 21, would raise taxes on abandoned or under‑used land and apply higher rates to speculative holdings while exempting the first home used for residence.

Hiếu cites the United States, where property tax is levied annually on both land and structures, with local authorities setting rates typically between 1% and 2% in high‑value areas such as Orange County, California. He suggests a similar decentralized approach for Vietnam, allowing local jurisdictions to set appropriate rates, which could fund infrastructure, schools, parks, health services, and other community needs.