Vietnam’s National Assembly is weighing a proposal to tax land left fallow, unused or slow to be put into use at 0.2% of its taxable value, as part of a draft law amending several tax statutes. The proposal has not yet been passed into law.
What Happened
At a National Assembly plenary session on November 6, Minister of Finance Ngo Van Tuan explained the government’s proposal to apply the 0.2% rate to idle land. He said the definition of “abandoned land” still needs to be set out specifically in land law, and that tax authorities will coordinate with land-management agencies to determine the area and usage status of each plot using connected land and population data, to guard against abuse of the tax.
Who Is Affected
The proposal matters to anyone holding or considering investing in land in Vietnam, including project developers and individual landowners. Lawyer Pham Thanh Tuan of the Hanoi Bar Association, a real-estate legal expert quoted by VietNamNet, noted that land users in Vietnam already face multiple layers of tax: non-agricultural land-use tax of 0.03%–0.15% (progressive, depending on whether the area is within or exceeds the permitted limit), 2% personal income tax on individual property transfers, and 20% corporate income tax on real-estate transfer gains for businesses.
Background
Pham argued the proposed 0.2% rate may be too low to change the behavior of landowners who expect property values to keep rising. He gave a worked example: a plot with a taxable value of 10 billion VND would incur an annual tax of 20 million VND under the 0.2% rate — an amount he said is unlikely to outweigh the expected gain from continued price appreciation, meaning owners could simply pay the tax and keep waiting. He also pointed to Circular 45/2011/TT-BTNMT, which currently excludes individual/household-owned residential land from the “unused land” category taxed at 0.15%, and said the draft law needs to clarify whether undeveloped residential land owned by individuals would now fall under the new 0.2% category — and from what point the “delay” period would be counted. He stressed that a vacant plot with no house on it is not, by itself, sufficient to classify it as abandoned.
What Comes Next
Pham said three conditions need to be met for the tax to work as intended: precisely identifying which land qualifies, setting a rate with enough financial pressure to influence decisions, and building an enforceable system — ideally backed by connected land, population, electricity and water data rather than manual inspection, which he said risks high implementation costs and disputes. No date has been given for when the amended tax law might pass or take effect.
