Abandoned villas in an urban area in Hà Nội. The Ministry of Construction has proposed tax to be imposed on owners of more than one real estate properties in an effort to prevent speculation. — VNA/VNS Photo

The Ministry of Construction has proposed tax to be imposed on owners of more than one real estate property in an effort to prevent speculation, according to the ministry’s recent report to the Government Office about real estate prices.

The proposal was raised as real estate prices have been increasing dramatically since the beginning of this year.

In some recent land auctions, winning prices were several times higher than initial prices, which significantly affects socio-economic growth and the healthy development of the real estate market.

In Hà Nội, prices of apartments or independent houses in several districts like Tây Hồ, Hai Bà Trưng, Ba Đình and Hoài Đức also skyrocketed compared to the market demand.

Prices of apartments were reported to increase by up to 6.5 per cent in the second quarter of this year. Some projects saw strong increases in prices of around 28 to 33 per cent over the same period. However, the ministry said that the increase was only short term and started to slow down in the second quarter, because the number of transactions fell by 30 per cent on high prices as home-seekers kept watching rather than making purchase decisions.

The ministry’s report pointed out that speculation by some investors, speculators and brokers pushed up real estate prices recently. Buying and selling for illegal profit is becoming more common, along with many other tricks that are distorting the market, the ministry said.

This is not the first time the idea of taxing those who own more than one real estate asset has been raised.

The Việt Nam Association of Real Estate Brokers recently proposed imposing tax on owners with more than one real estate property or those who own abandoned properties.

The Ministry of Finance said that it is studying a draft law on real estate tax.

To stabilise the real estate market, the Ministry of Construction also proposed a pilot project to create a State-managed centre for real estate and land ownership transactions to prevent real estate trading companies and brokers from distorting the market.

Management and inspections will also be tightened, the ministry said. — VNS Photo