According to the law, income from real estate transfer is subject to personal income tax and a number of other fees. So how to calculate the transfer fee for apartments in Vietnam? Please follow the article below of Lawyer X for more detailed information!
Legal grounds
Decree 10/2022/ND-CP;
Law on Personal Income Tax 2007
How to calculate apartment transfer fee?
When transferring an apartment, the following taxes and fees must be paid:
Registration fee:
Clause 1, Article 3 of Decree 10/2022/ND-CP stipulates that the subjects subject to registration fees include: houses and land.
According to the provisions of Articles 5, 6 and 7 of Decree 10/2022/ND-CP, the registration fee payable when transferring an apartment is:
Registration fee = 0.5% x Registration fee calculation price
(prices are promulgated by the People’s Committees of the provinces and centrally-run cities).
Personal income tax:
Clause 5, Article 3 of the Law on Personal Income Tax 2007 stipulates that taxable income includes: Income from transfer of ownership or use of houses.
“Article 14. Taxable income from real estate transfer
- Taxable income from real estate transfer is determined by the real estate transfer price for each transfer minus the real estate purchase price and related expenses, specifically as follows:
a) The real estate transfer price is the contract price at the time of transfer;
b) The real estate purchase price is the contract price at the time of purchase;
c) Related expenses are deducted based on vouchers and invoices as prescribed by law, including fees and charges as prescribed by law related to land use rights; cost of land improvement, house renovation, cost of ground leveling; investment costs for construction of houses, infrastructure and architectural works on land; other expenses related to the transfer of real estate.
- In case the purchase price and expenses related to the real estate transfer cannot be determined, the taxable income is determined as the real estate transfer price.
- The Government shall prescribe principles and methods for determining the real estate transfer price in case the transfer price cannot be determined or the land use right transfer price stated in the contract is lower than the land price set by the People’s Committee. Provincial regulations in effect at the time of transfer.
- The time of determining taxable income from real estate transfer is the time when the transfer contract takes effect in accordance with law.”
“Article 23. Full tariff schedule
- The full tax schedule applies to taxable incomes specified in Clause 2, Article 21 of this Law.
- The full tax schedule is prescribed as follows:
| Taxable income | Tax (%) |
| a) Income from capital investment | 5 |
| b) Income from copyrights and franchises | 5 |
| c) Income from winning prizes | 10 |
| d) Income from inheritance, gifts | 10 |
| e) Income from capital transfer specified in Clause 1, Article 13 of this Law Income from securities transfer as prescribed in Clause 2, Article 13 of this Law | 200,1 |
| f) Income from real estate transfer specified in Clause 1, Article 14 of this Law Income from real estate transfer specified in Clause 2, Article 14 of this Law | 252 |
Based on the above provisions, payable personal income tax is determined in two ways:
Method 1: If the selling and buying prices are determined:
Personal income tax = 25% x (selling price – buying price).
Method 2: If the selling price or buying price cannot be determined:
Personal income tax = 2% x Transfer price.
In addition, when transferring an apartment, you also have to bear other expenses such as notary fees, measurement fees, etc.
Dossier to prepare
An application for a house ownership certificate (according to the form);
Certificate of home ownership (original + certified copy);
ID card, household registration book of the seller and the buyer (certified copy);
Contract for transfer of house ownership (notarized);
Receipt of notice of tax payment and confirmation of tax payment;
Apartment technical file (original);
Transfer certificate of the investor.
Procedures for transferring an apartment building
Step 1: The owner of the house, the seller, submits an application to the investor to apply for the transfer of his apartment purchase and sale contract. The investor will check the seller’s apartment for late payment, whether or not the contract is mortgaged for a bank loan. If there is no problem, the investor will notify the owner that the apartment is eligible to transfer the apartment purchase and sale contract.
Step 2: Both the seller and the buyer together go to the notary office to make a contract to transfer the apartment purchase and sale contract. When buying and selling apartments after this step, the seller and the buyer are no longer bound, so the buyer will transfer the money to buy the apartment to the seller after this step.
Step 3: Either party (the seller or the buyer can) go to the tax office (the apartment in any district, the tax office of that district) to get a tax receipt and pay tax. According to the Law on Personal Income Tax, the transferor is obliged to pay personal income tax. However, the two parties can agree on which party is obligated to pay tax.
Step 4: Get the receipt, return the documents to the investor for confirmation of the transfer of the apartment.
Procedures for transferring an apartment with a pink book
Step 1: Initial agreement between buyer and seller
Both parties need to agree on the deposit before considering the legal status as pink book. The buyer must go to the cadastral office of the ward where the apartment is located to check whether the apartment is eligible for sale or not. After that, the two parties will agree on a number of terms as follows:
How much deposit?
Time to notarize the contract and how much to pay for the apartment value and how much to keep until the procedure is completed.
Delivery time and things attached to the apartment. The two parties agree on notarization costs and taxes who pay.
Normally, the seller will pay notarization costs and registration taxes (however, depending on the agreement of the two parties to pay taxes and fees as low as possible).
Step 2: Deposit the apartment
The deposit outside the buyer and the seller requires a witness. If you are more careful, you can go to a notary office to make a contract, although this will cost a small amount of money, but it will guarantee the buyer. The notary office will check the legality of the apartment on the system for your peace of mind.
Step 3: Notarized contract
At this stage, the two parties need to go to the notary office to sign the contract according to the prepared form of the notary office. The buyer will pay the amount according to the previous agreement and the seller will hand over the documents. Documents to be prepared include:
Certificate of home ownership
Registration tax return
ID card and household registration of the seller of the house
If married, marriage certificate
Certificate of marital status
Note that each document must have 2 copies including the original and a photocopy. For home buyers need to bring ID card and household registration.
In case the transaction person is an organization, when going to the notary public, it is necessary to bring the business license and the company’s seal. Must be present of husband and wife and if it is a company, must be the legal representative.
Step 4: declare tax with state agencies
After completing the deposit procedures, the two parties will proceed to declare tax with the tax department. If nothing changes, usually within 7 days, the documents will be completed and submitted to the tax department and scheduled for tax payment. The two parties should note that after signing the notarized contract, they must declare tax within 10 days. Documents to prepare when declaring tax:
Notarized transfer contract of the buyer.
Certificate of ownership of house/apartment.
Old registration fee declaration
ID card and household registration of buyer and seller
Sample county tax returns
Step 5: Complete the home ownership procedure
This is the last and most important step in owning a house according to the law. Documents to prepare:
Notarized transfer contract of the Buyer
Certificate of home ownership
Old registration tax return / old registration tax return
ID card and household registration of the buyer
Declare the declarations of property change registration of the districts.
Note that after submitting all documents, the state agency will allow an appointment for about 3 weeks to get the registered book.
Please see more:
- Transfer of investment projects associated with the transfer of land use rights in Vietnam
- Guidance on procedures for transferring land use rights in Vietnam
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Frequently asked questions
For real estate projects, apartments should find out if the bank participates in the guarantee for that project or if the project is mortgaged to the bank. Because, contracts that are not eligible to conduct transactions when a dispute arises will be declared invalid by the court.
The main reason leading to the investor’s delay in handing over the certificate to residents is that the investor brought the project to mortgage the bank. In many cases, the investor mortgaged the project at the bank but used the capital for the wrong purpose.
Assignment is the transfer of assets of an individual or organization to another individual or entity. In which, the transferee will have the right to own and enjoy the same rights as the previous owner’s rights.
The transferor will receive a monetary value equivalent to the asset value as agreed upon by the two parties.
Conclusion: So the above is How to calculate apartment transfer fee in Vietnam?. Hopefully with this article can help you in life, please always follow and read our good articles on the website: lsxlawfirm.com
