From July 1, 2025, will VAT be applied when selling state-owned housing to current tenants in Vietnam?

What types of state-owned housing exist in Vietnam?

Based on Article 13 of the Housing Law 2023, the types of housing considered public property include:

(1) Official duty housing, including both central and local government official duty housing as prescribed by the housing law;

(2) Housing designated for resettlement constructed or purchased by the State for the purpose of resettlement but not yet allocated, as stipulated by the housing law;

(3) Social housing and housing for the armed forces, constructed by the State for individuals entitled to social housing policies according to the housing law;

(4) Housing other than those specified in (1), (2), and (3), built with state budget funds, having originated from the state budget, or established as public ownership under legal provisions over time, currently leased to households and individuals as prescribed by the housing law;

(5) Housing of other owners converted to public ownership under legal provisions not falling under the case specified in (4).

From July 1, 2025, will VAT be applied when selling state-owned housing to current tenants in Vietnam? (Image from Internet)

From July 1, 2025, will VAT be applied when selling state-owned housing to current tenants in Vietnam?

According to Article 5 of the Value-Added Tax Law 2024 (Effective from July 1, 2025), the objects not subject to value-added tax include:

Objects not subject to tax

1. Products from cultivated plants, planted forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone ordinary preliminary processing, produced, caught, or imported by organizations or individuals.

2. Livestock breed products according to livestock law; plant variety materials according to cultivation law.

3. Livestock feed according to livestock law; aquaculture feed according to fisheries law.

4. Salt products produced from seawater, natural rock salt, refined salt, iodized salt primarily consisting of sodium chloride (NaCl).

5. Housing under public property sold by the State to the current tenants.

6. Irrigation, drainage services; land plowing, harrowing; intra-field drainage canal dredging serving agricultural production; agricultural product harvesting services.

7. Transfer of land use rights.

*8. Life insurance, health insurance, student insurance, other insurance services related to humans; livestock insurance, plant insurance, other agricultural insurance services; insurance for ships, vessels, equipment, and necessary tools directly supporting fishing; reinsurance; insurance for oil and gas structures, equipment, foreign-flagged oil storage vessels leased by oil contractors or foreign subcontractors to operate in Vietnamese waters, overlapping areas under jointly agreed exploitation policies. *

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According to the current regulation, specifically clause 5 Article 5 of the Value-Added Tax Law 2008, state-owned housing sold by the State to current tenants is categorized as not subject to VAT.

As per clause 2 Article 197 of the Housing Law 2023, state-owned housing as defined in legal documents on housing issued before the Housing Law 2023 takes effect is considered public property.

From these provisions, from July 1, 2025, housing under public property sold by the State to current tenants will not be subject to VAT.

Who is eligible to rent or purchase state-owned housing in Vietnam?

Eligible entities for renting or purchasing state-owned housing are specified in clause 1 Article 126 of the Housing Law 2023 as follows:

- Individuals specified in clause 1 Article 45 of the Housing Law 2023 are only permitted to rent official duty housing;

- Individuals specified in clauses 1, 2, 3, 4, 5, 6, 7, 8, 9, and 10 of Article 76 of the Housing Law 2023 can be considered for renting or purchasing social housing;

- Individuals specified in clause 7 Article 76 of the Housing Law 2023 can be considered for renting or purchasing housing for the armed forces if they have not rented, leased, or purchased social housing;

- Individuals specified in clause 10 Article 76 of the Housing Law 2023 who have not rented, leased, or purchased social housing can be considered for renting or purchasing housing for resettlement purposes;

- Individuals currently using housing as specified in point d clause 1 Article 13 of the Housing Law 2023 can be considered for renting or purchasing that housing;

- Individuals specified in clause 11 Article 76 of the Housing Law 2023 can be considered for renting social housing.