Good News for the Real Estate Sector: New and Extended Tax Incentives

October 28, 2024

On October 9, 2024, the Ministry of Economy and Finance issued Notification No. 014 on the Extension and Addition of Tax Incentives for the Real Estate Sector (“Notification 014”) to reduce the tax burden on companies engaged in housing development and assist property owners.

We provide an overview of the incentives below.

1. Stamp tax on the transfer of ownership or possession of real estate

• The exemption from stamp duty on the transfer of ownership or possession of all types of Borey housing with a value of less than or equal US$70,000 has been extended until the end of 2025.
• The deduction of US$70,000 from the stamp duty basis for the purchase of housing with a value of over US$70,000 in a Borey housing development project for which there is a real estate business license has also been extended until the end of 2025.

Accurate sales contracts based on the market value must be provided.

2. Capital gains tax

• The postponement of the application of capital gains tax on real estate owned by natural persons has been extended until the end of 2025.
• The other five types of assets—leases, investment assets, goodwill, intellectual property, and foreign currency—will be subject to capital gains tax from the beginning of 2025 onwards.

3. Property tax

• Agricultural land used for cultivation is exempt from property tax and does not require a certification letter. This exemption has been extended to remain valid as long as the land is actively utilized for agriculture.
• The exemption from property tax for residential land used for agricultural purposes has been extended until June 2025, although exceptions apply, and documentation such as a permit or confirmation letter from the local authorities is required.
• Immovable property that has been registered and the associated property tax was paid in the past with an inaccurate tax base shall be exempt from tax re-assessment, from the year of filing until 2024. Starting in 2025, existing laws and regulations will apply

4. Unused land tax suspension 

Suspension of unused land tax has been extended through the end of 2024. 

The Ministry of Economy and Finance will issue new regulations on unused land tax, simplifying the exemption process starting in 2025.

• Land subject to unused land tax refers to land located outside the area subject to property tax.
• There will be a deduction allowed of five hectares per land plot from the unused land subject to the tax.
• An exemption from the tax will be allowed if the land meets the conditions specified in Notification 014.