1. Grounds for personal income tax exemption for the income from the transfer of residential house by individuals who posess only one residential house or land plot
Individuals who have only one residential house or land plot in Vietnam will be exempt from personal income tax when transferring.
- Article 4.2 of the Law on personal income tax 2007, as amended and supplemented in 2012 and 2014;
- Article 4.2 of Decree No. 65/2013/ND-CP;
- Article 3.1 (b) of Circular 111/2013/TT-BTC; and
- Article 12.1 of Circular 92/2015/TT-BTC.
2. Conditions for personal income tax exemption
Income from transfer of residential houses by individuals who possess only one residential house or land plot that are exempt from PIT if the following 03 conditions are satisfied:
(i) At the time of transfer, individuals have only right to own one residential house, or right to use one residential land plot (including case of possessing residential house or construction works attached to such land plot), particularly:
- The residential house ownership and land plot use right shall be determined based on the Certificate of land use rights, and ownership of houses and other land-attached assets (“LURC”);
- In case of transferring a house with common ownership, a land plot with the same use right, only the individual(s) who do not have the right to own the house or land use right in another place are exempt from tax, while the individual(s) but also have other house ownership rights and land use rights are not exempt from tax;
- In the case of residential houses, land use rights are the common and sole property of the spouses, but the wife or husband still has their own house or land, when transferring the common residental house, land plot, the wife or husband who does not have a separate residential house or land plot is exempt from tax; the rest are not exempt from tax.
(ii) Duration for individuals to have right to own the residential house, right to use the residential land which is counted to time of transfer is not less than 183 days.
The time of determining residential house ownership and land use rights is the date of issuance of the LURC. In case the Certificate is re-issued or renewed, the time of determining residential house ownership and residential land use rights shall be calculated according to the time of issuance of the Certificate before it is re-issued or renewed.
(iii) Individuals must transfer the entire residential house or residential land.
If individuals have or share the ownership of the only residential house or residential land use right and transfers part of it, the transferred part is not tax-free.