12-07-26 MTParners
A sole residential property must be held for at least 183 days to qualify for tax exemption; property divided upon divorce is now officially exempt from personal income tax.
On 30 June 2026, the Government issued Decree No. 253/2026/ND-CP detailing a number of articles and measures for the implementation of the Law on Personal Income Tax, effective from 1 July 2026. The Decree lists 22 categories of tax-exempt income, most notably the provisions on tax exemption for transfers, inheritance and gifts of real estate — an area directly affecting millions of property transactions carried out by individuals nationwide each year.
Decree No. 253/2026/ND-CP details the scope of taxpayers, taxable income, tax-exempt income, tax bases, and procedures for withholding, finalization and refund under the new Law on Personal Income Tax. Among the 22 categories of exempt income, the first two relate directly to real estate: (i) income from transfers, inheritance or gifts of real estate between close family members; and (ii) income from the transfer of an individual’s sole residential house or residential land use rights. Other notable exemptions include overseas remittances, pensions, scholarships, bank deposit interest, and income of private enterprise owners and owners of single-member limited liability companies.
Under the Decree, income from transfers, inheritance or gifts of real estate is exempt when arising between: husband and wife; biological parents and children; adoptive parents and adopted children; parents-in-law and daughters-in-law or sons-in-law (including after the spouse’s death); paternal or maternal grandparents and grandchildren; and siblings. A significant new point is that the exemption now expressly covers residential housing and construction works formed in the future (off-plan properties) under the law on real estate business — a category that previously caused considerable difficulty in determining tax obligations.
A provision of particular note for married couples: where real estate (including off-plan housing and construction works) is divided upon divorce — whether by agreement or by court judgment — the income arising from such division is exempt from personal income tax. This removes the risk of the transfer of title under a divorce judgment or decision being treated as a taxable “transfer”, facilitating the enforcement of decisions on the division of common property.
An individual transferring their sole residential house or residential land use rights in Vietnam is exempt from tax if all of the following conditions are met: (1) at the time of transfer, the individual owns only one residential house or holds use rights over only one residential land plot — if the individual also holds off-plan housing or construction works at that time, the property is not regarded as sole; (2) the ownership or use rights must have been held for at least 183 days up to the time of transfer, determined by the issuance date of the Certificate; (3) the entire property must be transferred — a partial transfer of a sole land plot remains taxable for the transferred portion; and (4) the exemption does not apply to transfers of off-plan housing. For co-owned property, only the co-owner who owns no other residential property elsewhere is exempt for their share. The transferor self-declares and bears full responsibility; false declarations are subject to tax recovery and penalties under the law on tax administration.
The 2% tax rate on the transfer price per transaction remains unchanged, but the minimum 183-day holding requirement for sole residential property is a new tool aimed at curbing speculative “flipping” disguised under the exemption. Genuine homeowners holding property long-term are largely unaffected, while short-term investors will no longer be able to rely on the sole-property rule. Codifying the exemption for property divided upon divorce and for off-plan property transferred between family members should also significantly reduce long-standing disputes between taxpayers and tax authorities.
For individuals: before signing a transfer contract, review the holding period stated on the Certificate (noting that re-issued or exchanged Certificates are counted from the original Certificate), verify whether you own any other residential property including off-plan assets, and retain documents proving family relationships for transactions with relatives. For divorcing couples: clearly record the division of real estate in the written agreement or court judgment to secure the exemption upon title transfer. For real estate businesses and trading floors: update client advisory procedures, particularly regarding self-declaration obligations and the risks of tax recovery and penalties for incorrect exemption claims.
MT & Partners Law Firm, with a team of lawyers highly experienced in land, tax, marriage and family matters, stands ready to assist clients in all real estate transactions and related legal procedures. Contact our hotline 0987140772 or email info@mtpartners.vn for advice.
(*) This article is for reference only and does not constitute specific legal advice.
Keywords: Decree 253/2026/ND-CP, personal income tax exemption, real estate transfer 2026, PIT on property transfer, sole residential property exemption, 183-day condition, tax on property divided upon divorce, inheritance and gifts of real estate, 2% transfer tax, Law on Personal Income Tax 2026
53
Tiếng Việt
English
中文