Tax on Real Estate Rental Income: New Tax Threshold and How to Calculate from 2026

Renting out houses, commercial spaces, and warehouses is a common passive income source for many Vietnamese families. But it comes with tax obligations that many people are unclear about — or overlook until they face back-tax claims. The good news is that from 2026, the taxable revenue threshold has been significantly increased, allowing many small-scale landlords to avoid tax obligations altogether.

What taxes apply to property rental?

Individual property rental activities are considered service business operations, so when taxable thresholds are met, they typically trigger two types of taxes:

• Value Added Tax (VAT): calculated on rental revenue.
• Personal Income Tax (PIT): calculated on revenue exceeding the exempt threshold.

(Additionally, from 2026, the business license fee for households and individual businesses has been abolished under new regulations.)

New tax threshold from 2026 — major change

This is the most important point. According to the amended Personal Income Tax Law 2025 (applicable to business income from the 2026 tax period), the annual taxable revenue threshold has been raised to VND 500 million per year, replacing the previous threshold of VND 100 million per year.

• Rental revenue of VND 500 million per year or less: no VAT or PIT required.
• Revenue exceeding VND 500 million per year: tax obligations apply.

This is a very favorable change for small-scale landlords — many who previously had to pay taxes are now exempt.

Important note: the tax threshold for household/individual businesses is still being adjusted and may be raised even higher (some sources mention VND 1 billion per year). As this is subject to change, please verify the current threshold with tax authorities before filing.

How to calculate tax when exceeding the threshold

For landlords with revenue above the threshold:

• VAT = Total rental revenue × 5% (calculated on total revenue).
• PIT = (Revenue exceeding threshold) × 5%.

Illustrative example

Mrs. A rents out a house with annual revenue of VND 900 million (assuming a VND 500 million threshold):

• VAT: 900 × 5% = VND 45 million
• PIT: (900 − 500) × 5% = VND 20 million
• Total tax payable: VND 65 million per year

If revenue is only VND 450 million per year (below threshold), Mrs. A does not have to pay either tax.

Easily overlooked considerations

• Multi-year advance payments must be allocated annually: if a tenant pays upfront for multiple years, revenue should be divided evenly across each year for threshold assessment, rather than counted all in one year.
• Who files and pays the tax? Both parties can agree: either the landlord files themselves, or the tenant (if a company/enterprise) withholds and pays on their behalf — this should be clearly stated in the contract.
• Multiple rental properties: file according to each contract as guided by tax authorities.
• No mandatory business household registration required in many cases just for renting property, but tax filing obligations still apply.
• Non-cash payments: for large amounts, bank transfers help ensure transparent documentation and facilitate filing.

Don't wait until you're hit with back taxes

Tax authorities are increasingly interconnecting data (banks, contracts, electronic invoices). Proactively filing correctly from the start helps you avoid back-tax claims and penalties, while building a transparent financial history — useful when applying for loans or proving income.

Note: regulations on thresholds, tax rates, and procedures may change according to new guidance; check for updated information or consult a tax professional before filing.

Want to calculate your tax obligations for rental activities based on your actual revenue? Ask [Sirifin's AI advisor](/vi/ai-advisor), or [schedule a consultation with a tax expert](/vi/advisors).

Content is for informational and financial education purposes, not specific tax advice for individual cases.