Rental Income Tax in Vietnam 2026: New Rules, the VND 1 Billion Threshold & Examples
From 2026, the way individuals are taxed on rental income in Vietnam changes in one important way: the annual tax-free threshold rises to VND 1 billion (up from the old VND 100 million). This guide is written for two audiences: current landlords who want to calculate and declare correctly, and investors weighing a buy-to-let purchase who need to know how tax affects their yield. We cover the threshold, the taxes involved, the exact formula, worked examples, after-tax returns and the filing procedure — for both local and overseas owners.
Vietnam Rental Tax 2026 — In 30 Seconds
The Big 2026 Change: A VND 1 Billion Exemption Threshold
Previously, an individual earning more than VND 100 million a year from leasing property already owed tax. From 2026 that threshold rises to VND 1 billion per year. The key points:
- The threshold applies to your TOTAL turnover across all properties you lease in the year — not per unit. If you own three apartments, it is the combined rent that is measured against the VND 1 billion line.
- Turnover of VND 1 billion or less: exempt from both value-added tax (VAT) and personal income tax (PIT) — but you still have to file a declaration.
- Turnover above VND 1 billion: tax applies under the formula below.
At today’s rents, an owner leasing one or two residential units usually falls under the threshold and pays nothing — but investors with several units, or a high-end apartment commanding premium rent, should run the numbers.
The Three Taxes on Rental Income
- Business licence tax: EXEMPT. Individuals leasing property do not pay the business licence fee.
- Value-added tax (VAT): 5%. Applies only when total turnover exceeds VND 1 billion a year, and is charged on your entire turnover.
- Personal income tax (PIT): 5%. Also applies only above the threshold, but is charged only on the portion of turnover above VND 1 billion — an important difference from VAT.
How to Calculate Rental Tax: Formula & Examples
When your annual rental turnover exceeds VND 1 billion, the full formula is:
VAT = 5% × total annual turnover
PIT = 5% × (total turnover − VND 1 billion)
Total tax due = VAT + PIT
The most common error is applying PIT to the whole turnover. In fact VAT is on the total, while PIT is only on the excess over VND 1 billion.
Example 1 — VND 800 million/year (below threshold)
You lease a two-bedroom apartment for around VND 67 million a month, VND 800 million for the year. Being below the VND 1 billion line, you are fully exempt from VAT and PIT. Tax due = zero — but you should still file a declaration for a clean record.
Example 2 — VND 1.2 billion/year (above threshold)
Your total rent for the year is VND 1.2 billion:
- VAT = 5% × 1.2bn = VND 60 million
- PIT = 5% × (1.2bn − 1bn) = 5% × 200m = VND 10 million
- Total tax = VND 70 million (about 5.83% of annual turnover)
Note: applying PIT to the full 1.2bn would wrongly inflate the figure to VND 120 million — a VND 50 million error.
Example 3 — Multiple units combined
You own three apartments, each earning VND 500 million a year. Because the threshold is measured on the total, combined turnover is VND 1.5 billion:
- VAT = 5% × 1.5bn = VND 75 million
- PIT = 5% × (1.5bn − 1bn) = VND 25 million
- Total tax = VND 100 million
This is why multi-unit investors should track total turnover from the start of the year to manage cash flow.
Filing & Payment: Procedure and Deadline
- One return for all your units. You do not file separately per property — everything is consolidated into a single declaration.
- Identifier: Vietnamese citizens use their citizen ID number; foreigners use a 10-digit personal tax code.
- The deadline to file and pay for tax year 2026 is 31 January 2027.
- Even when you are below the threshold and exempt, filing keeps your financial record clean — useful for financing, resale or proof of income.
What Landlords Should Know About Cash Flow
For investors, tax is one variable in the yield equation, not a barrier. A few principles:
- Model your after-tax yield, not just the gross. A premium apartment with high rent can push total turnover past VND 1 billion; build the ~5.83% effective rate (from the 1.2bn example) into your cash-flow model.
- Consider how ownership is spread. When total turnover sits close to the threshold, some investors discuss with an advisor how holdings are titled across family members — each with their own threshold — provided it is genuine and compliant.
- Keep full documentation. Lease agreements, receipts and bank statements make filing quick and protect you if figures are ever reviewed.
- Choose the right asset at purchase. Location, segment and legal status drive occupancy and achievable rent — they affect your cash flow far more than the tax figure itself.
Common Mistakes to Avoid
- Using the old VND 100 million threshold. It has been replaced; the current threshold is VND 1 billion a year.
- Assuming a “VND 500 million” threshold. No such figure applies to individual leasing — the correct number is VND 1 billion.
- Applying PIT to total turnover. PIT is only on the excess over VND 1 billion; only VAT is on the total.
- Measuring the threshold per unit. It applies to the combined turnover of all your properties.
- Skipping the declaration when below the threshold. Exempt from tax does not mean exempt from filing.
Frequently Asked Questions
Do I owe tax on VND 900 million of rent a year?
No. It is below the VND 1 billion threshold, so VAT and PIT are exempt — but you should still file.
Is the VND 1 billion threshold per unit or total?
It is measured on the total turnover of all the properties you lease in the year.
How are foreigners taxed on rental income in Vietnam?
The same formula and threshold apply; you file using a 10-digit personal tax code.
Do I pay business licence tax?
No. Individuals leasing property are exempt from the business licence fee.
When is tax for 2026 due?
The deadline to file and pay is 31 January 2027.
This content is for general reference and reflects rules applying from 2026. For your specific situation, consult an advisor or the tax authority.
Old Rules vs New Rules
To see how big the change is, compare the old and new thresholds:
- Before 2026: turnover above VND 100 million a year was already taxable — almost every residential lease crossed the line.
- From 2026: the threshold rises to VND 1 billion a year, ten times higher. Most owners of a single leased unit now sit entirely within the exempt zone.
The practical effect: small landlords see their tax burden fall sharply, while owners of larger portfolios still pay on the excess. The policy rewards transparent rental cash flow and eases the load on owners with modest rental income.
A Worked After-Tax Yield Example
Suppose you buy an apartment for VND 5 billion and lease it for VND 25 million a month (VND 300 million a year):
- Gross rental yield = 300m / 5bn = 6% a year.
- Turnover of 300 million is below the VND 1 billion threshold → tax-exempt → the after-tax yield is also 6%.
Now suppose you own four similar units, VND 1.2 billion total → above the threshold, tax of VND 70 million (as in the earlier example). The portfolio’s after-tax yield edges down from 6% to about 5.65% — still attractive versus a savings deposit, and before any capital appreciation. The lesson: tax only mildly affects returns — what really matters is choosing the right unit in the right location to keep occupancy high and rent strong.
Can I deduct expenses like management fees or repairs?
The individual regime here applies flat 5% VAT and 5% PIT rates on turnover rather than on net profit, so there is no separate itemised expense deduction — the low flat rates already reflect this. Keep records nonetheless.
What if my apartment is only rented for part of the year?
Only the rent you actually receive counts toward turnover. A unit leased for six months contributes just that period’s income to your annual total for the threshold test.
Does the threshold reset each calendar year?
Yes. The VND 1 billion test is applied per tax year, so your turnover is assessed afresh every year.
Talk to a Realtique advisor
Leave your details and we will help you calculate your after-tax rental return, register your tax code, and stay compliant — a callback within two business hours.
Hotline: +84 866 810 689
Phi Long
Phi Long helps local and overseas investors model after-tax rental yields and structure ownership correctly under Vietnam’s current rules.
