Applying commercial and service land tax is too high, businesses are struggling
According to research data from the Vietnam Association of Realtors (VARS), by March 24, 2025, 30 localities across the country had officially announced regulations to adjust and supplement the 5-year land price list, period 2020-2024, effective until December 31, 2025.
Some localities have recorded a lot of land prices compared to before. According to the Vietnam Real Estate Research Institute (Vietnam Real Estate Association), besides the positive impacts, the application of new land price list is not synchronized with the principles of land price determination, especially market principles and the principle of harmonizing the interests of the parties. The consequences of this have caused a lot of difficulties for enterprises in the case of land renting annual payment (applied the price specified in the price list - Article 159 of the 2024 Land Law), leading to a sudden increase in land rent, significantly affecting the business plan of many businesses, even in case of revenue is not enough to pay land rent.
Ms. Vu Lan Anh - Deputy General Director of CEO Group shared in a recent event that current regulations do not regulate the calculation of commercial and service land prices based on land prices in the same area. However, in reality, up to now, localities often collect land rent paid once throughout the project life cycle, equal to about 70% of the land use fee for residential land.
According to the company's assessment, this rate is unscientific and very high. This leads to high commercial and service land prices, high real estate prices, and discourage investors from investing in tourism and resort projects on commercial and service land.
From the above reality, Ms. Vu Lan Anh expressed her opinion - when determining commercial and service land prices in the Land Price List, localities need to determine and scientifically calculate according to "market principles", "harmonizing benefits" so that commercial and service land prices are about 20% to 40% compared to residential land prices.
Ms. Lan Anh's proposal received the approval of the business world because commercial and service land is land leased for a limited period of time, so it will forever be public land left for the next generation. After the project life cycle, the state will reclaim it to hand over a new project or consider extending it. This is completely different from residential land, when the state allocates land to build a house, this land becomes land for long-term use by the people.
Some localities, including Da Nang, have proactively removed some of the difficulties for businesses when deciding to reduce 10% for commercial service land, specifically reducing from 70% to 60% of residential land prices. Meanwhile, Khanh Hoa plans to apply a ratio of commercial service land prices up to 80% compared to residential land prices, which is expected to cause further difficulties for businesses in the context of many difficulties.
It is necessary to harmonize benefits to promote the private economy in the new era
For commercial and service land, experts also recommend that localities need to consider projects that have been invested in and put into operation so that costs are not too large, leading to difficulties for businesses.
For example, for businesses that are leasing land annually by the state, the 2025 land price list will increase compared to 2024 prices by 3-5 times, so businesses will suffer heavy losses in the current difficult context. For example, in Nha Trang - Khanh Hoa, the reality shows that the prices of high-rise hotel rooms and low-rise villas are also very low compared to the list, many hotels only keep prices to keep guests and maintain operations, many places accept losses, a series of hotels in Nha Trang are being advertised for sale without anyone buying.
VCCI believes that local operators need to have policies to support businesses to make a breakthrough in production and investment, especially in the context of difficult economic forecasts in 2025.
Economic expert Associate Professor, Dr. Dinh Trong Thinh also said that the budget revenue when allocating or leasing land needs to be designed with flexibility, based on the characteristics, land use purpose and nature of the projects. For commercial and service land (building offices, hotels, commercial centers, tourism), with a land lease term of 50 years, the rental fee should be calculated at about 40 - 50% of the land value according to the annual land price list.
Experts and businesses recommend that localities should summarize, evaluate and review the impacts of the issued adjusted land price list. Substantially consulting the opinions of businesses in the process of building a new land price list applied from January 1, 2026, so that the new land price list is truly transparent, harmonious with benefits, creating conditions for businesses to access and use land effectively, promoting economic development and contributing to ensuring social security, especially in difficult times, needing more resources to recover and contributing to promoting economic growth.
