Proposal to reduce land use fees, avoid creating a burden for people and businesses

Phan Anh |

Considering that many provisions in the draft amendment to Decree 103/2024/ND-CP are still a burden, HoREA has proposed to drastically reduce land use fee and land rent collection.

Proposal to sharply reduce land use fee collection

In Clause 1, Article 8 of current Decree 103/2024/ND-CP, land use fees when converting land use purposes to residential land for households and individuals are calculated at 100% of the value difference, regardless of whether within or outside the residential land limit. The draft revised the proposal to reduce to 30% for the section within the limit and 50% for the section exceeding the limit.

Although welcoming this improvement, HoREA believes that the collection rate is still too high, causing financial pressure on people, especially in cases of applying for land use right certificates. The Association proposes a more reasonable rate of 20% for the area within the limit and 30% for the part exceeding the limit.

Sharing with Lao Dong reporter, HoREA Chairman Le Hoang Chau cited a case of a household asking to change the purpose of using 300m2 of land (of which 50m2 exceeded the limit) from perennial land to residential land in an area with a land price of 11 million VND/m2. If according to the current level, the amount to be paid is 3.12 billion VND. According to the proposal of the Ministry of Finance, it is 1.04 billion VND, while if the level proposed by HoREA is applied, there will be only 676 million VND - down nearly 80% compared to the old level, more reasonable for people's income and financial capacity.

HoREA kien nghi dieu chinh chinh sach dat dai de giam ganh nang tai chinh. Anh: Phan Anh
HoREA proposes adjusting land policies to reduce financial burdens. Photo: Phan Anh

Proposal to reduce additional fees for cases of late determination of financial obligations

Regarding the regulation on the amount of money that land users must pay additional due to slow determination of financial obligations (according to Point d, Clause 2, Article 257 of the 2024 Land Law), the draft currently stipulates a rate of 5.4%/year, the Ministry of Finance proposes to reduce it to 3.6%/year. However, HoREA believes that this level is still too high and unreasonable as the main responsibility belongs to state agencies.

HoREA proposes " Option 3": only calculate 0.5%/year for the period not including land use fees or land rent. This level will help avoid increasing housing prices and real estate rental prices due to increased input costs, while properly reflecting the principle of "people's compensation", especially for projects that have been behind in determining financial obligations for a long period of 10 to 30 years.

For example, a project has been allocated land since 1995 but will not have determined a land use fee of VND 100 billion until 2025, if applying 5.4%/year, an additional amount of VND 162 billion will arise - 1.6 times higher than the main obligation. Meanwhile, if the rate is applied to 0.5%/year, it will only have to pay an additional 15 billion VND.

disagree with blaming businesses

HoREA believes that determining who is at fault in cases of slow determination of financial obligations is almost impossible due to the need to review thousands of projects that have lasted for decades. Meanwhile, according to the 2024 Land Law, the responsibility for determining financial obligations belongs to state agencies.

Enterprises are only considered "faulty" if they are late in paying after having a specific notice of obligation. Therefore, the additional revenue level needs to be adjusted appropriately, not increasing the cost and selling price of products on the market.

Proposal to reduce the annual land rental rate

Regarding land rental prices, HoREA proposed to amend Point a, Clause 1, Article 26 of Decree 103/2024/ND-CP, reducing the percentage framework for calculating land rental prices from 0.253% to 0.251.5%. According to the Association, many localities do not dare to apply a rate below 1.5% due to the high regulatory framework. This adjustment will help localities be more flexible in regulating land rental prices, in line with reality and avoiding creating "coste shocks" when applying the adjusted land price list from August 1, 2024.

In fact, in Ho Chi Minh City, the warehouse rental price in the Khanh Hoi Port area of a logistics enterprise has increased from 3.3 billion VND (in 2022) to more than 21 billion VND (in 2025) due to the increase in land rental prices by more than 6 times after the new land price list took effect. This causes warehouse rental prices to increase, directly affecting logistics costs and commodity prices.

HoREA believes that if the amendments are accepted, it will help remove many bottlenecks in land law, ensuring fairness for people and businesses. At the same time, it creates conditions for stabilizing housing prices and real estate rental prices and supporting the market to recover and develop sustainably in the context of many economic challenges.

Phan Anh
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