Slow calculation of land use fees when costs increase sharply
Recently, the Ho Chi Minh City Department of Finance said that on August 20, 2025, it received a document from Lotte Properties HCMC Company Limited regarding the termination of the contract to implement the Smart City project (Thu Thiem Eco Smart City) in functional area 2A, Thu Thiem New Urban Area.
The Thu Thiem Eco Smart City Smart Complex project is invested by Lotte Properties HCMC Company Limited under Lotte Group (Korea), located in the most prime location in Thu Thiem. The project has a total investment of VND 20,100 billion.
However, due to the impact of the inspection process and some legal problems, after 8 years since signing the investment contract and 3 years since the groundbreaking ceremony, the Thu Thiem Eco Smart City project has not yet taken shape. The project has been stalled, which has led to a significant increase in land use fees, land rents and total investment costs.
On July 8, 2025, the Department of Agriculture and Environment of Ho Chi Minh City informed about the Thu Thiem Eco Smart City project with an approved land price of VND 16,190 billion. During the implementation process, Lotte Properties HCMC has proposed to the Ho Chi Minh City People's Committee many issues such as: adjusting the total investment to 57,000 billion VND; changing the composition and capital contribution ratio between Lotte Group's subsidiaries in the consortium; extending progress and removing legal obstacles.
According to Lotte Properties HCMC Company Limited, when the petitions have not been resolved, the company receives a notice of payment of land use fees and land rents from the City Tax Department, arising financial obligations for land use fees. And if the investor's recommendations are not approved, it will be impossible to continue implementing the project.
It is necessary to soon have solutions to overcome difficulties for businesses
The above is a typical example of the suffering of businesses with projects that cannot be implemented due to "confidence" in calculating land use fees. Many projects have even been completed but cannot be put into sale because they have to wait for the completion of financial obligations related to land use fees.
The approval of land prices takes a long time, it can take up to several years, even decades, not only causing stagnation, but also increasing costs for businesses, because during the time waiting for valuation, businesses still have to bear interest costs and opportunity costs.
For projects that were previously subject to the temporary calculation of land use fees, businesses continue to face great challenges with additional payables, leading to the risk of losses.
Recently, the Ho Chi Minh City People's Committee sent a document to Deputy Prime Minister Tran Hong Ha and the Minister of Agriculture and Environment proposing to apply the K coefficient to land valuation and remove obstacles for nearly 100 real estate projects.
The Ho Chi Minh City People's Committee said that Article 63 of Decree 102 stipulates the determination of land prices according to the land price adjustment coefficient (coefficient K) method for land allocated or leased by the State before the 2013 Land Law. In fact, there are currently nearly 100 real estate projects applying specific land price determination in Ho Chi Minh City according to the above regulations.
However, due to the time of determining specific land prices in the past (before the 2013 Land Law), it was too long, so there were many difficulties in collecting old information as a basis for organizing specific land price determination and it was almost impossible to do so.
The Ho Chi Minh City People's Committee also emphasized that the deadlock in organizing specific land prices has become a bottleneck in the socio-economic development process of Ho Chi Minh City as well as the urban development process in the whole country in general. Up to now, hundreds of real estate projects in the city are in a state of freezing or temporarily suspending further legal procedures, causing many consequences.
Experts say that inadequacies related to land use fees not only waste land resources, causing economic losses to both businesses and customers but also negatively affect both the real estate market and the economy.
Land use fee costs are accounting for a large part of real estate costs. When costs arise, investors will be forced to consider adjusting real estate prices higher, making it difficult for the majority of people to access housing.
