Many businesses in Ho Chi Minh City are worried that land rent will increase by billions of dong when Ho Chi Minh City applies the new land price list.Accordingly, when Ho Chi Minh City's new land price list takes effect from October 31, 2024 to the end of 2025, businesses will be affected by non-agricultural land use tax.
The payment rate for businesses is 0.15%/year of non-agricultural land use tax.However, this payment rate is still applied until the end of 2025 according to the provisions of the 2024 Land Law.This is the input cost of all production and business activities of businesses.
The second impact is land rent, when land rent increases, the price of premises will increase, affecting businesses.Annual land rent = Percentage (%) of land rent multiplied by (x) Land price for calculating land rent.In which, the percentage (%) of land rent for one year is from 0.25% - 3%.
According to the 2024 Land Law, the provincial People's Committee will issue appropriate rates.It is known that the Department of Natural Resources and Environment of Ho Chi Minh City, in coordination with the Department of Finance of Ho Chi Minh City, has drafted a land rental rate of 0.25% - 1%.
The general director of a forestry company in Ho Chi Minh City said that applying the new land price list will significantly increase the land rental costs of the company.Especially for commercial service land that is not residential land, land used for warehouse rental activities and land with low construction density, limited height or land located in the core area of the city.
For example, in the case of this company, it rented a plot of land with an area of over 1,200 m2 as an office on Truong Dinh Street, District 3, Ho Chi Minh City.According to the old land price list decision, the annual land rental fee that the company must pay to the city is more than 4.2 billion VND/year.According to the new land price list, the company must pay more than 6 billion VND in land rent, an increase of more than 30%.
Enterprises renting land in industrial parks are also facing many problems.In fact, many enterprises rented land before 2000 at very cheap prices.Perhaps at that time, to attract investors and hope to fill up industrial parks, the rent was only a few USD/m2, so many investors rented very large areas, up to tens of hectares.These investors are worried that after the new land price list is issued, will they have to pay additional land rent or will they enjoy the entire 50-year lease period?
In addition, there are enterprises that pay land rent annually, and there are enterprises that pay land rent once (50 years). However, from 2017-2018, there are many enterprises that want to invest and pay land rent but have not completed it yet, and have not been granted land use right certificates according to the term. The question here is whether in these cases, the land rent will be calculated according to the old land price list or the new land price list?
The Ho Chi Minh City Business Association (HUBA) has recently submitted a proposal to the Department of Finance, proposing that the rate (%) for calculating land rental prices for agricultural land groups be 0.25%.The high-tech park and software park groups be 0.3%.The non-agricultural production and business land group in region 1 is 0.5%, region 2 is 0.4% and region 3 is 0.3%.HUBA also proposed that the rate (%) for calculating land rental prices for commercial and service land groups in region 1 is 1%; region 2 is 0.75%; region 3 is 0.5%.
