Long-standing waiting to calculate land use fees
It can be said that for a long time, real estate projects have been very frustrated with the stage of determining land use fees for projects. This is a cumbersome, prolonged procedure and increases costs.
The leader of Anh Tu Company (HCMC) commented that in the past, land valuation for projects was very slow. A typical example is the project of this company in District 7 (old) after 7 years and 7 months, with nearly 200 documents of the State agency, which has just had results with an amount of about 513 billion VND. Because the project has not been valued for too long, the enterprise is in a difficult situation. The low-rise land has been sold to customers but because it cannot pay land use fees, it is impossible to build and issue pink books to home buyers, causing customers to file lawsuits everywhere. Meanwhile, the land planned to be used as high-rise apartments cannot be granted a construction permit. With no products for sale, the company has not had a source of income for many years.
A representative of Novaland said that this company has 13 projects that have been allocated land since 2015, 2016, but up to now, there has been no announcement from the tax authority, but there must be a notice before the enterprise can pay land use fees.
The Department of Agriculture and Environment of Ho Chi Minh City said that since the beginning of the year, Ho Chi Minh City has "unlocked" 9 projects, bringing in VND 52.599 billion in land use fees. At the same time, there are 2 projects waiting for the Land Valuation Council to approve, expected to add 4,168 billion VND in land rent.
Of the above 9 projects, there are a number of projects that bring in large revenues for the city budget such as the project of Lotte Group in Thu Thiem New Urban Area (16.190 billion VND), Can Gio coastal urban area project (27.317 billion VND)... The Department has also submitted to the City Land Valuation Council 2 projects, Thu Thiem observation Complex, about 4,000 billion VND and Song Viet urban area about 168 billion VND.
In the near future, the Department will submit 23 more projects with a total estimated revenue of VND 7,956 billion. In the first months of the year, Binh Duong and Ba Ria-Vung Tau regions (formerly) also approved 44 land plots with a revenue of VND 7,485 billion. Thus, it is expected that in 2025, the revenue from land prices of projects will be about 86,300 billion VND.
Speed up land valuation for businesses
Currently, the 2024 Land Law in effect has contributed to solving many problems for projects in many different periods. In particular, it will remove obstacles for projects in paying outstanding land use fees in Ho Chi Minh City.
In the draft Law amending and supplementing a number of articles of the 2024 Land Law that is being consulted, the Ministry of Agriculture and Environment proposes to remove the market element in primary land valuation. Instead, land prices will be issued by State agencies, through the land price list adjusted every 5 years or adjusted annually by coefficient K.
Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association - assessed that the proposal to apply the land price adjustment coefficient method to calculate land use fees for real estate and commercial housing projects if approved by the National Assembly will remove obstacles and difficulties in calculating land use fees and land rents in these projects.
The Ho Chi Minh City Institute of Natural Resources and Environment Economics has also recently proposed allowing businesses to calculate land use fees themselves based on the price list issued by the Provincial People's Committee. The tax authority only checks and settles before issuing a land use right certificate. If there is a surplus, the enterprise can be deducted to another project; if there is a shortage, it can submit additional.
Mr. Pham Viet Thuan - Ho Chi Minh City Institute of Natural Resources and Environment Economics - said that this mechanism is feasible because businesses have now self-declared and self-payed value added tax and personal income tax, so expanding to land use fees is feasible. If applied to land use fees, the procedures will be shortened, reducing the situation of thousands of billions of VND in arrears for many years.
The Institute also proposed to specifically stipulate in the Land Law the level of land use fee collection for each type of case. In which, if renting land, the amount to be paid annually is 0.5% of the land price announced by the locality; if allocated land, it is calculated according to the coefficient K determined by the locality; and when converting the land use purpose to residential land, the maximum collection rate is 30% of the land price. Cases of exemption or reduction in land use fees will apply according to the provisions of current decrees.
Incorporating these rates into the law will help provinces and cities implement immediately, without having to wait for appraisal results from councils or consulting units - which are often prolonged and easily cause gaps. This approach is expected to be more transparent, reduce cumbersome procedures and contribute to reforming the land sector, which has been considered complicated for many years.
