Land rent reduction, what level is appropriate?

To support businesses to restore production and business in 2025, the Ministry of Finance is proposing two options to reduce land rent for people and businesses, which are a 30% reduction in land rent or another reduction.

The Ministry of Finance proposed two support options, including a 30% reduction in land rent payable in 2025 - Photo: B.NGOC

Talking to Tuoi Tre about this proposal, many experts, real estate investment and business enterprises said that in the context of localities simultaneously increasing land prices towards approaching the market, the reduction in annual land rent should be between 30 - 50%.

Partially offset the increased cost of land rental

Discussing the policy of reducing land rent in 2025 being proposed by the Ministry of Finance, Mr. Nguyen Duc Lap - Director of the Institute of Real Estate Research and Training - said that the policy of reducing land rent proposed by the ministry is applied nationwide, while the level of adjustment to increase land prices in each locality is different.

This is an issue that needs to be considered in order to come up with an appropriate land rent reduction for each locality. According to Mr. Lap, in the context of many economic difficulties, the local adjustment of land prices is too high, in some places it is 2 or 3 times higher, in some places it is dozens of times higher, the 30% land rent reduction is not enough.

Meanwhile, according to Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association, the land rental prices that localities have approved in the past three years have increased significantly, with land prices in Ho Chi Minh City alone increasing twice. In addition, in 2024, when implementing the new Land Law, localities will simultaneously adjust the land price list upward.

"This also pushes up land rental costs. In fact, the percentage to calculate land rental prices is within the range of 0.25 - 3% of the land price list. In Ho Chi Minh City, the association has proposed calculating land rental fees from 0.25 - 0.5% of the land price list, but the city still maintains it at 0.5 - 1.5% of the land price list," said Mr. Chau.

Regarding the proposal to reduce land rent by 30% in 2025, Mr. Chau said that the ministry has accepted the opinions of the association and many other agencies. However, for the policy to be truly effective, the minimum reduction in land rent must be at 30%, so it is necessary to consider reducing land rent for businesses this year at a level from

30 - 50%, because the 30% reduction in land rent this year has not yet offset the increased land rent costs of businesses when applying the new land price list.

Both land use fees and land rents need to be reduced.

Lawyer Pham Thanh Tuan, Hanoi Bar Association, said that the 30% reduction in land rent for people and businesses is not new. This reduction has been applied from 2021 - 2024 to support people and businesses to have more resources, overcome difficulties, epidemics, and restore production.

Furthermore, it is also necessary to see that the recent adjustment of land price lists by localities towards market-oriented prices has not affected businesses and people who have decided to lease land and signed land lease contracts before the issuance of the new land price list.

"Only businesses and people who receive land lease decisions and sign land lease contracts after the new land price list is issued will be affected and have to pay land rent at a higher rate according to the new price list regulations," said Mr. Tuan.

This lawyer also said that according to Article 159 of the Land Law, enterprises and individuals renting land are allowed to use a stable rental price for five years and when the next land rental price is adjusted, the increase must not exceed the CPI increase announced by the Government every year.

Thus, the adjustment to increase the land price list does not greatly affect businesses and people who have rented land before the issuance of the new land price list.

However, businesses and people who rent land after the new land price list is issued will be greatly affected. According to lawyer Tuan, in addition to the proposal to reduce land rent in 2025, the Government is asking for opinions from the National Assembly Standing Committee to consider issuing a policy to reduce land use fees and land rent for businesses and individuals using land.

"If this policy is passed, it will support businesses and people more than the policy of reducing land rent. This policy will help both businesses and people reduce their land financial obligations when applying the new land price list towards approaching the market, while limiting unwanted impacts when applying the new land price list," he commented.

Ministry of Finance proposes 2 options to reduce land rent

In a recent document proposing a policy to reduce land rent in 2025 sent to ministries, branches and localities, the Ministry of Finance proposed two options to reduce land rent for people and businesses.

Accordingly, option 1 is to reduce 30% of land rent payable in 2025, option 2 is another reduction level according to specific proposals of relevant agencies. Commenting on this proposal of the Ministry of Finance, the Vietnam Federation of Commerce and Industry (VCCI) proposed a 30% reduction in land rent for businesses and people.

* Dr. NGUYEN QUOC VIET (Deputy Director in charge of the Institute for Economic and Policy Research, Vietnam National University, Hanoi):

Support policies need to have focus and key points.

In the current new conditions, support policies for the economy in general and for businesses in particular should be focused, have a focus, and connect supply-side support (support for business production activities) with demand support (support for bringing business products to consumers) which will be better than implementing widespread support policies that only focus on the supply side, over a long period of time.

It is necessary to re-evaluate current support policies to see which policies have a positive impact on business development, help shift the economic structure, have a spillover effect, create quality jobs, and bring income to workers. Only with support policies that achieve this goal can we continue to implement them, and at the same time, it is necessary to renew support policies in a focused, focused direction, activating the right points of the economy.

For example, policies to support exports, increase domestic value, and innovate technology have been very effective in recent times. As for support policies that are scattered and ineffective, they should be reduced.

Source: https://tuoitre.vn/giam-tien-thue-dat-muc-nao-phu-hop-20250213084848837.htm