[Avison Young Vietnam] 2024 Land rent cuts proposed to support business health

The National Assembly Economic and Financial Committee has submitted a draft

decree on reducing land rental. The draft, handed to the National Assembly

Standing Committee, is expected to be enacted by the government, pending

approval.

Late last year, the government assigned the Ministry of Finance to build the draft

decree. The aim is to provide more support for businesses and individuals to

cope with issues, and at the same time to support organisations and individuals in

localities affected by natural disasters and climate change.

Article 3 of the draft decree stipulated that the reduction of land rental is 30 per

cent of the total land rental paid in 2024. This decrease in land rental is calculated

on the amount of land rental paid in 2024 according to the law. It shall not be

applied to the outstanding land rental amount of years prior to 2024 and late

payment fees, if any. If the land user is entitled to a reduction in land rental

according to regulations or/and is enjoying a deduction for compensation and site

clearance money according to the law on land rental, the land rental reduction

shall be calculated on the amount of land rental paid (if any) after being reduced

or/and deducted according to the law.

In order to benefit from such a reduction, land users shall have to submit to the

tax agency a dossier, which includes their request for land rental reduction under

a form. They shall be responsible before the law for the truthfulness and accuracy

of the information and their request.

Read More here: https://vir.com.vn/land-rent-cuts-aim-for-positive-impact-on-business-health-125111.html

Commenting on the proposed policy, David Jackson – Principal and CEO,

Avison Young Vietnam said:

“The 30% land rent reduction in 2025 applies to public land leased by the

government to businesses for investment, development, and operations. First

implemented in 2020 to support businesses during the Covid-19 pandemic, this

policy has been extended annually. While not new, it remains a crucial measure to recover production, stimulate business activities, and inject cashflow into the

economy.

For businesses, households, and individuals paying annual land rent, this

reduction eases financial pressure, enabling them to maintain and expand

operations. Particularly amid ongoing global trade tariff issues, the policy provides

real estate investors with added stability and strategic planning advantages.

However, with local governments implementing new land pricing frameworks

under the 2024 Land Law, the impact of this reduction varies by province.

Ensuring a balanced and competitive real estate market requires thoughtful policy

implementation and a long-term vision, allowing businesses and investors to plan

effectively for sustainable growth in Vietnam.”