In a recent submission to the draft amendment decree to Decree No. 103/2024/ND-CP on land use and land rental fees, the Ho Chi Minh City Real Estate Association (HoREA) highlighted the case of Company R. as a stark example of the impact of soaring land rental costs.
Specifically, the company rents a 11,000 sq. m warehouse in the Khanh Hoi Port area of Ho Chi Minh City. In 2022, their land rental expense was 3.3 billion VND. This figure surged to 7.7 billion VND in 2023.
However, the real shock came in the projected costs for 2025, with land rental fees skyrocketing to nearly 21 billion VND. This represents a 6.36-fold increase compared to 2022 and a 2.7-fold jump from 2023. The direct cause of this surge is the application of a new land price framework, which pushed the land rental price to over 1.9 million VND per sq. m.
HoREA warns that the inevitable consequence of these rising costs will be increased logistics expenses, leading to higher prices for goods and services, ultimately undermining the competitiveness of the entire economy.
To address this situation, HoREA proposes halving the ceiling of the current rate framework from 0.25-3% to 0.25-1.5%. They argue that the current 3% ceiling creates a psychological barrier, discouraging local authorities from setting lower rates. Reducing the ceiling would provide legal grounds for them to confidently establish rates that are more aligned with practical realities.
 Ho Chi Minh City Real Estate Association has urgently recommended that the government alleviate the land rental fee framework to support businesses. Photo: QH |
It’s not just businesses renting land that are affected. Developers with long-delayed projects in the land use fee calculation stage are also facing a massive burden. This includes a supplementary collection of 5.4% per year for the delayed period. HoREA illustrates this with an example: a project with a land use fee of 100 billion VND could end up paying an additional 162 billion VND if delayed for 30 years, exceeding the original fee.
Attributing the delays to the responsibility of state agencies rather than the businesses, HoREA suggests drastically reducing this supplementary rate from 5.4% to 0.5% per year.
QUANG HUY
– 19:48 08/05/2025
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