Draft proposal reverses course on land use fees, raising concerns among businesses

Proposal to Remove Obstacles in the 2024 Land Law

The Ho Chi Minh City Real Estate Association (HoREA) has submitted feedback, proposing to retain and supplement certain key provisions in the 2024 Land Law draft to address practical obstacles and transform land resources into a driving force for socio-economic development.

Specifically, HoREA recommends that the Ministry of Agriculture and Environment retain the provision in Clause 26, Article 1 of the Land Law Draft (dated July 28, 2025) regarding the amendment and supplementation of Point d, Clause 2, Article 257 of the 2024 Land Law. This provision aims to abolish the unreasonable regulation on “the additional amount that land users must pay for the period during which land use fees or land rent have not yet been calculated.”

According to HoREA, removing the proposed amendment and supplementation of Point d, Clause 2, Article 257 will cause many land-use projects to continue facing difficulties. In practice, there have been numerous cases where state agencies delayed issuing land use fee or land rent decisions, or supplementary decisions, resulting in heavy financial obligations for businesses.

Currently, based on Point d, Clause 2, Article 257 of the 2024 Land Law, Clause 1 of Article 50, and Clause 9 of Article 51 of Decree 103/2024/ND-CP, it is stipulated that: “The additional amount that the land user must pay… is calculated at a rate of 5.4% per year on the land use fees and land rent payable.” This regulation makes the supplementary payment very large, putting pressure on businesses and slowing down project implementation.

Currently, based on Point d, Clause 2, Article 257 of the 2024 Land Law, Clause 1 of Article 50, and Clause 9 of Article 51 of Decree 103/2024/ Government Decree , it is stipulated that: “The additional amount that the land user must pay… is calculated at a rate of 5.4% per year on the land use fees and land rent payable.” This regulation makes the supplementary payment very large, putting pressure on businesses and slowing down project implementation.

Project B was allocated land in 2005, but it was only in 2025 that the land use fee of VND 100 billion was notified. In addition to paying the VND 100 billion land use fee, the project must also pay an additional amount calculated as VND 100 billion × 5.4% per year × 20 years = VND 108 billion (equivalent to 1.08 times the original land use fee).

Project C was allocated land in 2015, and only in 2025 was the land use fee of VND 100 billion notified. In addition to paying the VND 100 billion land use fee, the project must also pay an additional amount calculated as VND 100 billion × 5.4% per year × 10 years = VND 54 billion (equivalent to 54% of the original land use fee).

Proposal to Retain Key Provisions in the 2024 Land Law

HoREA argues that the decision not to propose amendments to point d, clause 2, Article 257 of the Land Law is inconsistent with Clause 2, Article 55 of the 2025 Law on Promulgation of Legal Documents.

HoREA argues that point d, clause 2, Article 257 of the 2024 Land Law effectively has retroactive effect, applying to cases of land allocation or lease dating back to the 1993, 2003, and 2013 Land Laws. This results in land users having to pay additional amounts for periods in the past when land use or lease fees were not yet calculated.

According to HoREA, this regulation is inconsistent with the 2025 Law on Promulgation of Legal Documents, which prohibits retroactive application if it creates new legal obligations or increases existing liabilities. Therefore, this provision needs to be amended to avoid imposing unreasonable financial burdens on businesses and citizens.

HoREA argues that the provision at point d, Clause 2, Article 257 of the 2024 Land Law on collecting “supplementary payments” for periods during which land use fees or land lease fees were not calculated applies retroactively to land allocations and leases dating back to the 1993, 2003, and 2013 Land Laws—periods when such obligations did not exist. This effectively creates new and heavier legal liabilities, which is inconsistent with the principles of lawmaking.

According to Decree 103/2024/ND-CP, the supplementary payment is currently calculated at a rate of 5.4% per year on the land use or lease fee due. Although the Ministry of Finance proposed reducing this rate to 3.6% per year, HoREA argues that it remains too high and recommends lowering it to 0.5% per year. Their reasoning is that delays in issuing land price decisions or financial obligation notices are entirely the responsibility of the authorities, not the businesses. Companies should only face penalties if they fail to pay or delay payment after receiving the official notice.

HoREA also rejects the notion of “shared fault” between the state authorities and businesses, arguing that decisions on land pricing or approval of zoning adjustments fall entirely under state jurisdiction. Businesses cannot intervene in these processes unless there is misconduct or corruption.

Therefore, HoREA proposes retaining Clause 62, Article 1 of the draft Law, which suggested amending and supplementing the provision at point d, Clause 2, Article 257 of the 2024 Land Law as follows: The Government shall regulate the application of land valuation methods for the cases specified in points a, b, and c of this Clause.

Previously, Mr. Nguyen Quoc Hiep, Chairman of GP.Invest and Chairman of the Vietnam Construction Contractors Association, repeatedly expressed that the land use fees in such cases are unreasonable. The delay in paying land use fees is not the fault of the enterprises, yet they bear the consequences. We have submitted multiple recommendations, but the Ministry of Finance has not agreed. At the localities where we implement projects, authorities also recognize that this collection is unreasonable but cannot propose changes because they are the enforcing agencies.

Mr. Pham Duc Toan, General Director of EZ Property Joint Stock Company (EZ Property), stated that requiring enterprises to pay additional land use fees for projects whose land has not yet been valued is unreasonable both practically and legally.

“Some local authorities require businesses to complete land use fee payments before being granted construction permits. Land valuation is the responsibility of the state. Penalizing businesses for faults they did not commit is inappropriate,” Mr. Toản stated candidly.