Ministry of Finance proposes a series of policies to exempt and reduce land use fees and land rents.

Currently, the Ministry of Finance is urgently seeking comments on the draft Decree regulating cases of exemption and reduction of land use fees and land rents as prescribed in Clause 2, Article 157 of the Land Law and amending and supplementing a number of related contents in Decree 103/2024/ND-CP and Decree 104/2024/ND-CP of the Government.

According to the Ministry of Finance, the issuance of the new Decree aims to specify the provisions of the 2024 Land Law and at the same time resolve problems arising in the implementation of current regulations on land use fees, land rents and land development funds.

The draft Decree proposes to exempt land use fees in two cases. The first is to exempt land use fees for the land area allocated within the land allocation limit for resettlement or allocated to households and individuals in residential clusters and lines in flood-prone areas (according to the Prime Minister's decision on adjusting and supplementing the subjects and loan mechanisms for housing construction under the program for building residential clusters and lines and housing in areas frequently flooded in the Mekong Delta).

Second, land use fees are exempted for the land area allocated within the residential land allocation limit for fishing households and people living on rivers and lagoons who move to resettle in resettlement areas and points according to planning, plans and projects approved by competent authorities.

In addition, the draft Decree also provides many regulations on exemption and reduction of land rent, focusing on priority subjects and sectors. Specifically, land rent is exempted for the entire lease term in cases of using land to build headquarters of Social Policy Banks at all levels and headquarters of the Vietnam Development Bank, provided that these banks operate not for profit. And, land rent is exempted and reduced for the area of ​​houses and land for foreign affairs assigned to the unit assigned to directly manage houses and land for foreign affairs for lease to foreign organizations with diplomatic functions and foreign offices under the State's special preferential policies.

The important highlight of the draft is the incentives for enterprises investing in agriculture and rural areas. Accordingly, enterprises with investment projects in agriculture and rural areas will be exempted from land rent during the basic construction period for preferential investment agricultural projects and encouraged investment agricultural projects. Accordingly, preferential investment agricultural projects are exempted from land rent (after the exemption period of land rent for the basic construction period) for 15 years and have 50% reduction in land rent for the next 7 years. Encouraged investment agricultural projects are exempted from land rent for 11 years and have 50% reduction in land rent for the next 5 years. Small and medium-sized agricultural enterprises are exempted from land rent for 5 years and have 50% reduction in land rent for the next 10 years.

The list of agricultural projects with special investment incentives and agricultural projects with investment incentives, agricultural projects with investment incentives and newly established small and medium-sized agricultural enterprises will be implemented according to the Government's regulations on mechanisms and policies to encourage enterprises to invest in agriculture and rural areas.

In addition, regulations on exemption and reduction of land rent for cases where the State leases land and pays annual land rent for the purpose of agricultural, forestry, aquaculture, and salt production, but is affected by natural disasters or fires, the reduction or exemption level will depend on the rate of output loss.

In addition, 50% reduction in land rent for cases where the State leases land and pays annual land rent for production and business purposes (except for projects using land for agricultural, forestry, aquaculture, and salt production purposes) but must temporarily suspend operations to overcome consequences due to natural disasters, fires, or force majeure.

The new regulation will exempt or reduce land rent for units employing ethnic minorities legally residing in provinces, centrally-run cities and districts that enjoy support policies according to the Prime Minister's decision. And, exempt or reduce land rent for cases where the State leases land and pays annual land rent for production and business purposes using disabled workers.

Based on the actual conditions of the locality, the Provincial People's Committee shall submit to the People's Council of the same level for decision on specific land rent exemption and reduction levels for socialized establishments with socialized projects approved by competent State agencies.