The Finance Ministry has proposed increasing land rental rates as partof a draft decree on land rental, water surface rental and land use feesthat will likely be submitted to the Prime Minister next month.
Theland rental rate currently ranges from 0.25 to two percent of the landprice, depending on what the land is used for and any investorincentives that the province or city offers.
However, under theproposal, the rent would start at one percent of the land price. Ratesin urban areas, commercial or transport hubs and crowded residentialareas could reach three percent of land prices.
At a meeting inthe capital on March 3, representatives from Hanoi and northern Bac Ninhprovince's Finance Departments said that the increased rent wouldburden enterprises, especially during the current economic slowdown.
Ata similar meeting in Ho Chi Minh City last month, representatives fromthe southern provinces of Long An and Khanh Hoa said increasing rentcould raise land prices.
The minimum rent increased from 0.25percent in 2005 to 0.75 percent in 2010, and the land price went up10-15 times as a result, they pointed out.
Chairman of HCM CityReal Estate Association Le Hoang Chau said that land prices in the citywere so high that they depressed investors.
"To get land foroperations, investors mostly pay compensation based on market prices,which are much higher than those imposed by local authorities. They alsohave to pay land rental based on future land prices, meaning they paytwice for the same land plot," he said.
Deputy Director of theHCM City Finance Department Ta Quang Vinh suggested that rental rates bebased on what the land was used for.
It should also be madeclear when the land rental rate was based on the land price frame andwhen it was lowered by the provincial People's Committee as anincentive, he added.-VNA
Theland rental rate currently ranges from 0.25 to two percent of the landprice, depending on what the land is used for and any investorincentives that the province or city offers.
However, under theproposal, the rent would start at one percent of the land price. Ratesin urban areas, commercial or transport hubs and crowded residentialareas could reach three percent of land prices.
At a meeting inthe capital on March 3, representatives from Hanoi and northern Bac Ninhprovince's Finance Departments said that the increased rent wouldburden enterprises, especially during the current economic slowdown.
Ata similar meeting in Ho Chi Minh City last month, representatives fromthe southern provinces of Long An and Khanh Hoa said increasing rentcould raise land prices.
The minimum rent increased from 0.25percent in 2005 to 0.75 percent in 2010, and the land price went up10-15 times as a result, they pointed out.
Chairman of HCM CityReal Estate Association Le Hoang Chau said that land prices in the citywere so high that they depressed investors.
"To get land foroperations, investors mostly pay compensation based on market prices,which are much higher than those imposed by local authorities. They alsohave to pay land rental based on future land prices, meaning they paytwice for the same land plot," he said.
Deputy Director of theHCM City Finance Department Ta Quang Vinh suggested that rental rates bebased on what the land was used for.
It should also be madeclear when the land rental rate was based on the land price frame andwhen it was lowered by the provincial People's Committee as anincentive, he added.-VNA
