Reduced commercial land rent, support services for businesses to overcome difficulties

Accordingly, the People's Committee of Da Nang City has just decided to reduce 10% of the land price issued in the land price list for commercial and service land; at the same time, add 2 coefficients to adjust land prices according to the depth of the land plot from over 150 m to 200 m and over 200 m (also known as the striping coefficient) in the direction of reducing 10-20% compared to before. This contributes to partially removing difficulties for businesses and investors when paying land rent from 2024 onwards.

*Leaders of Da Nang City People's Committee inspect and survey current commercial land prices in response to recommendations from coastal businesses.*

According to Decision No. 57/2023/QD-UBND dated December 15, 2023 of the People's Committee of Da Nang City on amending and supplementing land prices in the price list of land types in Da Nang City for the period 2020-2024, in general, the price list of land types for the period 2020-2024 on 3,614 basic road sections remains unchanged. The city only adjusted the land prices along the two newly upgraded and expanded roads, however, the commercial and service land prices have been reduced from 70% of the residential land price in the same location to 60%. For land plots with a depth of more than 100 m, the city will re-determine the land price adjustment coefficient to calculate land use fees (coefficient k) or also known as the striping coefficient to suit the reality.

The City People's Committee has also just issued Decision No. 58/2023/QD-UBND dated December 15, 2023 promulgating the land price adjustment coefficient applicable for 2024 in Da Nang city to determine specific land prices according to the land price adjustment coefficient method for cases such as the area for calculating land use fees of a land plot or land area with a value of less than 30 billion VND to determine land use fees, determine land rental unit prices, calculate the value of land use rights when equitizing state-owned enterprises, make the starting price for auctions, determine land rental unit prices to pay annual land rent...

*Da Nang reduces 10% of residential land prices issued in the land price list for commercial and service land.*

Both decisions will take effect from January 1, 2024. Deputy Director of the Department of Natural Resources and Environment of Da Nang City Tran Quoc Hung shared: Both of these regulations are reduced compared to before. Accordingly, a 10% reduction in residential land prices has been issued in the land price list for commercial and service land (reduced from 70% to 60% of residential land prices in the land price list). Projects with large land plot depths will have a coefficient k reduced by 0.1 for depths from over 150m to 200m; reduced by 0.2 for depths over 200m".

Previously, in recent years, when the land price list was raised to approach the market price (the time when land prices in Da Nang increased dramatically) and in the context of economic difficulties, many businesses in Da Nang sent "cry for help" because land rent was too high, in some places it increased by 400%.

Mr. Nguyen Manh Trung, General Director of Sao Viet Non Nuoc Company Limited (investor of Melia Danang Resort) said that businesses have petitioned about the high land rent since 2019, but after 4 years the city has adjusted it down. Through estimates, with the city's decision to reduce commercial and service land prices and land price adjustment coefficients, resort projects can have their annual land rent reduced by 30-50% compared to the present.

However, in the past time, due to the city's land price adjustment, the total annual land rent (2020-2023) increased by 300-500% compared to before, so with the city's decision to reduce land prices from 2024, the annual land rent to be paid is still 200% higher than before the current land price list.

Source