Land rent skyrockets 300-400%, tourism businesses in dire straits

Mr. Ho Ky Minh, Vice Chairman of the People's Committee of Da Nang City, along with leaders of departments, agencies and sectors, on October 11 inspected a number of coastal land lease projects in the area.

At the Melia Da Nang Tourist Area Project, Mr. Nguyen Manh Trung, the investor, reflected that the construction part of this project only occupies a very small area, the rest is landscape, trees, and internal roads. However, the investor must pay rent for all land area, at the price of commercial and service land.

In addition, according to regulations, land rent will be adjusted every 5 years. However, the most recent adjustment increased land rent so much that businesses were on the brink of bankruptcy.

Mr. Trung said that in the 2017-2021 period, his company had to pay more than 7 billion VND/year in land rent, but in the 2022-2026 period, the land rent increased sharply to more than 27 billion VND/year.

Mr. Nguyen Manh Trung (in black shirt) said that businesses are facing difficulties due to high land rent.

According to the investor, in the year of the Covid-19 pandemic, the company had a revenue of 1 billion VND but the land rent was 7 billion. In 2022, the company closed for half a year, with a revenue of 36 billion VND, land rent of 27 billion VND, accounting for 70%. While the Government supported businesses by reducing land rent by 30% and allowing late payment, the locality increased it by 300-400%.

To have money to pay, Mr. Trung had to sell his house and assets accumulated over many years, because if he paid late, the company would be forced to pay and have its account frozen.

According to Mr. Trung, if the city does not fix land rental prices, many businesses will continue to close, go bankrupt, and workers will lose their jobs and face more difficulties.

"Da Nang's land prices are too high and businesses have been petitioning for many years but have not received any response. The city needs to re-evaluate land prices to support businesses, and not let this beautiful stretch of coastline become deserted," Mr. Trung suggested.

At the Ariyana Danang Resort Complex Project, Mr. Le Minh Kha, the investor representative, also shared that the area of the project that must pay annual land rent is about 22 hectares. The land rent is calculated according to the Vo Nguyen Giap road coefficient, the project currently has to pay more than 120 billion VND/year, an increase of more than 30 billion VND compared to 2018 and 2019.

At the Ariyana Danang Resort Complex Project, land rental prices increased by more than 30 billion VND.

According to Mr. Kha, in the current situation, land rent is a burden for businesses when apartment, villa, and conference center projects - which generate the main cash flow - are not enough to pay the land rent.

Therefore, Mr. Kha proposed that the Da Nang government establish unit prices according to land use functions. At the same time, it proposed to consider issuing land rental prices suitable for coastal projects because of the specific land use and very low construction density compared to neighboring areas.

At the inspection, Vice Chairman of Da Nang City People's Committee, Mr. Ho Ky Minh acknowledged the recommendations and shared the difficulties that businesses are facing.

He requested departments and branches to research and propose solutions to the City Party Committee, People's Council and People's Committee in accordance with legal regulations.

“The leaders of Da Nang City will have a meeting to listen to the voices of local businesses on this issue. If necessary, we will have separate meetings with each business. Any issues under Da Nang's authority will be resolved by the city, and any issues beyond its authority will be reported and recommended to higher authorities,” said Mr. Minh.

Previously, tourism businesses in the coastal areas of Son Tra and Ngu Hanh Son districts sent a collective petition to the City Party Committee, People's Council, and People's Committee of Da Nang City, complaining about excessively high land rents.

In the petition, the enterprises made three recommendations, including: allowing enterprises to continue renting land at the price frame before 2020; The People's Council and People's Committee of Da Nang City proposed that the National Assembly and the Government not adjust the land rental price increase during the period affected by the Covid-19 pandemic (2020-2023) and that the enterprises' accounts not be frozen, and their assets not be seized due to land rental debt due to the impact of the land price increase of up to 300-400%.

Based on the petition of the enterprise, the leaders of the People's Committee of Da Nang City assigned the Department of Natural Resources and Environment to advise the leaders of the People's Committee to establish a team to inspect some coastal land lease projects in the area.

The Department of Natural Resources and Environment of Da Nang presides over and coordinates in providing complete and accurate information on land prices and policies and solutions that have been implemented to support businesses as well as solutions in the coming time to inform people and businesses in the area.

Source: https://vietnamnet.vn/tien-thue-dat-tang-phi-ma-300-400-doanh-nghiep-du-lich-dieu-dung-2200761.html