The National Assembly Economic and Financial Committee has submitted a draft decree on reducing land rental. The draft, handed to the National Assembly Standing Committee (NASC), is expected to be enacted by the government, pending approval.

Land rental reduction could help enterprises save costs and boost economic growth in the long run, photo Le Toan

The aim is to provide more support for businesses and individuals to cope with issues, and at the same time to support organisations and individuals in localities affected by natural disasters and climate change.

Late last year, the government assigned the Ministry of Finance (MoF) to build the draft decree. The seven-article draft shall benefit land users who are directly leased land by the state under a land lease decision or a land lease contract or a land use right certificate, ownership of property affixed to land of a competent state agency in the form of annual land rental payment that was in effect in 2024.

Article 3 of the draft decree stipulated that the reduction of land rental is 30 per cent of the total land rental paid in 2024.

According to a governmental document submitted to the NASC early this month, this decrease in land rental is calculated on the amount of land rental paid in 2024 according to the law. It shall not be applied to the outstanding land rental amount of years prior to 2024 and late payment fees, if any. If the land user is entitled to a reduction in land rental according to regulations or/and is enjoying a deduction for compensation and site clearance money according to the law on land rental, the land rental reduction shall be calculated on the amount of land rental paid (if any) after being reduced or/and deducted according to the law.

In order to benefit from such a reduction, land users shall have to submit to the tax agency a dossier, which includes their request for land rental reduction under a form. They shall be responsible before the law for the truthfulness and accuracy of the information and their request.

Moreover, the dossier must also include a copy of the land lease decision or a land lease contract or rights certificate, and ownership of assets affixed to land issued by a competent state agency. The deadline for the dossier submission is May 31.

The MoF’s Department of Taxation has calculated that this land rental reduction will be valued at around VND4 trillion ($160 million), or 0.26 per cent of the state budget revenue per year, and 9 per cent of total state budget revenue from land rental payment per year.

At a December conference on reviewing tax work in 2024 and implementing related tasks in 2025, the department reported that the total state budget revenue in 2024 managed by the tax authority was estimated at VND1.732 quadrillion ($69.28 billion), equivalent to 116.5 per cent of the estimate (exceeding VND245.587 trillion or $9.82 billion), up 113.7 per cent as compared to the realised figure in 2023.

“Thus, the budget revenue estimate for 2024 has been achieved and exceeded. So, the land rental reduction under this policy does not significantly affect the state budget revenue in general, but it will have a great impact on the recovery and development of production and business of organisations, individuals, households, and businesses,” stated Deputy Minister of Finance Bui Van Khang. “It will help increase budget revenue from taxes, such as personal income tax and corporate income tax, to compensate for the decreased revenue caused by the reduction in land rental.”

Over past years, such a reduction has also been applied to assist enterprises. The government reported that the amount of land and water surface rental reduced according to the prime minister’s decisions for 2020-2023 was VND2.89 trillion ($115.6 million). The average sum for 2021-2023 came in at VND3.734 trillion ($149.36 million).

“This has contributed to supporting businesses, organisations, units, households, and individuals in overcoming difficulties caused by the impact of the COVID-19 pandemic so that they could soon recover production and business activities,” the government document read.

The MoF has also proposed that the government consider and consult the NASC on the development of a governmental decree on the reduction of land rental for the following years under the authority prescribed in the Law on Promulgation of Legal Documents in case of necessity.

Troy Griffiths, deputy managing director Savills Vietnam The draft decree includes seven articles that shall benefit land users who are directly leased land by the state under a land lease decision, contract, or rights certificate, with ownership of property affixed to land of a competent state agency in the form of annual land rental payment that was in effect in 2024. Of this, the draft decree stipulated that the reduction of land rental is 30 per cent of the total land rental paid in 2024. Whilst still at an early stage of discussion, these are tremendous policy initiatives, aimed at pursuing economic growth and social reform. They are in concert with a raft of proposals around social housing that is a priority and will allow more economically feasible development to boost this much needed asset class. Other land issues remain under discussion, but the overall theme is to reduce the capital burden of leaseholders, as well as incentivise certain industries and make land recovery fairer. If leaseholders have rental concessions, then they have greater capital to invest in other areas. In agriculture this may be machinery, stock, or seed. In industry property, it may be plant and equipment or factories. Freed of the cost associated with their leasehold, then investment into growth improvements can occur. David Jackson, CEO, Avison Young Vietnam The reduction would apply to public land leased by the government to businesses for investment, development, and operations. First implemented in 2020 to support businesses during the pandemic, this policy has been extended annually. While not new, it remains a crucial measure to recover production, stimulate business activities, and inject cash flow into the economy. For businesses, households, and individuals paying annual land rent, this reduction eases financial pressure, enabling them to maintain and expand operations. Particularly amid ongoing global trade tariff issues, the policy provides real estate investors with added stability and strategic planning advantages. However, with local governments implementing new land pricing frameworks under the 2024 Land Law, the impact of this reduction varies by province. Ensuring a balanced and competitive real estate market requires thoughtful policy implementation and a long-term vision, allowing businesses and investors to plan effectively for sustainable growth in Vietnam. Nguyen Thi Bich Ngoc, founder and CEO Senvang Group The policy of a 30 per cent land rent cut for 2024 is a significant financial support measure that helps ease cost pressures for real estate businesses, particularly those leasing land from the state for development. With lower input costs, firms can better manage their cash flow, enhancing their competitiveness and enabling more reasonable sales and rental price adjustments. This will support companies in a market still facing many challenges such as high interest rates, low liquidity, and substantial cost pressures. Furthermore, this policy stimulates investment, particularly in the industrial real estate sector, a segment with high demand and significant potential. Reducing land costs may also encourage new project development, increasing supply, stabilising property prices, and attracting additional foreign direct investment. Despite its advantages, this policy is unlikely to have a lasting effect. Not all businesses will benefit, particularly those that own land or have long-term leases with pre-paid contracts, since the policy will only take effect in 2025. Additionally, its impact is not as significant as the land rent exemption and reduction policies from previous years. To maximise its effectiveness, complementary measures like legal reforms, credit support, and long-term policies are needed to create a more stable business environment for companies.

As CapitaLand Development’s first large-scale housing development in Binh Duong New City, Sycamore has quickly affirmed its strategic role, drawing both homebuyers and investors with its distinctive value proposition.

Orchard Heights offers a modern, sustainable living experience where natural elements blend seamlessly with high-end amenities. With the message “Live the full adventure,” the project targets those who enjoy exploration, new experiences, and vibrant daily living.

Orchard Heights is located at the gateway to Binh Duong New City (Photo: Sycamore)

Situated at the gateway to Binh Duong New City, Orchard Heights features ceramic sculptures in warm terracotta tones, celebrating local craftsmanship and the heritage of the region’s pottery traditions. A multi-dimensional green space—complete with hanging gardens, landscaped zones, and the internal swimming pool—creates the feeling of a tropical oasis within the urban core.

The development includes nine themed facilities designed to meet residents’ needs while inspiring a spirit of discovery. Each amenity is thoughtfully designed to reflect the project’s adventurous spirit and CapitaLand Development’s commitment to crafting exceptional living environments.

The Blue Sea Banquet Hall is for cosy parties, a place to entertain family and friends on every occasion. (Photo: Sycamore)

Orchard Heights offers 436 units, including two- and three-bedroom apartments, duplexes, and penthouses, ranging from 75 to 311 sq.m. All units are designed to optimise ventilation and natural light, enhancing comfort and wellbeing.

Of particular note, Orchard Heights is the only project in the area to feature duplex units (130–161sq.m) and four exclusive apartments with balconies directly connected to the swimming pool.

CapitaLand Development also introduced its three-bedroom model apartment—an ideal layout for modern young families. The unit maximises space, light, and airflow to create an open and comfortable living environment.

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The US Federal Reserve decided to keep its benchmark interest rate unchanged but indicated that rate cuts could be implemented later this year.

The SBV has raised the daily fixing and upper forex ceiling rate, photo Le Toan

State Bank of Vietnam (SBV) Deputy Governor Dao Minh Tu reaffirmed that with foreign exchange reserves, a positive export outlook, foreign investment inflows, and remittances, he remains confident in maintaining exchange rate stability.

“There is no need for individuals to hold foreign currency at home or in accounts. Sell it to the banks with confidence,” said Tu.

Taking a more cautious stance, UOB Singapore, noted that the VND hit a record low of around 25,600 VND/USD in early March after the SBV raised its USD selling price for banks, marking its first adjustment since October last year.

“The trend still leans towards further VND depreciation due to uncertainties related to China’s growth and tariff policies. There is a risk that the United States will impose tariffs on Vietnamese goods as Vietnam’s trade surplus with the US continues to rise significantly. However, strong domestic growth prospects and the SBV’s commitment to exchange rate stability could help ease depreciation pressure,” the UOB research team said.

In its Foreign Exchange Outlook report released last week, MUFG Bank raised its Q4 USD/VND projection to 25,900 from 25,700, reflecting the government’s focus on supporting growth and a higher tolerance for inflation at 5 per cent in 2025.

“The SBV has also raised the daily fixing and upper foreign exchange ceiling rate, allowing greater foreign exchange volatility. This coincides with major changes in Vietnam’s government policy, which could cut and streamline anywhere from 4-20 per cent of public sector employees, while authorities plan around 1.5 per cent of GDP in social support measures to aid the transition.”

Regarding the full-year exchange rate outlook, MUFG Bank forecasts USD/VND to approach 26,000 in 2025, charting a modest path while acknowledging other offsetting structural factors.

“While we continue to expect Vietnam to be in the crosshairs of the new US administration due to its large and growing trade surplus with the US, we highlight several reasons for optimism,” stated the report.

“Firstly, Vietnam has expanded its global export market share, not just in the US but worldwide, since the trade war began. Secondly, the country is moving up the value chain, increasing domestic value-added and export complexity. Lastly, we anticipate the US tariffs on China to remain higher and rise at a faster pace than those on Vietnam under the US administration.”

According to the National Statistics Office, Vietnam recorded its first trade deficit since May 2024 in February, with imports surging by 40 per cent year-over-year. Meanwhile, the State Treasury conducted three rounds of USD purchases from commercial banks, totalling $500 million, further tightening foreign exchange liquidity and adding pressure on the exchange rate.

“In this context, SBV has intervened by continuously raising the central exchange rate, widening the foreign exchange trading band,” said Tran Thi Khanh Hien, head of Research at MB Securities. “Since the start of this month, the central rate has increased by over VND400, equivalent to a 1.6 per cent adjustment, substantial compared to the VND487 rise for the whole of 2024. Additionally, the SBV has abandoned its previous hard cap of 25,450 VND/USD in the interbank market. This move signals that the SBV is accepting greater exchange rate volatility to reduce pressure on foreign exchange reserves.”