Is it possible to choose between paying the land rent annually or in a lump sum?
I heard that the 2024 Land Law allows for the choice of land lease payment method. How is this right to choose the land lease payment method regulated? This is a question from Ms. Phan Thi Minh (Thanh Chuong, Nghe An).
Reply:
The 2024 Land Law has been flexible in regulating the right to choose the form of land lease payment, and this regulation may help businesses balance the financial resources they need to allocate in their production and business operations.
Specifically, Article 30 of the 2024 Land Law stipulates the right to choose the form of land lease payment as follows:
1. Economic organizations, public service units, individuals, people of Vietnamese origin residing abroad, and economic organizations with foreign investment capital that are currently leasing land from the State with annual land rent payments, but fall under the category of those eligible for a one-time land rent payment for the entire lease period as stipulated in this Law, may choose to switch to a one-time land rent payment for the remaining lease period and must have the land price recalculated to determine the land rent at the time of the decision allowing the switch to a one-time land rent payment for the entire lease period as stipulated in this Law.
2. Economic organizations, individuals, people of Vietnamese origin residing abroad, and economic organizations with foreign investment capital that are currently leasing land from the State with a one-time payment of land rent for the entire lease period may choose to switch to annual land rent payments. The land rent already paid will be deducted from the annual land rent payable according to Government regulations.
3. Public non-profit organizations that have been allocated land by the State without payment of land use fees, but need to use part or all of the allocated area for production, business, or service provision, may choose to switch to the form of land leased from the State with annual rent payments for that area.
Accordingly, the 2024 Land Law stipulates that in addition to the option of choosing the form of land rent payment and changing the payment method from annual land rent to a lump-sum payment for the entire lease period, it also allows changing the payment method from a lump-sum payment for the entire lease period to annual land rent. It should be noted that when switching to annual land rent payments, the previously paid land rent will not be refunded but will only be deducted from the corresponding annual land rent payable.