Is there a choice of annual or one-time land rental payment?
I heard that the Land Law 2024 allows for the choice of land rental payment method. How is the right to choose the land rental payment method regulated?. A matter of concern for 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 rent payment, and this regulation may help businesses balance the financial resources that need to be allocated during their production and business operations.
Specifically, Article 30 of the 2024 Land Law stipulates the right to choose the form of land rent 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 and paying annual land rent but are in the case of being leased land by the State and paying land rent in one lump sum for the entire lease term according to the provisions of this Law may choose to switch to leasing land with one-time payment of land rent for the remaining lease term and must re-determine the land price to calculate land rent at the time of the decision to allow the switch to leasing land in the form of one-time payment of land rent for the entire lease term according to the provisions of 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 and paying land rent in one lump sum for the entire lease term may choose to switch to leasing land and paying land rent annually. The land rent paid will be deducted from the annual land rent payable according to Government regulations.
3. Public service units that are allocated land by the State without collecting 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 State land lease with annual land rental collection for that area.
Accordingly, the 2024 Land Law stipulates that in addition to being allowed to choose the form of land rent payment, changing the form of land rent payment from annual land rent payment to one-time land rent payment for the entire rental period, it also allows changing the form of land rent payment from one-time land rent payment for the entire rental period to annual land rent payment. And note that when switching to annual land rent payment, the paid land rent will not be refunded but will only be deducted from the corresponding annual land rent payable.