Land rent is a major cost in many projects’ investment structures. Land law offers investment projects two incentives: land rent exemption (up to the entire lease term) and land rent reduction — with conditions tightly tied to the lists of incentivized industries and areas.
This article systematizes the conditions and procedures for land rent exemption and reduction for investment projects in 2026 under Decree 103/2024/ND-CP.
1. Legal framework: the 2024 Land Law and Decree 103/2024
The 2024 Land Law (Article 157) sets out cases eligible for land rent exemption and reduction where the State leases land. Government Decree 103/2024/ND-CP (issued 30 July 2024, effective 1 August 2024) details land use fees and land rents, replacing Decrees 45/2014, 46/2014, 135/2016, 123/2017, 35/2017 and 79/2019.
Note: dossiers still citing the old land-rent decrees as current authority are outdated.
2. Full-term exemption — special cases
Under Article 39 of Decree 103/2024/ND-CP, certain cases enjoy land rent exemption for the entire lease term, including: ethnic-minority households and individuals using agricultural production land; worker dormitory projects in industrial parks; dedicated railway infrastructure and railway industrial works; airport infrastructure; social housing for lease; PPP transport infrastructure projects, etc.
This is a specific enumerated list — not every incentivized project qualifies for full-term exemption.
3. Time-limited exemption for incentivized projects
For incentivized production and business projects, the exemption works as follows:
- During basic construction: as per the competently approved project, up to 3 years from the land lease decision date (not applicable to commercial housing or commercial/service land projects);
- After basic construction: 3 years for projects in incentivized industries; 7 years for projects in areas with difficult socio-economic conditions; 11 years for projects in especially incentivized industries; 15 years for especially incentivized projects in difficult areas; the entire lease term for especially incentivized projects in particularly difficult areas.
4. Land rent reduction
Under Article 40 of Decree 103/2024/ND-CP:
- 50% reduction for land used for PPP investment projects in incentivized industries/areas per the lists;
- 30% reduction of annual land rent for the entire lease term across the whole leased area, where the revenue percentage ratio cannot be determined.
5. Key condition: incentivized industry and area lists
Whether a project qualifies depends on whether it falls within the lists of incentivized/especially incentivized industries and incentivized areas under investment law (the Investment Law 143/2025/QH15, effective 1 March 2026).
Businesses should cross-check their investment registration certificate or investment policy approval decision against the incentive lists before preparing the exemption/reduction dossier.
6. Application procedure
Note the distinction: where exemption applies, the land user does not need to file an exemption request (Article 157.3 of the 2024 Land Law; Article 41 of Decree 103/2024/ND-CP). For reduction cases, the tax authority calculates the reduced amount and issues a reduction decision (Director of the Tax Department for organizations; Head of the District Tax Office for households and individuals).
- Prepare the dossier: written request (for reduction cases) or information on exemption eligibility; land lease decision; investment registration certificate/investment policy approval; documents proving the project is in the incentivized industry/area lists;
- File through the one-stop interlinked mechanism; the Land Registration Office transfers the information slip to the tax authority for land rent calculation (Articles 42–43 of Decree 103/2024/ND-CP);
- Track and reconcile the exemption/reduction notice against annual land rent payable.
7. Frequently asked questions
Q: Do commercial housing projects qualify for land rent exemption?
A: No — commercial housing projects and commercial/service land uses are excluded from the basic-construction exemption and are not among the full-term exemption cases.
Q: What is the difference between the 15-year exemption and full-term exemption?
A: The 15-year exemption applies to especially incentivized projects in difficult areas; full-term exemption applies only where the project is especially incentivized in a particularly difficult area — a stricter area condition.
Q: What happens to the exemption if the project is transferred?
A: The incentive attaches to the project and its qualifying conditions; the transferee must meet the conditions and complete re-confirmation procedures — review carefully before transacting.
Need to assess land rent exemption/reduction eligibility for your investment project? Contact us for advice.
This article was prepared by the FLAW AI Legal Council. The content is pending QA Council review before submission for approval; it is for reference only and does not replace legal advice for your specific situation.