The Soaring Land Prices in Ho Chi Minh City: A Rush to Transfer Land Use Rights

While completing the paperwork for a land division or change of land use purpose can be time-consuming, many people have been rushing to find ways to expedite the process in recent days, even if their documents are not yet fully prepared according to regulations.

Most people dealing with paperwork these days share the same concern: if they don’t finish soon, when Ho Chi Minh City implements the new land price framework, the cost of changing the land use purpose could skyrocket from a few hundred million to several billion or even tens of billions of dong.

Receiving applications but unable to finalize tax calculations

On August 6, VTC News reporters observed that the reception and result delivery area of the People’s Committee of Cu Chi District was crowded with people from early in the morning. Most of them were there to transfer the land-use right from agricultural to residential purposes. Many shared their confusion as they wanted to pay the tax but were not allowed to.

Tran Thien Ly and her husband (residents of Cu Chi District) own 300 square meters of agricultural land. Upon hearing the news of the city’s upcoming land price adjustment, they hurriedly arranged the funds to initiate the procedure to convert their land to residential use. They had hoped that the city’s temporary postponement of implementing the new land price framework would bring some financial relief. However, after completing most of the steps, they were told to “wait” when it came to paying the tax.

“I’ve finished all the necessary procedures, but when it comes to paying the tax, the officials tell me to wait. They still accept my application, but they say they can’t finalize the calculation method at this time and ask me to hold on. I’m worried that later, when the city implements the new land price framework, the tax agency will group our pending applications and calculate the tax based on the new prices. That wouldn’t be fair, as we submitted our application before the effective date,” shared Ly.

In addition to those seeking to change their land-use purpose, many who had previously deferred their land use payments were also present to settle their debts with the state.

Two years ago, Nguyen Van Hung, a resident of Cu Chi District, changed the purpose of the land where his family lives from agricultural to residential use. At that time, as he didn’t have enough financial resources, he requested to defer the land use payment. Now, with the news of the city’s impending implementation of the new land price framework, he is concerned about the potential surge in his debt and is borrowing money to settle it as soon as possible.

“I have to wait, too. I don’t understand why they are making us wait when the decision to adjust the land price hasn’t even been issued yet,” questioned Hung.

In response to VTC News, Ms. Pham Thi Thanh Hien, Chairman of the People’s Committee of Cu Chi District, confirmed that the District Tax Department is still accepting land-related applications from citizens. However, they cannot finalize the calculation method immediately and must await further instructions from the Ho Chi Minh City Tax Department.

“All land-related procedures in the locality are carried out through an integrated system. Specifically, the Tax Department receives electronic applications from the Land Registration Office. We are still accepting applications as usual and have not stopped. However, for applications submitted after August 1, we have to wait for guidance on the land price. Whether to apply the new or old price for citizens, the District Tax Department is still awaiting instructions from the Ho Chi Minh City Tax Department,” said Hien.

Similarly, in Hoc Mon District, there is also a large crowd of people finalizing real estate-related procedures. The Tax Department here is also awaiting instructions from the Ho Chi Minh City Tax Department, just like in Cu Chi District.

The city should issue a specific document regarding land prices

In Thu Duc City, the Land Registration Office was also crowded on the morning of August 6 with people finalizing procedures for real estate purchases and transfers. According to the division of authority, the Thu Duc Land Registration Office handles cases that have already been certified, such as purchases, transfers, mortgages, etc. On the other hand, applications for change of land-use purpose are processed at the Public Administration Center.

Thuy Hang, a real estate broker in Phuoc Long B Ward, is handling the procedures for two clients she helped find a house in the same ward for a price of 11 billion VND. According to her, the procedures for the sale are proceeding smoothly, without any delays. The clients’ application was submitted after August 1.

Based on the appointment schedule, the clients will receive a tax notification within two weeks of completing the procedure. And, within 24 hours of finalizing the tax procedure, the buyers will be granted the new model of the Certificate of Land Use Right, as stipulated in the new Land Law and Housing Law.

Hang also shared that, unlike before, when buyers and sellers might “agree” to declare a lower price to reduce taxes, these days, no one considers underreporting the price. She added that her clients who sold a house for 11 billion VND last Sunday (August 4) decided to fulfill their tax obligations truthfully, declaring the actual selling price.

The broker further mentioned that, in recent days, all tax declaration and purchase procedures for her clients have proceeded smoothly as long as they declared the correct selling price. Only two applications submitted before August 1 were returned, not because of the pending determination of the new land price but because the declared price was too low compared to the actual selling price.

For those seeking to change their land-use purpose or subdivide their land, the Public Administration Center of Thu Duc City received over ten inquiries about these procedures this morning, with only about four people bringing their applications for submission according to regulations. Most people came to inquire about the procedure for changing the land-use purpose, as they had heard that the city had stopped accepting applications.

Ngoc Anh, a resident of Long Truong Ward, shared that he had just completed the procedure to convert 120 square meters of agricultural land to residential use, with the land price calculated according to Decision 02. However, he had actually started the procedure a few months ago but couldn’t afford to complete it then. Now, fearing the application of the new land price framework, he gathered funds from his relatives to finish the process.

According to Anh, many people around him are also rushing to complete the process this year, hoping to be charged according to the old land price framework. “That’s an amount we’ve planned and can afford. If the new prices are applied, the cost could increase severalfold, up to several billion VND. How can we afford that when the land is just for living, not for business or anything that generates income? We can’t afford to borrow that much money from the bank,” Anh explained.

Ngoc Dien, a resident of Hiep Phu Ward, also came to inquire about the procedure for changing the land-use purpose for a plot of land of nearly 150 square meters. He calculated that if he didn’t act quickly, the amount he would have to pay next year, when the city applies the new land price framework, could increase from about 300 million VND to more than 6 billion VND. This figure has kept him and his wife up at night for the past few days.

Attorney Le Trung Phat, Director of Le Trung Phat Law Firm, stated that the 2024 Land Law, which took effect on August 1, 2024, does not have retroactive effect, meaning it governs related matters from the effective date onwards.

In addition to the absence of retroactivity, Article 257, Section 1 of the Law also allows “the land price framework issued by the People’s Committee of the province under the 2013 Land Law to remain valid until December 31, 2025. If necessary, the People’s Committee of the province may decide to adjust the land price framework according to the provisions of this Law to suit the actual land price situation in the locality.”

Thus, it means that for applications already received, the old regulations will be applied to determine the land price until January 1, 2025, unless the People’s Committee of the province has issued a new land price framework.

Currently, the People’s Committee of Ho Chi Minh City has not issued a new land price framework under the 2024 Land Law. Therefore, the Tax Departments in the districts not processing applications related to financial obligations that citizens must pay is baseless and causes significant inconvenience to the people.

“In my opinion, given this situation, the People’s Committee of Ho Chi Minh City should immediately issue a document clarifying that the Committee has not yet issued a new land price framework under the new Law. The application of the land price framework to resolve citizens’ applications should still follow the old regulations. This would quickly resolve the issue and prevent the Tax Departments from having to seek guidance from the Ho Chi Minh City Tax Department, which, in turn, would have to make a document to inquire with the People’s Committee of the city,” said Attorney Le Trung Phat.