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The Ultimate Guide to Navigating HCMC’s Land Pricing Procedures: Unlocking the Secrets to Success

19 August, 2024

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Since the beginning of August, there have been numerous applications for land-use conversion and land transfer that have been stalled after being sent to the tax authority for tax and land-use fee calculation. The Department of Natural Resources and Environment of Ho Chi Minh City has submitted a document to the People’s Committee of Ho Chi Minh City, requesting guidance from the Government to resolve administrative procedures related to land from the effective date of the 2024 Land Law until the adjusted land price table is issued.

Procedures at the tax authority are stalled

According to the Department of Natural Resources and Environment, the statistics on the VBDLIS software system for land-use right certificate issuance show that there are over 1.7 million land plots in the city. By June 2024, the Department of Natural Resources and Environment had granted land-use right certificates for 99.55% of the plots.

Currently, there are 7,779 land plots that need to be granted land-use right certificates for the first time in the form of recognizing the land use rights of households and individuals, which fall into six cases of exemption from land use fees or four cases of land use fee payment ranging from 10% to 60% of the land price according to the land price table.

For those who do not meet the conditions for land use fee payment, a procedure for deferring land use fees will be carried out, and when the land is transferred, the land use fee will be paid as regulated.

The People’s Committee of Ho Chi Minh City has sent a request for guidance on resolving stalled dossiers related to the Land Price Table. Photo: TM

“Therefore, through analysis and impact assessment, the adjusted land price table includes the price of resettlement land to avoid capital disbursement congestion for key projects of the city. This adjustment has a positive impact and creates fairness among land user groups. When recognizing land use rights for households and individuals, the impact is not significant,” said the Department of Natural Resources and Environment.

On the other hand, the issuance of the adjusted land price table is in line with the actual land price situation in Ho Chi Minh City and complies with the provisions of Clause 1, Article 257 of the 2024 Land Law. According to the Department of Natural Resources and Environment, this will ensure a balance of interests between the State, land users, and investors.

According to the Department, the cases of land-use conversion are still being received by the districts, Thu Duc City, and the Land Registration Office branches.

On August 17, the People’s Committee of Ho Chi Minh City submitted a document to the Prime Minister, requesting guidance on calculating financial obligations related to land for dossiers after the effective date of the 2024 Land Law until the issuance of the adjusted Land Price Table as stipulated in Clause 1, Article 257 of the 2024 Land Law.

In addition, the branches of the Land Registration Office in districts and Thu Duc City are still receiving and resolving administrative procedures related to land in the one-door form. However, when transferring information to the tax authority, this agency has not yet collected the money.

“The Department of Natural Resources and Environment has also submitted a document to the People’s Committee of Ho Chi Minh City, requesting guidance from the Government to resolve administrative procedures related to land from the effective date of the 2024 Land Law until the issuance of the adjusted land price table as stipulated in Clause 1, Article 257 of the 2024 Land Law,” said the Department of Natural Resources and Environment.

Many cases will have to pay higher land use fees, taxes, and charges

According to the Department of Natural Resources and Environment, the adjusted land price table will affect many subjects. First of all, there are households and individuals in recognizing land use rights. The collection and proportion of land use fees will be based on the time of land use as prescribed in the 2024 Land Law and Decree No. 103/2024 on land use fee and land rent collection.

The adjusted land price table also affects the collection of land use fees when households and individuals are allowed by the State to change the land use purpose for the area within the residential land limit. Because, according to the 2013 Land Law, these cases are subject to the land price table.

The number of remaining land plots in the city that have not been granted certificates is 7,779. These plots are mainly located in the outlying districts because the central area has been granted certificates and is stable, so there is no need for the first-time granting of land-use right certificates.

However, for the area outside the limit, the impact is not significant because, according to the 2013 Land Law, these cases are determined by the specific land price (market price). Now, updating it into the land price table is suitable for the actual land price situation in Ho Chi Minh City.

The Department of Natural Resources and Environment believes that this impact creates fairness for land users. Because, according to the 2013 Land Law, the recovered land is arranged for resettlement at a specific land price (market price). Now, according to Clause 3, Article 111 of the 2024 Land Law, it is based on the land price table.

For poor households and policy beneficiaries, there is a regime of exemption and reduction of land use fees when meeting the conditions prescribed in Decree No. 103/2024 on land use fee and land rent collection.

The adjusted land price table affects the collection of non-agricultural land use tax. The non-agricultural land use tax rate used to be determined by the formula: 0.03% x land price in the land price table x land area within the limit (the area outside the limit is 0.15%).

However, according to Clause 3, Article 6 of the Law on Non-Agricultural Land Use Tax, the land price table for calculating non-agricultural land use tax is stable for five years from January 1, 2012. Up to now, the land price table under Decision No. 02 is being applied in the third cycle and will end on December 31, 2026.

Thus, the new land price table will be applied from January 1, 2027, for the next five-year cycle. Therefore, the adjusted land price table will not affect the collection of non-agricultural land use tax from now until the end of 2026.

Another subject affected by the adjusted land price table is households and individuals paying income tax from land transfer. The calculation of income tax will be based on the land price table. Accordingly, the increase in the land price table will also increase this tax amount.

Next, the adjusted land price table affects the fees in land management and use but updates them fully and suitably to the actual situation and the land price level in Ho Chi Minh City.

In addition, when applying the adjusted land price table to calculate the fine for administrative violations in the field of land, the fine will increase. Therefore, it has a positive impact on limiting administrative violations in the field of land. Finally, when applying the adjusted land price table, it increases the amount of compensation to the State for causing damage in land management and use…

The current land price table is applied until December 31, 2025

On August 12, the Ministry of Finance issued a document to ministries, branches, and localities guiding the implementation of the provisions of the 2024 Land Law related to the management and use of public assets.

According to the Ministry of Finance, the land price table issued by the provincial People’s Committees according to the provisions of the 2013 Land Law will continue to be applied until December 31, 2025. If necessary, the provincial People’s Committees will decide to adjust the land price table according to the provisions of this Law to suit the actual situation of land prices in each locality. The procedure for adjusting the land price table in this case (if any) shall be carried out according to the regulations in Article 17 of Decree 71/2024 detailing the implementation of the Land Law.

Previously, the Ho Chi Minh City Tax Department sent a document to the People’s Committee of Ho Chi Minh City, stating that the application of Decision No. 02 for cases applying the land price according to the provisions of Clause 1, Article 159 of the 2024 Land Law will create difficulties and obstacles in handling dossiers at the tax agency.

According to the Ho Chi Minh City Tax Department, the 2024 Land Law stipulates that from August 1, the land price table for the 2020-2024 period will continue to be applied until December 31, 2025. If the People’s Committee of Ho Chi Minh City continues to allow the application of the 2020-2024 land price table without adjusting the land price coefficient (without the percentage of land rent calculation for cases where the State leases land and collects annual land rent), it will be impossible to calculate land use fees, land rent, and personal income tax from real estate transfer correctly according to legal regulations.

Therefore, the Ho Chi Minh City Tax Department proposed that the People’s Committee of Ho Chi Minh City soon issue a decision to adjust and supplement Decision No. 02 to suit the actual situation. At the same time, there should be guidance on the application of legal documents (land price table, land price adjustment coefficient, percentage of land rent calculation…) so that the tax agency can promptly calculate financial obligations related to land for dossiers arising from August 1.

NGUYEN CHAU