The Backlog Blues: Unblocking Thousands of Property Files in Ho Chi Minh City

Just over a month after the Land Law 2024 came into effect, Ho Chi Minh City residents’ applications for land-use conversion, transfer, and certification remain stalled due to tax calculation issues, awaiting the new land price list.

The Ho Chi Minh City Tax Department has repeatedly petitioned the city’s People’s Committee to promptly issue a decision to adjust land prices and provide specific guidance for tax authorities to implement.

Continuous Advocacy

According to a recent report by the Ho Chi Minh City Tax Department to the city’s People’s Committee, from August 1 to 27, the department had a backlog of over 8,800 land-related dossiers awaiting processing regarding financial obligations. These included 364 dossiers for land-use recognition, 277 for land-use conversion, 5,448 for real estate transfers, and 2,737 with no financial obligations (such as personal income tax from real estate transfers and registration fees).

Mr. Nguyen Tien Dung, Deputy Director of the Ho Chi Minh City Tax Department, explained that Article 257, Clause 3 of the Land Law 2024, which took effect on August 1, stipulates that when the land price proposal has been submitted to the competent authority before the effective date of this Law, the competent authority shall decide on the specific land price according to the proposed price. However, the land management agency in Ho Chi Minh City has submitted the new land price list for approval, but it has not been approved yet.

As a result, if the tax authority calculates the financial obligations of land transactions based on the old land prices, they will be criticized by higher authorities. Consequently, the processing of applications for the public is stalled.

According to Mr. Dung, to resolve this situation, the Ho Chi Minh City tax sector has twice sent reports and proposed to the People’s Committee of Ho Chi Minh City to announce the collection of land use charges for cases of land-use recognition and land-use conversion. They also proposed collecting personal income tax from real estate transfers, registration fees, etc., based on either the old or new land prices. The tax authority will then focus its resources on swiftly addressing the backlog of land-related dossiers for the public. “In addition, to avoid dossier accumulation and complaints and to meet the practical needs of the people, the Ho Chi Minh City Tax Department will report to the General Department of Taxation about resolving the above cases without financial obligations when issuing certificates to the people,” said Mr. Dung.

Public Impatience

In reality, as observed by the reporter of NLD at the land registration offices of Thu Duc City and Cu Chi, Hoc Mon, Binh Chanh districts in the early days of September, there were large crowds of people doing procedures for converting agricultural land use to residential land, land division, land-use certification, and real estate transfer, but all were “stuck” at the tax calculation stage.

At the Land Registration Office of Thu Duc City, Ms. Nguyen Thi H. (from Hiep Binh Chanh Ward, Thu Duc City) shared that she had submitted a dossier for converting the land use purpose of 1,000 square meters of agricultural land to residential land to the Public Service Center of Thu Duc City and was scheduled to receive the result on September 4. However, when she arrived, she was informed that the dossier was “temporarily suspended” pending procedures related to land valuation for land use charge calculation.

“I have prepared the money to pay the tax, but the procedure is not completed yet, so I have to wait. I am very impatient and worried that the tax authority will impose a large amount, which I cannot afford. Now, I can only wait and see,” said Ms. H., expressing her concern.

Mr. Hoang Ly, a real estate service provider in Binh Tan District, said that currently, all procedures related to land, including transfer and conversion, that involve taxes are stalled. Even if the buyer declares the correct price when transferring, only personal income tax can be calculated, but the registration fee cannot be determined because the tax authority does not know which land price list to apply. “If we follow the new Land Law, Ho Chi Minh City has not had detailed guidance, so the districts cannot apply it. Like everyone else, I hope that Ho Chi Minh City will soon have specific guidance to unblock the stalled procedures,” Mr. Ly expressed.

A lawyer representing a notary office in Tan Phu District said that after the notarization procedure, the dossier is transferred to the “one-door” department. All tax procedures are handled by the land management agency, but most are now stuck with the registration fee calculation due to the new land price list, which took effect on August 1 under the Land Law 2024. “Many of our regular customers said that their plans were disrupted because they could not carry out the procedures for real estate transfer and receipt of money during the past month,” the lawyer said.

Mr. Tran Khanh Quang, General Director of Vietnam An Hoa Real Estate Investment Company, suggested that to unblock the backlog related to transfer tax, land-use conversion tax, etc., the tax authority should apply the old land price list until December 31, 2024, to promptly handle the people’s dossiers. After that, when Ho Chi Minh City has a new land price list, it will be applied according to the new prices. This way, there will be no violations, and the people’s interests will not be affected.