Voters in Ho Chi Minh City have raised concerns about the high land use fees, which pose financial challenges for many households and individuals, especially those in difficult circumstances, when subdividing land or building homes for their children. They struggle to afford the conversion of land use purposes to residential land.
As a result, voters have proposed reviewing land use conversion fees to make them more reasonable. They also suggest reducing personal income tax on real estate transfers, particularly with exemptions or reductions for households facing financial hardships. Additionally, they recommend implementing a long-term installment payment mechanism for land use conversion fees to help residents stabilize their housing and focus on work and production.
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Regarding these concerns, the Ministry of Finance stated that Article 156, Clause 1 of the Land Law No. 31/2024/QH15 stipulates: “When changing land use purposes, land users must pay land use fees or land rent in a lump sum for the entire lease period, equivalent to the difference between the land use fees or land rent of the new land type and the previous land type.”
Decree 103/2024/NĐ-CP, issued on July 30, 2024, outlines the calculation of land use fees for households and individuals changing land use purposes, following the principles of Article 156, Clause 1 of the 2024 Land Law.
Accordingly, households and individuals converting agricultural land to residential land must pay the difference between residential land prices and agricultural land prices at the time of the conversion approval.
Recently, the Ministry of Finance has received feedback from local authorities and media reports indicating that land prices in the new price list under the 2024 Land Law have surged in some areas compared to the previous list (under the 2013 Land Law), particularly for residential land relative to agricultural land.
Consequently, when converting agricultural land to residential land, citizens face significantly higher land use fees than before. There have been proposals to adjust these fees to reduce the financial burden on residents.
In response, the Ministry of Finance has drafted a Government Resolution to address issues related to land use fee calculations for households and individuals converting agricultural land to residential land. This draft is being finalized after review by the Ministry of Justice and will be submitted to the Government for approval.
Regarding the proposal for long-term installment payments for land use conversion fees, the Ministry of Finance noted that current land use fee regulations already include several exemptions and reductions to support those in difficult situations and policy beneficiaries.
Specifically, Decree 103/2024/NĐ-CP (Articles 18 and 19) exempts land use fees for implementing housing policies for disabled veterans or war invalids without work capacity, and households of martyrs without primary laborers.
It also provides exemptions or reductions for the poor, ethnic minorities, and those displaced due to state land reclamation for safety reasons.
For long-term installment payments, Decree 103/2024/NĐ-CP and Decree 101/2024/NĐ-CP allow land users to defer land use fee payments when receiving land use right certificates for the first time, with specific procedures for debt recording.
Additionally, current laws offer exemptions and reductions for the poor, policy beneficiaries, and those facing genuine hardships.
Articles 18 and 19 of Decree 103/2024/NĐ-CP detail exemptions and reductions for residential land within allocated limits for the poor, policy beneficiaries, and those in genuine hardship, including disabled veterans, martyr households, the poor, ethnic minorities, displaced persons, and individuals with meritorious service under the law.
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