Adding land use fees to selling prices, no one can buy
Ms. Da Thao (residing in Hoa Hung ward, Ho Chi Minh City) said that she bought a level 4 house with an area of about 75m2 in Hoc Mon district (formerly) in 2005 and has been renting it out since then. By the end of 2024, she decided to apply for a land use right certificate, and the measuring company had painted out the above land area of 208m2. The land price list according to regulations is more than 11 million VND/m2.
When the family learned about the expected finances needed to legalize the house and apply for a certificate, it was known that the land use tax had to be paid for nearly 1.7 billion VND, in addition to the family's financial capacity.
"I was forced to sell the house, but because of the documents and high conversion costs, customers did not care," said Ms. Thao.
According to research, many people are also having to sell cheap real estate because they cannot fulfill their financial obligations when changing the purpose of land use but it is not easy to find buyers. For example, Mr. Doan Quoc Viet (in Tang Nhon Phu ward, Ho Chi Minh City) said that there is a 210 m2 plot of land eligible for a residential transfer.
However, after learning about the procedures for dividing the plot and changing the purpose, Mr. Viet was very "shocked" because he had to pay nearly 6 billion VND for land use fees. It is known that when applying the new land price list, land in this area has increased 10 times, so conversion costs have increased.
"Although land use fees have increased, land prices cannot increase accordingly. We cannot take the current land price and add a few billion VND in additional land use fees to the selling price, because with that price, no one can buy it," Mr. Viet shared.
Conversion costs have increased many times compared to the previous period
According to data reported by the Ho Chi Minh City Real Estate Association (HoREA), the city currently has more than 13,000 plots of land that have not been granted certificates, accounting for 0.7% of the total number of plots of land in the area.
In particular, households and individuals with houses and land in planning, not yet converted to use purpose, or wanting to legalize the right to use agricultural land areas interspersed in residential areas with stable access to existing housing are all facing difficulties when land prices increase and conversion costs fluctuate strongly.
People who want to separate plots at the same time as changing the purpose to residential land are also facing similar problems because the land price list has increased many times in the past.
In the draft amendment to Decree 103 on land use fees and land rents, the Ministry of Finance proposes a plan to apply the old calculation method, collecting land use fees at a percentage rate instead of the entire difference as at present. The collection rate is 30% of the area within the limit and 50% for land outside the limit.
This option only applies to cases of converting "reserved land for living" such as garden land, ponds located in the same plot of land with houses, or originating adjacent to houses (but the plot was separated due to technical factors before 2004); not applicable to cases of conversion from pure agricultural land.
However, according to experts, with the current land price list, it has increased quite a lot, although applying the old calculation method, the conversion cost has increased many times compared to the previous period. Mr. Le Hoang Chau - Chairman of HoREA - recommended that people's land use fees when converting from agricultural land to residential land should also be collected at a certain rate instead of being collected at 100% as at present. The proposed collection rate is 20% for land within the limit and 30% for land outside the limit.
