According to Clause 2 and 3, Article 123 of the 2024 Land Law, the authority to permit land use purpose conversion is stipulated as follows:
- The People's Committee of the province (province, centrally run city) decides to allow the change of land use purpose for domestic organizations.
- The People's Committee at the district level has the authority to permit the change of land use purpose for households and individuals.
In case of leasing land to individuals, allowing the conversion of agricultural land use purposes for commercial and service purposes with an area of 0.5 ha or more, there must be a written approval from the Provincial People's Committee before making a decision.
Thus, the authority to permit the change of land use purpose is currently decided by the People's Committee at the provincial level (province, centrally run city), the People's Committee at the district level (district, district, town, city under province, city under centrally run city) depending on the subject of the land user.
In particular, households and individuals who want to change land use purposes must ask for permission from the People's Committee at the district level and can only change when there is a decision from the People's Committee at the district level.
In addition, Article 116 of the 2024 Land Law stipulates the basis for land allocation, land lease, and permission to change land use purposes.
Accordingly, not all cases where land users submit applications for changing land use purposes are for the People's Committee to allow changing the purpose to residential land, but must depend on the annual land use plan of the district level approved by the competent authority (the land plot to be converted must be in the area permitted to change the purpose of use).
Thus, the seller's promise to become a residential land does not mean that it can be implemented because it does not have the right to decide, even the competent authority, the People's Committee, does not have the authority in all cases but must rely on the district-level land use planning or general planning or zoning planning according to the provisions of law.
In addition, in cases where it is certain that it is allowed to change the purpose of land use to residential land, the seller will usually do so before transferring to transfer at a higher price.
Normally, if the purpose of land use is allowed to be converted into residential land, the transferor must have carried out this procedure before transferring it to another person, because the market price of residential land is much higher than other types of land, especially agricultural land.
In case the land use purpose is allowed to be converted into residential land, the buyer needs to carefully consider if he/she is the one paying the land use fee, because the land use fee is a large amount of money.
In short, from a legal perspective, the transferee should consider if the seller promises to convert the land to residential land. However, in many cases, buyers who want to invest are available to buy this type of land.
