The Ministry of Finance has just issued a Draft Submission to the Government on the draft Decree amending and supplementing a number of articles of Decree No. 103/2024/ND-CP regulating land use fees and land rents. One of the notable contents is the proposal to reduce land use fee collection for households and individuals who change land use purposes from agricultural land to residential land.
According to the Ministry of Finance, there are opinions reflecting that the issuance of new land price lists according to the provisions of the 2024 Land Law in many localities has caused land prices to be dramatically higher than before. Meanwhile, current regulations on calculating land use fees have not been adjusted in a timely manner, causing households and individuals who need to change the purpose of land use from agricultural land to residential land to have to pay a price many times higher than before. Many localities have reported that this situation is putting great pressure on people, especially in rural areas and suburban areas.
To handle the practical issue while not yet amending the 2024 Land Law, the Ministry of Finance has submitted to the Government two options, in which it proposed to choose options with higher support for the people.
Option 1: Converting from garden land and ponds in the same plot of land with houses in residential areas (not recognized as residential land) to residential land; converting from land originally garden land and ponds attached to houses but separated by measurement before July 1, 2004; converting from agricultural land in the same plot of land with houses according to the 2024 Land Law to residential land.
For the area within the residential land allocation limit, land use fees are calculated at 30% of the difference between land use fees according to residential land prices and land use fees, land rents according to agricultural land prices. For the area exceeding the limit, the fee is 50% of this difference.
Thus, people can have their financial obligations reduced by up to 70% compared to the current calculation method, which is based entirely on the difference between residential land prices and agricultural land according to the new land price list.
According to the Ministry of Finance, this option will help reduce financial obligations for people in the context of high land prices compared to before, especially in cases of changing the purpose from garden land, ponds adjacent to houses or agricultural land located in the same plot of land with houses. This is a reserve land fund for household separation needs, different from pure agricultural land, so it is necessary to apply a lower collection rate within the residential land allocation limit to facilitate people to have legal housing.
However, the Ministry of Finance also assessed that this option is problematic for cases of converting land use purposes from purely agricultural land to residential land when land prices for land use fees increase.
Option 2: Maintain the provisions of Decree No. 103/2024. However, this option is considered not to have resolved the problem of people's obligations regarding land use fees when the land price for calculating fees increases compared to the old Law. No incentives are given to garden pond land adjacent to a plot of land with a house, agricultural land in the same plot of land with a house (must be collected with the pure agricultural land).
Currently, the Ministry of Finance has sent an official dispatch to provinces and centrally run cities requesting a quick report on the implementation of land use fee collection policies for cases of land use purpose conversion. Through synthesis, many localities agree with the proposal to calculate land use fees at a percentage rate as option 1, to suit the actual conditions and financial capacity of the people.
The draft decree is being further finalized to submit to the Government for consideration and promulgation in the coming time.
