The burden of land use fees

To "compete" with the newly adjusted land price list of Ho Chi Minh City, recently, people in districts with strong urbanization speed such as Binh Chanh and Hoc Mon are submitting many applications for changing land use purpose. According to statistics of the Department of Natural Resources and Environment from August 1 to now, the number of applications for changing land use purpose in Cu Chi and Binh Chanh districts has increased sharply to over a thousand applications.

Ms. Thao (living in District 10, Ho Chi Minh City) said that her family owns a 1.5-hectare agricultural land plot at the Hoc Mon intersection, located on Nguyen Van Bua Street, which is still in the process of applying for residential land use rights and is waiting for approval. She is worried to the point of losing sleep after hearing that the land price on Nguyen Van Bua Street, if Ho Chi Minh City applies the new land price list, will increase from 1.8 million VND/m2 to nearly 50 million VND/m2.

She calculated that after deducting the recognized limit (not having to pay land use fees), her family still had to pay land use fees of nearly 20 million VND/m2. And so, she had to scramble for an amount of nearly ten billion VND if she wanted to be granted a land use recognition certificate.

Or in the case of Mr. Doan Quoc Viet (residing in Phu Huu ward, Thu Duc city), he said that he has 78 square meters of land in an existing residential area in Binh Chanh district, but because he has no money, he has not yet converted it to residential land. Now, the land use fee has jumped from 200 million VND to nearly 3 billion VND, making the conversion even more distant and beyond his reach.

For businesses, the application of the new land price list will increase financial pressure due to additional land use tax, especially in Ho Chi Minh City. In recent times, due to the skyrocketing additional land use fees, many investors have been "unable to react" and suffered heavy losses, including big names such as Novaland, Hung Thinh... Although they have repeatedly petitioned the authorities, they have not been resolved yet.

Regarding the land price list and land use fee collection, at the Conference on implementing decrees to implement the 2024 Land Law organized by the Department of Natural Resources and Environment of Ho Chi Minh City on October 12, Mr. Dao Trung Chinh - Director of the Department of Planning and Land Resources Development - said that according to regulations, the price list will increasingly approach the market. Ho Chi Minh City is implementing a roadmap to adjust the land price list upward. This requires a solution for land rent and land use conversion fees beyond the limit.

In addition, Mr. Chinh also mentioned another difficulty for people when land prices are adjusted to increase, which is to solve the problem of land use conversion fees beyond the limit. The law stipulates that land use conversion fees are calculated by the difference in land value after conversion and land value before conversion. The Ministry has proposed a plan to exempt or reduce land use conversion fees. The Prime Minister will decide on this after consulting the National Assembly Standing Committee.

"Currently, the Ministry of Finance continues to develop and amend this content in the decree. We propose that Ho Chi Minh City continue to study and give comments on this decree of the Ministry of Finance. Only then can we solve the overall problem after we put up the price list, so that the land use fee and land rent that people and businesses have to pay do not increase too much, causing them to react," Mr. Chinh stated his opinion.