In the draft submission to the Government, the Ministry of Finance submitted to the Government 2 options to approve the draft amendment to Decree 103 on land use fees and land tax. In addition to the option of maintaining the current regulations, which is to pay the entire difference between residential land prices and agricultural land prices according to the new price list, the Ministry of Finance also proposed to apply a mechanism for calculating a percentage.
In cases of converting land into gardens and ponds located in the same plot of land with houses or adjacent to houses but having been separated by technical factors before 2004, the Ministry of Finance proposed to collect land use fees at a rate of 30-50% instead of the entire difference. The collection rate is 30% of the difference between residential land prices and agricultural land if the area is within the residential land allocation limit. If the limit is exceeded, the difference that people must pay will be calculated at 50%.
Sharing with Lao Dong, Dr. Tran Xuan Luong - Deputy Director of the Vietnam Institute for Real Estate Market Research and Evaluation - commented that the proposal of the Ministry of Finance demonstrates goodwill in supporting people, contributing to reducing the financial burden when performing the obligation to change land use purposes. However, he said that this is still a short-term, temporary solution, not handling the root problem that is pushing land prices up too high.
Recently, the case of a household in Vinh City, Nghe An being asked to pay nearly 4.5 billion VND when requesting to change the purpose of using 300m2 of garden land to residential land has caused particular public attention. According to Dr. Luong, the main reason for the sharp increase in financial obligations is the huge difference in land rent between agricultural land and residential land.
"Currently, the State has adjusted land prices in the vicinity of market prices, while agricultural land prices remain almost unchanged. This causes the difference to be pushed too high, creating a burden for people when converting, he analyzed.
The expert emphasized that requiring people to pay the entire price difference without fully assessing related factors will lead to double consequences: many people have land but cannot separate plots or legalize due to lack of finances; at the same time, pushing up land prices, creating the risk of price inflation and local inflation.
Dr. Tran Xuan Luong believes that, instead of applying a rigid formula, the policy needs to be designed on a multi-critical platform, in which it is especially necessary to clearly distinguish between changing the purpose of land use for residential purposes and for business, and at the same time consider the history of land use rights formation.
He recommended building a database of land price history and fully encoding information about the physical nature of the land plot. At the same time, there should be the participation of independent valuation organizations, professional research institutes or People's Councils to supervise price determination, ensuring fairness and transparency.
Lawyer Nguyen Van Dinh (Hanoi Bar Association) - commented that currently, there is a common phenomenon that real estate investors receive the transfer of agricultural land use rights (for example, perennial land) to apply for a change to residential land and sell it for profit. In this case, if the collection of land use fees is "lax", it will lead to policy profits. On the contrary, if people have real needs, they need to enjoy more harmonious policies to ensure stable life.
The State needs to have its own policies for each subject. In case of investment/mental investors, they must collect correctly and fully the land use fee close to market price; while for households and individuals who do not need to invest, they must enjoy a "softer" policy to ensure livelihoods and solve social security problems.
Regarding the reality that land users when converting land use purposes have to pay high land use fees, Mr. Mai Van Phan - Deputy Director of the Department of Land Management (Ministry of Agriculture and Environment) said that the Ministry has studied and will discuss with the Ministry of Finance to ensure harmonious land prices. Mr. Phan also said that it is necessary to determine the subjects, land types and land prices that will be associated with the real estate market, in the spirit of the Land Law.
