Commenting on the draft amendments to the Land Law, Le Hoang Chau, chair of the HCMC Real Estate Association (HoREA), pointed out that Clause 1 and Clause 4 of Article 159 in the 2024 Land Law, along with Clause 1 of Article 8 in Decree 103/2024, currently stipulate that land use fees must be calculated based on the land price listed in the official land price table.

This means households and individuals converting land use (from agricultural land to residential land, for example) must pay 100 percent of the listed land price for the entire area, without distinguishing between land within or beyond the allocated residential quota.

As a result, the total land use fees people have to pay can reach unaffordable levels, forcing many people to withdraw their applications. For instance, to convert a 400 sq m land plot in former Vinh City to residential land, people were required to pay VND4.5 billion in land use fees. In HCMC, a 208 sq m plot in Hoc Mon (former district) required VND1.7 billion, and a 400 sq m plot in district 7 could cost up to VND14 billion.

Clause 5 of Article 45 in the Land Law and point c, clause 11, article 18 of Decree 101/2024, allow residents to defer payment of land use fees without any time limit, unlike the 2013 Land Law, which only allowed a 5-year deferral.

However, Chau emphasized that deferring payment severely limits land users' rights: 

they cannot transfer, lease, mortgage, or contribute land as capital, even if they hold a land use right certificate.

In other words, although families have a “red book,” they are unable to conduct transactions or secure loans using the land.

Additionally, when people withdraw their applications for ‘pink book’ (land use right certificate) issuance, it affects state land management and leads to an increase in unofficial transactions. Without pink books, land can still change hands via handwritten agreements, leaving owners without legal protection or recognition.

20% land fees proposed

To address this, Article 1, Clause 2 of the draft amendment to Decree 103/2024 (third revision) proposes that land use fees after conversion be calculated as 30 percent of the land price for the area within the residential quota, and 50 percent for the area exceeding the quota.

However, Chau argued that 30-50 percent is still too high.

HoREA has proposed reducing the rate to 20 percent for land within quota, and 30 percent for excess land, calculated based on the official land price table.

Additionally, Chau proposed a transitional policy in the new regulations that would allow provincial governments to refund the difference to households and individuals who previously paid 100 percent of the land value under the older rules when converting to residential land.

Hong Khanh