Unexpectedly 'stuck' with financial burden when converting land use purpose

Bất ngờ 'mắc kẹt' với gánh nặng tài chính khi chuyển đổi mục đích sử dụng đất - Ảnh 1. — Enterprises propose to amend regulations on calculating land use fees for some special cases to free up land resources and reduce financial burden for people and businesses - Photo: NGOC HIEN

Speaking with Tuoi Tre , Mr. Nguyen Phuong Nam - former chairman of the Ho Chi Minh City Young Entrepreneurs Association - said that the conversion of land use purpose for non- agricultural land that is rented with annual payment but the origin before renting was agricultural land of people with red books (not public land) is having problems in the regulations on calculating fees.

Unexpected difficulties in converting land use purposes

Mr. Nguyen Phuong Nam said that Decree 103 on land use conversion fees does not clearly distinguish or omits cases where land users have been granted land use right certificates for agricultural land (not public land for lease) before converting to non-agricultural land and paying annual land rent. When they need to convert to residential land, their financial obligations will be greatly affected.

Specifically, in this case, people must pay 100% of the land use fee calculated based on the residential land price at the time of the decision to allow the change of purpose. The policy of calculating according to the agricultural land price as for their own agricultural land that was granted a certificate before renting is not applied.

In addition, people are not allowed to deduct the value paid when renting land annually, even though the land is private land, not land leased by the state from the beginning.

According to Mr. Nam, this leads to major shortcomings such as creating unfairness and reducing the motivation of people and businesses to exploit land for production and business purposes.

In addition, current laws do not have clear regulations on terminating land lease contracts on time and before the term in cases where land users no longer need to use the leased land for land whose origin they have been granted a land use right certificate before leasing.

Therefore, people cannot liquidate the lease contract early and cannot be re-issued the land use right certificate as before the lease, causing many consequences regarding assets, investments, mortgages, transactions, etc.

To ensure legitimate and legal rights for land users, and at the same time encourage people and businesses to put land into effective production and business, Mr. Nam said that in this revision of the 2024 Land Law and Decree 103, it is necessary to consider the above "missing" cases.

Proposal to supplement provisions in the revised Land Law

Regarding financial obligations when changing land use purposes, Mr. Nam proposed that it is necessary to clearly stipulate the case of non-agricultural production and business land that is rented with annual payment, but is originally land of people or enterprises that have been granted a certificate before completing the rental procedures (not public land), then when changing the purpose to residential land, they will enjoy the policies.

The policy includes: Not having to pay 100% of land use fees like public land leased by the state, and calculated in the same way as agricultural land converted for other purposes.

According to Mr. Nam, because the origin is agricultural land of the people, Decree 103 does not have this case.

Specifically, people with the same land have been granted a certificate of agricultural land use rights, but they have converted a part of the agricultural land to non-agricultural production land, they are allowed to change the form of land lease with annual payment on their land, when there is a need to change the land use purpose, this land lease with annual payment is calculated as 0, the remaining agricultural land when changing the purpose is calculated according to the financial obligations of the agricultural land type.

Regarding the right to terminate the land lease contract, Mr. Nam said that it is necessary to add a regulation allowing land users who pay rent annually, but whose land has been previously granted a certificate, to have the right to terminate the land lease contract before the term if they no longer need it; and to be re-issued a land use right certificate according to the current status of use before the lease if there is no violation of land law.

When amending this regulation, it is necessary to ensure the principles of fairness, transparency, and reasonableness, while clearly distinguishing between public land leased by the state and private land that people/enterprises have been granted the right to use, then put into annual lease with payment, without affecting the practical rights of the people.

"We believe that if the above recommendations are accepted and institutionalized in the revised Land Law, they will contribute to promoting effective land use, encouraging people with agricultural land to be ready to put it into non-agricultural production and business, creating jobs, making positive contributions to the state budget and socio -economic development," said Mr. Nam.

Proposal to abolish annual land use registration

Mr. Nam said that the regulation that land users must register their annual land use plans and get approval from the provincial or city level before being able to change the land use purpose in accordance with the plan is very wasteful and takes 1-2 years.

He also said that it is not necessary to carry out land use registration procedures when there is a need to legally change land use purposes.

This will create conditions for people and businesses to not lose the opportunity to exploit and use land effectively, contribute to the budget revenue, as well as save time and effort of people and state management agencies in the process of implementing administrative procedures on land.

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Source: https://tuoitre.vn/bat-ngo-mac-ket-voi-ganh-nang-tai-chinh-khi-chuyen-doi-muc-dich-su-dung-dat-20250731085956087.htm