A series of proposals related to adjusting the collection level of fees for converting agricultural land to residential land

(NLDO)- These proposals, according to the associations, not only help reduce the burden on people but also create transparency, fairness, and maintain a sustainable source of income.

The Institute of Natural Resources and Environmental Economics (IEEr) and the Ho Chi Minh City Real Estate Association (HoREA) have recently continuously sent recommendations to the Government on amending the 2024 Land Law, focusing on reducing land use fees to reduce the financial burden on people.

Proposal to sharply reduce land use fees

According to the proposal of IEEr, it is necessary to develop a new land price list applicable from January 1, 2026, based on the land price list before the 2024 Land Law takes effect (August 1, 2024). This price list will be adjusted according to the coefficient K with an increase or decrease of 3-5% each time.

The reason given is that the current land price list has increased from 2.3 to 38 times compared to before, making it difficult for people and businesses to pay. The land use conversion tax according to Decree 103/ND-2024 also requires payment of 100% of the land value, far beyond the capacity of many households, leading to the risk of budget loss.

According to IEEr, the solution of using the old land price list as a foundation, flexibly adjusting it with the K coefficient, will help stabilize the macro-economy, limit land speculation, and at the same time create more motivation for investment and employment.

In addition, IEEr also proposed two new sources of revenue to replace the increase in land prices to ensure a sustainable budget. The first is to collect a residential land fee equal to 0.01% of the residential land price issued by the Provincial People's Committee, equivalent to 100,000 VND/year for a 1 billion VND land lot. The second is to collect an urban architectural construction fee equal to 0.5% of the value of the completed construction, classified by house level, in which level 1-3 houses must pay the fee, level 4 houses are exempt. For example, a 2 billion VND project will pay a fee of 10 million VND.

Changing land use purpose with reasonable land use fees so people can feel secure in building houses (Photo: S Nhung)

Meanwhile, Mr. Le Hoang Chau, Chairman of HoREA, proposed that a pilot resolution could be issued, applicable to cases of converting garden, pond, and agricultural land in the same plot of land with residential land, or separated before July 1, 2004, into residential land, according to Article 156 of the 2024 Land Law. HoREA proposed to amend the collection rate regulations in a flexible direction, instead of being rigid as it is now.

Specifically, the area within the land allocation limit should be calculated as 20% of the land use fee, instead of the minimum 30%. The area exceeding the limit will be collected at 30% (instead of 50%), with a maximum limit of 2,000 m², instead of the current 500 m². If it exceeds 2,000 m², then the collection rate of 100% will be applied. This regulation will only be calculated once for each household, unless there is a case of land division.

According to HoREA, the adjustment is necessary because the new land price list has increased from 2.36 to 38.8 times compared to the 2020-2024 period, causing the land use fee to skyrocket. He gave the example of a 1,000 m² plot of land in Hoc Mon commune (HCMC), with a residential land price of 36 million VND/m² and an agricultural land price of 0.75 million VND/m², with a limit of 250 m². If Decree 103/2024 is applied, people will have to pay up to 35.25 billion VND. According to the draft Land Law, the amount will be reduced to 12.77 billion VND, a decrease of 63.7%. But if calculated according to HoREA's proposal, this number will only be 9.69 billion VND, a decrease of 72.5%. In case of applying the proposal to exempt the part within the limit and only collect 30% of the part exceeding the limit, the amount will be 7.93 billion VND, a reduction of 77.5% compared to the current calculation.

Ministry of Finance proposes to reduce fees for converting agricultural land to residential land

Notably, not only associations but also the Ministry of Finance recently made recommendations related to land use fees. In the draft Resolution on removing difficulties in calculating fees for converting agricultural land use to residential land, the Ministry of Finance proposed applying a minimum collection rate of 30% to 50% of the land use fee value, in order to reduce the financial burden on people.

According to the draft, the provincial People's Committee will submit to the People's Council for decision on the specific collection rate framework, determining the highest and lowest rates applicable to each conversion case. The subjects include garden land, ponds, agricultural land located in the same plot of land with residential land, or land adjacent to houses but due to technical factors from before 2004, they were separated into separate plots.

The proposal also states that for land areas within the residential land allocation limit, people only have to pay a minimum of 30% of the land use fee. For areas exceeding the limit but under 500 m², the lowest payment is 50%. If exceeding 500 m², people are required to pay 100% of the land use fee when converting. In addition, each household or individual can only enjoy this incentive once. From the second conversion onwards, they will have to pay 100% of the land use fee, and the area within the residential land allocation limit will only be determined once.

With this proposal, the Ministry of Finance hopes to contribute to solving difficulties in land conversion costs, creating conditions for people to legalize their land use rights, while still maintaining a balance for budget revenue.

Source: https://nld.com.vn/loat-de-xuat-lien-quan-den-dieu-chinh-muc-thu-tien-chuyen-doi-dat-nong-nghiep-sang-tho-cu-196250914094328175.htm