Guidance on Converting Agricultural Land to Residential Land

Conditions for Changing Land Use Purpose:

According to the provisions of Article 57 of the Land Law 2013, the conversion of agricultural land to non-agricultural land (also known as residential land) is a case that requires permission from the competent state authority.

When changing the land use purpose, it must be based on:

- The annual land use plan of the District People's Committee (DPC) where the agricultural land is located, which has been approved by the competent state authority. People should proactively contact the DPC to inquire about the annual land use plan of their district to check if their local agricultural land is included in the planning; and- The need for land use as stated in the application for land use purpose conversion.

Procedures and Documentation for Changing Land Use Purpose:

Land users who need to change the land use purpose must submit one set of documentation, including:

- Application for land use purpose conversion;- Application for registration of changes in land and associated properties per Form No. 09/DK issued with Circular 24/2014/TT-BTNMT;- Certificate of land use rights; Certificate of land use rights, ownership of residential houses, and other properties associated with the land; Certificate of house ownership and land use rights.

The natural resources and environmental agency will be responsible for:

- Verifying the documentation; conducting on-site verification, evaluating the need to change the land use purpose;- Guiding the land user to fulfill financial obligations as per legal regulations;- Submitting to the competent DPC for a decision to permit the land use purpose conversion;- Directing the update and correction of the land database and cadastral records.

Financial Obligations:

Land users, upon being granted the Certificate of land use rights, must fulfill the financial obligations as stipulated by law.

- Payment of land levy:

Pay 50% of the difference between the land levy calculated based on the price of residential land and the land levy calculated based on the agricultural land price at the time of the Decision to change the land use purpose by the competent state agency as prescribed in Clause 2 Article 5 of Decree 45/2014/ND-CP in the case of households and individuals:

- Converting from garden land or pond land within the same parcel with a house in a residential area not recognized as residential land to residential land according to Clause 6 Article 103 of the Land Law;- Converting from land originally garden or pond land associated with a house but the user separated it for transfer or when the measurement unit divided it into separate parcels before July 1, 2004 to residential land.

Collect the land levy based on the difference between the land levy calculated based on the residential land price and the agricultural land price at the time of the Decision to change the land use purpose by the competent state agency as prescribed in Clause 2 Article 5 of Decree 45/2014/ND-CP in the case of converting from agricultural land allocated by the state without land levy to residential land.

- Determination of land price:

The land price for calculating the land levy will be the price stipulated in the Land Price Table when preferential land prices are applied for calculating the land levy for households and individuals authorized by the competent state agency to change the land use purpose within the residential land allocation limit.

There will be a 50% exemption or reduction in the land levy within the residential land allocation limit when changing the land use purpose to residential land upon issuing the Certificate of land use rights, house ownership, and associated properties for the first time by separating households for ethnic minority households and poor households in particularly difficult communes in ethnic and mountainous regions.

Moreover, if any household or individual is financially incapable of paying the land levy upon the conversion of the land use purpose, debt recognition will be noted on the Certificate, and the debt can be repaid gradually within five years. The tax payer will be supported with a reduction in the land levy owed at a support rate of 2% per year of the remaining debt repayment period and calculated on the amount of land levy repaid early in case of early debt repayment.

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