What is Land Use Fee?

According to the regulations outlined in Clause 21, Article 3 of the Land Law 2013, Land Use Levy refers to the amount of money that land users must pay to the State when the State allocates land with a levy, permits the change of land use purpose, or recognizes land use rights.

From this definition, the land use levy is an obligation for land users, which is applied when the State:

1. Allocates land with a land use levy;
2. Permits the change of land use purpose;
3. Recognizes land use rights.

The land use levy applies to the following subjects:

- Households, individuals;- Economic organizations;- Overseas Vietnamese, foreign-invested enterprises.

The land use levy is calculated based on the land area, land use purpose, and land price. Depending on specific cases, there are detailed regulations regarding the land use levy.

Additionally, Decree 45/2014/ND-CP provides regulations on exemptions and reductions for land use levies applicable to certain subjects, as follows:

“Article 11. Land Use Levy Exemptions

Exemption from the land use levy is granted in the following cases:

1. Exemption from the land use levy within the allocated homestead land limit when using land to implement housing, homestead land policies for persons with meritorious services to the revolution, according to the laws on persons with meritorious services; poor households, ethnic minority households in areas with particularly difficult socio-economic conditions, border areas, and islands; using land to build social housing under housing laws; housing for those displaced due to natural disasters.

The determination of poor households is based on the decision of the Prime Minister of the Government of Vietnam; the determination of households or individuals belonging to ethnic minorities is based on the regulations of the Government of Vietnam.

2. Exemption from the land use levy within the allocated homestead land limit when issuing the first-time Land Use Right Certificates for land converted from non-homestead land to homestead land for ethnic minority households, poor households in specially difficult communes, as per the list of specially difficult communes designated by the Prime Minister of the Government of Vietnam.

3. Exemption from the land use levy for the land area allocated within the homestead land limit to fishing village households, riverine and lagoon dwellers relocating to planned resettlement areas approved by the competent authorities.

4. Exemption from the land use levy for the land area allocated within the homestead land limit to arrange resettlement or allocate to households and individuals in flood-prone areas according to projects approved by the competent authorities.

…”

“Article 12. Reduction of Land Use Levy

1. 50% reduction in the land use levy within the homestead land limit for ethnic minority households, poor households in areas not covered by Clause 2, Article 11 of this Decree, when the competent state agency decides to allocate land, recognizes land use rights (issues Land Use Right Certificates) for the first time, or permits the conversion of land use purpose from non-homestead land to homestead land.

The determination of poor households is based on the decision of the Prime Minister of the Government of Vietnam; the determination of households or individuals belonging to ethnic minorities is based on the regulations of the Government of Vietnam.

2. Reduction in the land use levy for land within the homestead land limit (including land allocation, land use conversion, issuing certificates for current land users) for persons with meritorious services to the revolution eligible for land use levy reduction under the laws on persons with meritorious services.

…”

The determination of land use levy payment policies for economic organizations and households, individuals, is based on cadastral records and the provincial People's Committee's Decision approving specific land prices. Subsequently, the tax authority issues a notice for land use levy payment and sends it to the organizations, households, and individuals using the land.

For further details, refer to: Land Law 2013, Decree 45/2014/ND-CP, and Circular 76/2014/TT-BTC.

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