Many households in Nghe An are 'shocked' by the new land use conversion tax.

Land conversion tax increases significantly.

After receiving the land use conversion tax notice for her family, Ms. Tran Van Anh from Hung Loc ward (Vinh City) exclaimed, "My family is in shock." Ms. Van Anh shared on her personal Facebook page that, due to concerns about the tax increase, her family submitted the land use conversion application on May 16th (when the old land price list was still in effect). However, for various reasons, the application was only accepted on May 19th and transferred to the Tax Authority in June, at which point Decision No. 18/2025/QD-UB of the Provincial People's Committee dated May 21, 2025, amending and supplementing Decision No. 45/2019/QD-UB on the issuance of the land price list in Cua Lo town (formerly) and Decision No. 57/2019/QD-UBND on the issuance of the land price list in Vinh City for the period 2019-2024, came into effect.

According to Ms. Van Anh, the price after changing the land use purpose is 15 million VND/m².² The family registered to move 300m.²Because the land was converted from garden land to residential land, the land use conversion tax and registration fee totaled 4.497 billion VND, as calculated by the Tax authorities. This financial obligation not only shocked Ms. Van Anh personally but also her entire family!

Mr. Vo Hong Hai, Deputy Chief of the Office of the People's Committee of Vinh City, in charge of the Public Administrative Service Center, shared: "Since the new land price list was applied, this is not the only case. Most recently, in June, a family of three brothers in Hung Hoa commune (Vinh City) had land allocated before 1980, built houses on it, and now wanted to change the land use purpose to separate the land title from their parents for each brother. Initially, the family estimated the cost of changing the land use purpose according to the old price list to be about 1.4 billion VND, but after applying the new price list, it was nearly 11 billion VND, nine times higher."

Similarly, another case in Phuc Tho commune also involved the processing of an application to change the land use purpose for nearly 500 square meters.²Parents were shocked when their garden land was converted to residential land, and the land conversion tax amounted to over 6 billion VND.

Representatives from the Vinh City Public Administrative Service Center also stated that since the new price list was implemented, the number of land use conversion applications at the Center has decreased. However, with only a few days left before the official operation of the two-tiered local government model, many people are still rushing to submit administrative documents.

Speaking with us, Mr. Nguyen Cong Thanh, Director of the Provincial Land Use Rights Registration Office, said: This has been clearly stated by the Department of Natural Resources and Environment (now the Department of Agriculture and Environment) during the dissemination and implementation of the 2024 Land Law and Decree 103/2024/ND-CP on land use fees and land lease fees. Therefore, when a large number of people in Vinh City and surrounding areas reacted to the change and rushed to complete the land use purpose conversion procedures, the Provincial Land Registration Office also directed its branches to try to receive and process applications for the people.

Further investigation revealed that, compared to before, Decree 103/2024/ND-CP on land use fees and land lease fees has changed. Instead of paying 45-50% of the land use fee, now 100% must be paid when changing the land use purpose. The land price list for the period 2019-2024 was quite low, but the new land price list, updated to reflect market prices, shows a significant increase, and the new tax rate has shocked many people.

For example, according to our research, in some areas and locations in Hung Loc ward or Nghi Duc ward, Nghi Phong commune, the old land price list previously ranged from only 3 to 5 million VND/m².²Or at most, it would only be 5-7 million VND/m².²But now it has skyrocketed to 17-20 million VND, or even over 40 million VND/m².²!

Representatives from the Department of Agriculture and Environment in several districts and towns also stated that in some locations, land prices have increased tenfold, resulting in a corresponding increase in financial obligations when land use is changed. Although residents and businesses still have concerns, the regulations on land price tables have come into effect, so the Tax authorities must apply them, and people wishing to change land use must comply.

A solution that is both reasonable and empathetic?

Many people are concerned because, previously, according to the Law on Land Use Conversion Tax and the Civil Code, parents who bequeathed, gifted, or divided land to their children were exempt from or had their land use conversion fees reduced, and only had to pay registration fees. However, currently, according to the Land Law and Article 8 of Decree 103/2024/ND-CP on land use fees and land lease fees, this regulation no longer applies.

Instead, in Section 2, Articles 17, 18 and 19 of Decree 103/2024/ND-CP on land use fee exemption and reduction only apply to cases of land allocation, land use purpose conversion in border areas, islands; particularly difficult areas or land allocation for social housing projects, people with meritorious services to the revolution, etc., with reductions ranging from 50% to 20% of land use fees respectively…

To date, Decree No. 103/2024/ND-CP does not include any cases where parents residing in urban or lowland areas gift or transfer land to their children, or convert land from other purposes to residential land, are exempt from or entitled to a reduction in land use fees.

Clearly, the fact that land prices have increased so dramatically in such a short time, and that parents have to pay high conversion taxes when changing the land use purpose from garden land to residential land to subdivide for their children, is causing difficulties for the people and requires a solution that is both reasonable and compassionate.

Investigations into the processing of land-related documents in Vinh City reveal a current confusion regarding the application of the new land price list by various departments, wards, and communes. Some departments explain that the new price list takes effect from May 9, 2025, according to Resolution 03/2025/NQ-HD of the Provincial People's Council. However, according to the Tax Department of Region X, Vinh City applies the new price list as effective from May 21, 2025, the date when Decision No. 18/2025/QD-UB of the Provincial People's Committee detailing the land price list for Vinh City officially takes effect. Documents submitted before May 21, 2025, will apply the old land price list, unless otherwise stipulated.

According to the head of the Provincial Land Registration Office, in cases where citizens are subjected to excessively high land-use conversion taxes as described above, they can halt the conversion process, and the land previously allocated to them will remain under their parents' ownership. The family can gift the land to their children through civil agreements and wait until conditions permit to proceed with the conversion from garden land or other types of land to residential land for building houses, transferring ownership, etc.

Furthermore, according to information we have received, after the issuance of Decree 103/2024/ND-CP, due to some shortcomings, including the regulation on collecting 100% of land use fees when converting land use to residential land, ministries, sectors, and localities have proposed that the Government consider amending this Decree and reverting the conversion fee to the previous rate of 50%. The authority to make this decision rests with the Government.

On the other hand, regarding land prices in Nghe An province, although Resolution No. 03/2025/NQ-HĐND amending and supplementing Resolution No. 19/2019/NQ-HĐND of the Provincial People's Council approved the land price list in Nghe An province for the period 2019-2024, the newly approved land price list shows significant increases in some areas and locations compared to before. Resolution No. 03/2025/NQ-HĐ-ND of the Provincial People's Council is now in effect. However, according to the 2024 Land Law, the land price list in each province will be adjusted and updated annually by the province. It is understood that the Provincial People's Committee is directing districts, towns, and the Vinh City People's Committee to instruct wards and communes (and new wards after July 1, 2025) to survey and compile land price lists for 2026. If any area or locality has inadequacies and receives recommendations from residents or local authorities, these will be submitted for consideration and adjustment accordingly.