Do we have to obtain the permission when changing the purpose of using land from commerce and service to residence? What is the fee for this procedure?
FDVN’s opinion:
Thank you for concerning FDVN’s legal services. Regarding your consulting requests, after studying the relevant legal documents, FDVN Law Firm would like to give you the following advice:
[1] What is land used for trading or services?
According to Clause 1, Article 153 of the Law on Land 2013: “Land used for trading or services includes land used for construction of trading or service establishments and other facilities serving trading or services”
Land used for trading or services falls into the group of non-agricultural land as prescribed in Clause 2, Article 10 of Law on Land 2013. Therefore, according to Point e, Clause 1, Article 57 of Law on Land 2013, the approval of the District People's Committee must be obtained when changing the land used for trading or services to the land used for residence.
[2] Legal basis for changing purposes of using land:
According to Article 52 of Law on Land 2013:
“1. The annual district-level land use plans which have been approved by competent state agencies.
2. Land use demands as indicated in investment project documents or in applications for land allocation, land lease or change of land use purpose.”
[3] Taxes and fees for changing purposes of using land:
- Land use fee: According to Clause 2, Article 5 of Decree 45/2014/ND-CP on collection of land use fees, the fee collected upon the change of land use purpose is calculated as follows:
“2. For households and individuals:
In case of change from non-residential non-agricultural land to residential land, land use levy shall be collected as follows:
- Current users of non-agricultural land recognized as land used for a long and stable term by the State before July 1, 2004, but not allocated or leased by the State, need not pay land use levy upon change from such land to residential land.
- Current users of non-agricultural land allocated with land use levy before July 1, 2014, shall, upon change from such land to residential land, shall pay land use levy at a level equal to the difference between land use levy calculated based on the residential land price and land use levy calculated based on the non-agricultural land price for the remaining land use term at the time of issuance of a decision on change of land use purpose by a competent state agency;
- Upon change from non-residential non-agricultural land leased by the State with full one-off rental payment for the entire lease period to residential land concurrently with the shift from land lease to land allocation, land users shall pay land use levy at a level equal the difference between land use levy calculated based on the residential land price and land rental subject to full one-off payment calculated based on the non-agricultural land price for the remaining land use term at the time of issuance of a decision on change of land use purpose by a competent state agency.
- Current users of non-residential non-agricultural land leased by the State with annual rental payment shall pay 100% of land use levy calculated based on the land price at the time of issuance of a decision on change of land use purpose by a competent state agency.”
Households and individuals that are permitted for change of land use purpose and meet financial difficulties and wish to owe land use levy may have the owing of land use levy written in certificates after filing written requests enclosed with dossiers for change of land use purpose and may pay owed land use levy in installments within 5 years at most. (According to Article 16 of Decree 45/2014 / ND-CP).
- Registration fee rates: Changing the land use purpose from non-agricultural land to residential land, the requester must register the change in land before changing the purpose of use. The registration fee rate in this case is 0.5% of land price (under Clause 1, Article 7 of Decree 140/2016 / ND-CP).
Above is FDVN Law Firm's opinion for your consulting requests based on studying the relevant legal provisions. Hopefully, FDVN's advice would be helpful to you.
Legal Advisor: Hoang Tran Ngoc Anh
FDVN Law Firm
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