Mr. Le Mai Thanh Huy (Can Tho) inquired whether the calculation of land use fees for residential land with a building density of 100% and villa land with a building density of 40% is the same and whether it yields the same value. He asked how building density affects the calculation of land use fees for residential land and whether different densities result in different values.

His company is the investor of a residential project that has had a land allocation decision since 2004. According to the approved detailed planning map from 2002, lots 12a, 12b, 12c, and 12d are designated for villa construction.

In 2020, the company applied for a Certificate of Land Use Rights; at this time, these lots had been adjusted to lots 20a and 20b, designated for commercial service projects and high-rise multifunctional residential buildings. However, because the 2013 Land Law does not recognize "commercial service projects and high-rise multifunctional residential land," the Department of Natural Resources and Environment only issued the Certificate of Land Use Rights as commercial service land.

In 2023, to ensure consistency with land law and to standardize the terminology between the construction sector and the natural resources sector, the Department of Construction and the City’s Construction Planning Appraisal Council agreed to present and received approval from the City People's Committee to change the designation from "Commercial service areas and high-rise multifunctional residential buildings" to "Mixed-use apartment buildings for residential and office purposes, commercial and service facilities (apartment buildings)" for the aforementioned lots.

Mr. Huy inquired whether, for the aforementioned lots, the company should pay land use fees based on the designation of "commercial service land," or according to the new designation as "land for apartment construction." Should the payment be based on the time of land allocation (in 2004) or the present time?

In Clause 8, Article 4 of Decree No. 71/2024/ND-CP dated June 27, 2024, the government states:

"…8. The land price of the parcel that needs to be appraised is determined by taking the arithmetic mean of the estimated land prices of the parcel needing appraisal based on each comparable parcel that has been determined according to the provisions of Clause 7 of this Article; the determined land price of the parcel needing appraisal must ensure that the difference with each estimated land price does not exceed 15%…"

Mr. Huy asked, in the case where there are many comparable parcels with significantly different transfer auction values, which parcel should be used as a benchmark for comparison?

His company is also the investor of a resettlement project, with the land allocation decision divided into three phases according to the progress of site clearance in the years 2009, 2018, and 2019.

In the detailed planning map approved by the decision from 2020, the lots along A6 Street are designated for villa construction. These lots were previously classified as service and commercial land (according to the decision from 2018 by the City People's Committee) and were allocated land under the second (2018) and third (2019) land allocation decisions.

By 2020, these service and commercial lots were reclassified as land for villa construction (according to Decision No. 1402/QD-UBND dated July 13, 2020).

To align with the adjusted detailed plan, on December 6, 2021, the company submitted a proposal to the Department of Natural Resources and Environment requesting an adjustment of the residential land area (ODT) in the land allocation decisions of 2018 and 2019. However, the company has not received a response.

Mr. Huy asked, based on Points c and d of Clause 3, Article 155 and Clause 2, Article 257 of the Land Law 2024, should the company pay the difference in land use fees for the villa construction lot based on the time of land allocation (2018, 2019) or according to the time of the planning adjustment (2020)?

If the decision to adjust the land allocation from service and commercial land to residential land is issued after August 1, 2024, will the company be allowed to apply the transitional provisions under Clause 2, Article 257?

The Ministry of Natural Resources and Environment responds to this issue as follows:

Regarding land use fees, please contact the Ministry of Finance for specific guidance based on the functions and responsibilities of the Ministry of Finance.

Regarding land valuation, Clause 3, Article 155 of the Land Law 2024 stipulates the timing for land valuation, land use fees, and rental fees as follows:

"a) For cases where the State allocates land, leases land, permits a change in land use, extends land use, adjusts the duration of land use, or changes the form of land use, the relevant time is when the State issues the decision to allocate land, lease land, permit a change in land use, extend land use, adjust the duration of land use, or change the form of land use, except for cases specified in Clause 7, Article 124 of this Law;

b) For cases recognizing land use rights, the relevant time is when the land user, the owner of assets attached to the land, or their representative submits complete and valid documents as prescribed by law;

c) For cases where a competent state agency adjusts the decision on land allocation or lease that changes the area, purpose of land use, or duration of land use, the relevant time is when the competent state agency adjusts the decision on land allocation or lease;

d) For cases where a competent state agency decides to adjust the detailed planning as prescribed by law on construction that requires re-evaluation of land prices, the relevant time is when the competent state agency decides to adjust the detailed planning.

4. In cases where land prices from the land price table are applied to calculate land use fees and land rent, the competent People's Committee must specify the land price in the decision to allocate land, lease land, permit a change in land use, extend land use, adjust the duration of land use, or change the form of land use.

For cases where a specific land price is determined to calculate land use fees and land rent, the competent People's Committee must issue a decision on the land price within 180 days from the time of land valuation as specified in Points a, c, and d of Clause 3 of this Article.

5. The Government shall provide detailed regulations on this matter”.

Selecting Comparable Land Parcels for Land Valuation

Regarding the content in Clause 8, Article 4 of Decree No. 71/2024/ND-CP, the selection of comparable land parcels shall be carried out in accordance with the provisions in Clauses 2 and 3, Article 4 of Decree No. 71/2024/ND-CP:

"2. Surveying and collecting information regarding comparable land parcels, including:

a) Input information for land valuation, which consists of land prices that have been transferred on the market, and land prices that have been successfully auctioned after fulfilling the financial obligations as specified in Points a, b, and c of Clause 3, Article 158 of the Land Law;

b) The information in Point a of this Clause is obtained from sources such as: the national land database, the national price database; the Land Registration Office; the organization conducting the auction of land use rights, and asset auction organizations; real estate exchanges, real estate companies; and information collected through surveys and investigations;

c) Factors affecting land prices as stipulated in Article 8 of this Decree.

3. The selection of information from the comparable land parcels is carried out in the following order of priority:

a) Information closest to the time of land valuation.

In cases where multiple sources of information arise at the same time, priority is given to selecting sources in the following order: the national land database, the national price database; the Land Registration Office; the organization conducting the auction of land use rights, and asset auction organizations; real estate exchanges, real estate companies; and information collected through surveys and investigations;

b) Certain similarities regarding the factors affecting land prices;

c) The closest distance to the land parcel or area needing valuation, without being restricted by the administrative boundaries of local government units at the commune or district level within the provincial administrative area. If the scope of information collection extends beyond the provincial administrative area, the organization conducting the land valuation must specifically explain the reasons in the report on the land valuation proposal for the land valuation appraisal council to consider and decide."

You are advised to contact the local Department of Natural Resources and Environment and the Department of Finance for specific guidance based on their authority and responsibilities.